How’s Donald Trump ticking in the trade dispute? An interview provides information

Which basic ideas characterize Donald Trump in the trade dispute?

At the moment it is the main topic on the world stock exchanges. The trade dispute between the USA and China over tariffs and sanctions. Undoubtedly also the topic of the coming years. The struggle of the systems for economic supremacy in the world, for which there can be no quick solution.

Which basic ideas characterize Donald Trump in the trade dispute?

  • The Fed’s policy and the trade conflict are currently the greatest risks to the upswing. It will be crucial to manage the trade dispute with China.
  • Donald Trump is a deeply convinced protectionist. He is the first US President to treat China as an opponent – not as a trading partner.
  • He is not a conventional Republican. He wants to conclude a trade deal. Even if tariffs are increased it is only temporary. We are two-thirds sure that there will be a trade deal by the end of the year.
  • When we would advise him, we would tell him: Take now the best deal you can get before the presidential elections so that China buys more of US goods. And when you’re re-elected you’re going to be really tough on China. This trade dispute will drag on for years. The rivalry will be the struggle of our era
  • The President believes that there are advantages in imposing tariffs on Chinese goods. He does not think like a free trader. If he lowers the import of Chinese products into the USA, he believes, American producers will benefit. But he doesn’t see the dangers of tariffs – they harm the consumer and thus the economy.
  • But when stock prices fall massively he begins to doubt about it. He looks at the financial markets every few hours as a businessman. And he knows exactly: if the stock market collapses he will not be re-elected. That is why there will be a deal.

(Personal note of our editorial staff: Trump’s promise to his core voters was: “You shall measure me at the level of Dow Jones!)

Our conclusions

Some of the statements made convince us further in our view that there will be a deal with China in the foreseeable future – possibly in the form of a compromise or a ceasefire.

As we have pointed out on several occasions, there are the variables that control the trade dispute. One is Wall Street, Trump’s biggest opponent and at the same time his regulator. The second is his irrepressible will to be re-elected president in 2020, as the supreme guideline for his actions. This leads us to the obvious conclusion that Trump will not be able to escalate the trade dispute in the coming months because of the Wall Street collapse and the loss of wealth for millions of Americans.

But there should only be a major movement in the trade dispute towards a deal when Wall Street corrects to a greater extent; President Trump previously only feels that his approach to customs policy has been confirmed.

Nevertheless, this dispute is likely to keep the world’s stock markets on their minds for years to come. China believes that it can gain time with a policy of pinpricks and they know the weakness of the US government – the situation of the US stock markets.

They want to bridge time to be able to negotiate a deal with Donald Trump’s successor. This will probably not succeed because such a long period of uncertainty and disruption of retail chains will not be able to cope with the world economy in its current situation.

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