Trade talks, Trump tweets roil mar­kets

The Week (US) - - News -

What hap­pened

Mar­kets reeled this week amid con­fu­sion over Pres­i­dent Trump’s trade talks with China, after the pres­i­dent threat­ened to es­ca­late the con­flict and called him­self “a Tar­iff Man.” In­vestors were ini­tially op­ti­mistic after Trump and Chi­nese Pres­i­dent Xi Jin­ping agreed to a 90-day trade truce at the G-20 sum­mit in Ar­gentina. To defuse the es­ca­lat­ing trade war be­tween the two coun­tries, the U.S. agreed to hold off on Trump’s plan to in­crease tar­iffs on $200 bil­lion worth of Chi­nese-made goods from 10 to 25 per­cent. In re­turn, Trump said, Xi had promised him that China would buy more U.S. farm and en­ergy prod­ucts and re­move its tar­iffs on U.S.-made au­to­mo­biles.

Trump hailed the in­for­mal agree­ment as an “in­cred­i­ble deal.”

Bei­jing, how­ever, con­firmed only that there would be more ne­go­ti­a­tions, cast­ing doubt that the truce would last and that a more com­pre­hen­sive agree­ment would be struck. Stocks plunged after Pres­i­dent Trump threat­ened to im­pose more tar­iffs un­less China met his de­mands to open its mar­kets and re­duce its trade deficit with the U.S. “Re­mem­ber…I am a Tar­iff Man,” Trump tweeted. “When peo­ple or coun­tries come in to raid the great wealth of our Na­tion, I want them to pay for the priv­i­lege of do­ing so.” After pre­vi­ously ral­ly­ing on hopes of a China trade deal, the S&P 500 lost more than 3 per­cent of its value in one day and the Dow Jones in­dus­trial av­er­age plunged nearly 800 points. Trump later tried to soothe mar­kets by say­ing, “I be­lieve Pres­i­dent Xi meant ev­ery word of what he said at our long and hope­fully his­toric meet­ing.”

What the ed­i­to­ri­als said

So much for Trump’s “in­cred­i­ble deal,” said The Wall Street Jour­nal. The de­tails it turns out, were “sparse, to be gen­er­ous.” Trump only made things worse by in­vok­ing the dreaded T-word. It’s not hard to un­der­stand why. “Tar­iffs are a tax on com­merce, and when you tax some­thing, you get less of it.” The econ­omy is still strong, but there are warn­ing signs, and “Tar­iff Man shouldn’t go to war with the laws of eco­nomics. He’ll lose.”

“The clock is now tick­ing on the 90-day truce,” said The New York Times. The odds for a deal don’t look good. China hasn’t given any in­di­ca­tion it plans to make any ma­jor con­ces­sions, and Trump has ap­pointed U.S. Trade Rep­re­sen­ta­tive Robert Lighthizer, a China hawk and trade hard-liner, to lead the talks. The pres­i­dent is right to press China on is­sues like in­tel­lec­tual prop­erty theft, cy­ber es­pi­onage, and coun­ter­feit goods. But a trade war isn’t the an­swer. “The cur­rent one is hurt­ing both the United States and China, as well as rat­tling around like a loose part in the global eco­nomic ma­chine.”

What the colum­nists said

“This fits a fa­mil­iar pat­tern,” said Alex Shep­hard in NewRepub­lic.com. First, Trump cre­ates a cri­sis by ratch­et­ing up ten­sions with a for­eign gov­ern­ment, hop­ing to in­tim­i­date his ad­ver­sary into con­ces­sions. Then ne­go­ti­a­tions go nowhere. Trump ul­ti­mately agrees to su­per­fi­cial changes, as in the re­cently rene­go­ti­ated NAFTA deal. Nev­er­the­less, the pres­i­dent touts the deal as a his­toric vic­tory “that only he could ac­com­plish.” The China “deal” seems to be mostly an il­lu­sion.

“It’s not quite fair to de­scribe the trade war with China as a prob­lem that Trump started and then pre­tended to solve,” said Tyler Cowen in Bloomberg.com. Amer­ica’s griev­ances with China ex­isted be­fore Trump took of­fice. But in­stead of sweep­ing things un­der the rug, Trump has sent China “a real warn­ing on trade,” which is more than his pre­de­ces­sors can say. Even if only mod­est progress is made, Trump de­serves some credit.

Can Trump’s fans at least ad­mit that he re­ally is a pro­tec­tion­ist? asked Ramesh Ponnuru in Na­tion­al­Re­view.com. Some con­ser­va­tives have pro­posed that “Trump is ac­tu­ally a crafty free-trader” who is us­ing tar­iffs as a way to de­stroy all trade bar­ri­ers. But Trump just openly said he thinks those “trade bar­ri­ers are a pos­i­tive good.” Congress could step in if “Tar­iff Man” gets car­ried away, said Josh Barro in NYMag.com. Over the decades, leg­is­la­tors have voted the pres­i­dent broad pow­ers to im­pose tar­iffs. But some Repub­li­cans in the Se­nate have floated the idea of rein­ing in those pow­ers, a move House Democrats would likely sup­port. “If Trump takes big ac­tions to un­der­mine the global trad­ing sys­tem,” he may find him­self with adult su­per­vi­sion.

‘Tar­iff Man’ and Xi at the G-20

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