Trump’s trade talks are simple, if you want a strong US

As I wrote in the late spring when the tariff war talk started, this is truly the art of the deal for President Trump.

By the actions of numerous previous administrations, the world and China particularly, took on the task of being our manufacturing base for better or worse.

So Trump said if they have to sell to us, which they do, then we need to get better terms. A business mentality, not a pie-in-the-sky globalist view of trade.

Look no further than the deal Trump has worked out with the EU. Trump told EC president Jean-Claude Juncker, if you want Mercedes and BMWs in our driveways, then you have to give us this and this. Leveling the playing field had to win the day, the Germans had too much riding on staying competitive with their cars.

Look at China as the perfect example. Since the initial $50 billion in tariffs was floated, its stock market has tanked and its currency, the yuan, has cratered to a 13-month low. This despite the yuan being pegged to the US dollar, which has not moved that much over the same time frame.

China has far too much invested in migrating its people from the countryside to the cities to create its nascent middle class of manufacturing workers to walk away from US trade.

Is Foxconn going to sell knockoff iPhones to Nokia?

To be honest it’s not even a fair negotiation on these tariff talks. Oh, sure China and the EU can be boastful and full of bluster about Trump’s tactics, but at the end of the day these products need to be here or else those widgets have no other natural market on the scale of the US.

Anyone of the last five presidents could have done this deal if they wanted to, but that’s the problem, they didn’t. They were beholden to globalist espousing one world government and currency.

So if you come at trade from an America First point of view, you get the best terms possible, like the EU paying us to ship their cars to the US, which is essentially what this new deal is because they took tariffs off our exports to the continent.

It’s really easy to get your terms when you acknowledge that there are borders to countries and they are there for a reason and we will defend ours both economically and militarily.

China has seen that and right after Labor Day it will capitulate to our terms in order to feed their people over the winter. Trust me on this, as TrumpĀ  says.

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Chinese trade tariff tiff will melt in August heat

We are in the midst of summer doldrums. Markets reading tariff headlines and reacting to mounting trade war.

I prefer to call it a trade tariff tiff, since it’s all blather as no country will stop trading with the US. While the markets reeled over the newest $200B in tariff against China, this will not be enacted until mid-August, so there is plenty of wiggle room for it to work out prior to the deadline.

The markets seem to agree with this premise since on Thursday stocks are retracing back almost 90% of Wednesday’s loses.

Short post today as there is little else going on.