If It Walks Like A Duck
This weekend Trump and his administration sought to temper fears of an all-out trade war between two superpowers.
On Sunday the president tweeted, “President Xi and I will always be friends, no matter what happens with our dispute on trade. China will take down its Trade Barriers because it is the right thing to do. Taxes will become Reciprocal & a deal will be made on Intellectual Property. Great future for both countries!”
His tweet occurred in conjunction with Treasury Secretary Steve Mnuchin’s interview on Face the Nation. During his interview, Secretary Mnuchin said that he does not expect a trade war with China over new tariffs on Chinese imports but didn’t rule out the possibility that the current dispute could escalate further.
"Our expectation is that we don't think there will be a trade war. Our objective is to continue to have discussions with China. We want to have free and fair reciprocal trade. We're just looking for our companies and our workers to have a level playing field and right now we have about $500 billion of goods that we buy from China and they buy about $135 billion from us.”
These statements occurred after a week in which multiple salvos were fired from both the United States as well as China.
Last week, President Donald Trump threatened China with an additional $100 billion in tariffs. This being the latest actions by the United States following a week in which both sides threatened to implement billions of dollars’ worth of tariffs on imported goods from the other country. This additional $100 billion in proposed tariffs under consideration would raise import tariffs to a total of $153 billion on Chinese imports.
This was met by an immediate response from China indicating that they would also impose tariffs on American cars, chemicals, and the most enormous single American import to China, soybeans.
According to Asia-Pacific, the Chinese leaders sound supremely confident that they can win a trade war with the United States. According to the Chinese state news media, Trump has been depicted as a reckless bully intent on undermining the global trading system while presenting the Chinese government as a fair-minded champion of free-trade.
“China is not afraid of a trade war.” the vice minister of finance, Zhu Guangyao, declared at a news conference to discuss possible countermeasures.
By definition, according to Wikipedia, a trade war refers to two or more states raising or creating tariffs or other trade barriers on each other in retaliation for other trade barriers.
Certainly, a case can be made that current actions by the Chinese and United States meet and exceed the criteria and definition of a trade war.
If it walks like a duck and quacks like a duck, it must be a duck.
Wishing you as always, good trading,