Trade wars are not helping in feeding the US

Always remember - better to be late than to come looking ugly. China has not made any concessions in foreign trade pleasant for the US for so long that Donald Trump has to wonder whether its leader was delayed in Buenos Aires? Or maybe Xi Jinping went someplace nice to rest a little after a busy lunch with the US president? We don't know what they had there in Argentina. Maybe alcohol. And alcohol does not help find the answer. It helps forget the question.

In order not to lose face, you need to give poison in small portions. Better to start with something sweet. For example, with the announcement that the US will not increase the duties. How is this for progress in the negotiations? However, at what cost... A couple of days after the G20 summit, Beijing started talking about a 90-day truce period, a little later - about serious punishments to local companies that violate intellectual property rights. All that's left is to talk about the reduction of import duties on American cars and the significant purchases of agricultural, energy and industrial products from the US. Instead, there was talking about confidence in the conclusion of the deal and its objectives. Geting rid of all the duties! Sounds great but unlikely. Washington might think that the pawns are completely out of control...

The trade war leads to the fact that an increasing number of Chinese are starting their morning with the words "Columbus, please shut down America!", and there are so many of them that even a dead person may turn over in their grave. Washington's appetite comes with eating. A brutal appetite - with a diet. Donald Trump and his team were going to eat at the expense of import duties, but the widest deficit of US foreign trade in October over the past ten years shows that it did not work out. Imports are growing by leaps and bounds, because, inspired by tax reform, Americans spend money left and right. Exports suffer from a strong dollar, retaliatory duties, and weak external demand. The White House is on a diet that provokes it to negotiate aggressively with China.

The person who carries your rake behind you is called a provocateur. It's hard to say who it is at the moment: whether China with its supposedly unfair trading practices, or Donald Trump with his twitter? The predecessors of the 45th President of the United States attacked the rake of increasing tariffs more than once, but Americans are not so economical by their nature as to even learn from the mistakes of others. The owner of the White House behaves like a pedestrian in traffic. He is always right. But not always alive.

Financial markets followed the ups and downs of relations between the US and China with extra attention, and are glad that instead of the cold war they got a thaw. The time has come to switch focus to the Fed with its monetary policy, because bad things happen to your eyes from staring on one point for too long:

- What is your vision acuity?

- Minus five!

- Minus five? Aren't your eyes cold?


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The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.

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