Trade talks, Trump tweets roil markets
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