Some people believe that President Trump is so incompetent that none of his initiatives can yield anything positive for the U.S.
Leaving aside that his policies have already helped facilitate lower unemployment and higher wages, it appears that his threat to place tariffs on Chinese imports has yielded positive results. As a result, my April 3 prediction that China and the U.S.. are “likely to reach a trade deal soon” is looking more and more accurate.
Specifically, in a little noticed speech (the FBI’s raids on the president’s lawyer and Mark Zuckerberg’s Senate testimony dominated the news cycle), China’s President,, Xi Jinping, made several important concessions to the U.S. In a seeming nod to President Trump’s complaints about America’s large trade deficit with China, Xi said China would look to increase its imports. Apparently looking to meet another key Trump demand, Xi promised to “significantly lower tariffs on imports of automobiles, and also loosen restrictions on foreign ownership in the auto sector.” Finally, Xi’s commitment to further open up its financial markets to foreign firms will undoubtedly please President Trump.
There is now a very low likelihood of the U.S. and China embarking on any sort of trade war. Not only, as I pointed out on April 3, has “”President Trump …always been a deal maker,” but the president’s new head economic adviser, Larry Kudlow, has made abundantly clear that the administration is looking for a deal with China, not a trade war. And President Xi, with his rather long list of concessions, is also obviously looking to make a deal, not fight a war. So with both sides ready and willing to compromise, it appears that a deal is just a matter of time. I remain convinced that a deal with be reached by September, in plenty of time to impact the U.S. elections.