China – Trump “clueless”, interim deal possible

A poisoned optimistic message from China to Trump – interim deal possible if USA renounces all core demands…

Tomorrow a low-level delegation from China will travel to Washington to prepare Liu He’s visit to the US capital at the beginning of October (no exact date for his trip has yet been set). Now Chen Wenling, chief economist of the “China Centre for International Economic Exchanges”, which is close to the government, says according to the “China South Morning Post“: an interim deal is likely if the USA forgoes further tariff increases (Trump had postponed this further increase to October 15th in view of the 70th anniversary of the foundation of the People’s Republic of China – and thus of course triggered another rally on the stock markets) – and relaxed the restrictions against Huawei:

“The US should rescind its tariffs, and in particular, it shouldn’t impose any new tariffs, that’s definitely the bottom line of Beijing”, so Chen Wenling gegenüber der „South China Morning Post“

Accordingly, China would increasingly buy US agricultural products if the above-mentioned concessions of the Trump government were made. Then a member of the Chinese delegation would travel to the highly agrarian Midwest to prepare these Chinese purchases.

This may sound hopeful. But there is a small or rather a big catch: Beijing obviously believes that it has gained the upper hand in the trade war and therefore does not have to make any further concessions than the purchases of US agricultural products, as the “South China Morning Post” reports with reference to Chen Wenling:

„Chen added that it is “not necessary” for Beijing to make any significant concessions other than promises to buy US farm products, including soybeans and pork, because it has now gained the upper hand in fighting the trade war with the US.“

This means that Beijing is in fact not prepared to include in a deal the central demands of the USA as the protection of intellectual property! Trump would therefore have to forego practically all core demands in order for such an interim deal between China and the USA to come about at all – and that would not only be a “loss of face” for the US President, but would also expose him to harsh domestic political criticism not only from the US Democrats. In fact, it would be a big risk for the US president with the only benefit of being able to sell a few soybeans and pork to China!

Just how much China thinks it is in a better position is drastically illustrated by Chen Wenling’s statements: it would even be good for Beijing if Trump won the US election in 2020, because he is completely unaware and has no strategy in the trade war:

“Trump is likely to win the election, and it would be good news for China,” she added. “He is completely clueless in fighting the trade war without any strategies or master plans, and he has bullied US allies.”

If that’s not a poisoned good news for Trump and the western financial markets.

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