Sunday, May 6, 2018

Trump Trade "Negotiators" Return to US From China Without a Trade Deal

Over two days of trade meetings in China that ended Friday, Chinese officials stood firm against demands from some of President Donald Trump’s top economic advisers and laid out strict requests of their own, reports Politico.

The result was that
the U.S. delegation headed home having made little progress on intractable issues — an outcome that may play right into China’s interests.

China’s state-run Xinhua media outlet acknowledged “considerable differences” remaining and called for “continued hard work” from both parties.

“The Chinese are just unbelievably great at playing rope-a-dope,” said Rob Atkinson, the president of the Information Technology and Innovation Foundation. “Everything they’re going to do is going to be a stall tactic, because the more they can stall, they can string us along.”

Notes Politico, savvy Chinese negotiators could persuade Trump to delay ratcheting up the tension until after he meets with North Korean dictator Kim Jong Un, for example.

Another stalling tactic is that Beijing officials could push him to wait until after November’s midterm elections by convincing Trump that he doesn’t want to disrupt his relationship with one of the U.S.’ largest trading partners just before voters go to the polls.

Of course, the Trump mercantilist demands that China reduce its trade deficit is silly and flies in the face of basic economics.  According to multiple reports, the Trump administration's delegation to China demanded a $200 billion cut to the US-China trade deficit by the end of 2020. That represents nearly a 60% reduction from the trade deficit between the two nations' in 2017 trade deficit of $336 billion.

Such a reduction would mean a massive restriction in product flow to Americans.

More than 1,100 economists have signed an open letter to Trump and Congress voicing opposition to tariffs and protectionism.

The question now is: Will Trump go nuclear and aggressively increase tariffs on China or will he play into China's wise delaying tactics?

-Robert Wenzel 



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