Did Trump blink or did he move to forestall WW 111 | Old NEM MB Message Board Posts

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Msg  57100 of 57137  at  8/14/2019 9:05:53 AM  by

valuationguy


 In response to msg 57095 by  zeno451
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Re: Did Trump blink or did he move to forestall WW 111

Zeno451
 
You are misinterpreting the situation.
 
Trump is make a relatively small concession because the POLITICAL OPTICS are expected to be highly favorable to him by doing so.   First...the concession is relatively small....only $10B of the $85B in goods that the 10% tariff level is being placed on is affected (<12%)...and the effects are only a 4 month delay...so not all that meaningful.
 
He KNOWS that this concession isn't going to prevent China from moving in troops and cracking down.  If China doesn't suppress Hong Kong and force them back into the fold...it has much bigger internal problems of control so you can guarantee that China will crack down violently.   
 
So the optics are that Trump extended an olive branch and the "oppressive" Communist regime ignored it and re-commits to its fascist tendencies (abandoning the "panda" (friendly) mask that it tried to adopt to lull the EU and other gullible counties into thinking that China is the "good guy" in the current US-China dispute).. This puts Trump in the moral/political catbird seat (particularly as seen by his U.S. base...who are the primary audience of his NATIONALISTIC policies) to RE-APPLY the FULL set of tariffs (at the 25% level) as China proves itself a "bad" actor on the world stage.
 
China has effectively nationalized 3 major Chinese banks with over $800B in assets in the past 3 months (the last one this past Friday...with $200B in assets).   China currently has a critical need for capital due to the growth engine stalling.....and Trump just put sugar into China's gas tank with his tariff policy and his labeling China a currency manipulator.  This is why the Chinese yuan is going to devalue (China can't continue to prop it up without depleting its international currency reserves) and really jack up inflation domestically (in China).
 
VG 
 
 
 


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Msg # Subject Author Recs Date Posted
57101 Re: Did Trump blink or did he move to forestall WW 111 zeno451 2 8/14/2019 12:33:23 PM


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