The Stock Market’s Massive Overreaction to Blip in Trade Negotiations With China Raises Question, Whose Interests is the MSM Promoting

Buenos Aires: President Donald Trump meets with Japan's Prime Minister Shinzo Abe, left, and India's Prime Minister Narendra Modi, Friday, Nov. 30, 2018 in Buenos Aires, Argentina. AP/PTI(AP12_1_2018_000013A)

Elder Patriot – After China made good on its counter threat to impose tariffs on $60 Billion in U.S. exports to the communist country, American stock markets reacted by shedding $1.5T in wealth over the past few days.  Seriously?

Talk about losing all sense of proportion.

What we are watching is a media-fed overreaction that belies explanation.  But we will give it a try.

Let’s begin by assuring you that, contrary to what the Obama administration wanted you to believe, the stock markets – in particular, the Dow Jones Industrial Average – does not reflect the overall health of our economy.

The DJIA is only one component of the strength of our economy.  

But, even for those heavily invested in large cap companies, they have to realize that the current situation is nothing more than normal friction in the course of negotiations… especially negotiations between hostile foreign powers.

Michael Pillsbury, one of our country’s leading China watchers, appeared with Fox News’ Elizabeth MacDonald to explain the relatively benign moves and counter moves that have been characterized by the anti-America media as a full blown trade war.

Pillsbury believes that Trump holds all the cards and that China will have to come to the table to prevent their economy from bleeding out.

President Trump has been strategically preparing for this confrontation for at least two decades and began taking steps to strengthen the United States trade position the moment he was elected.

When President Trump took office he set about creating the conditions necessary for restoring America’s entrepreneurial sector which was something, it seemed, Obama’s financial gurus were intent on destroying.

The results have been stunningly effective with record high levels of employment, rising wage rates for the first time in nearly three decades, coupled with low inflation

The expansion of small and medium-sized businesses greatly broadened our economic base thereby significantly diminishing the anticipated impact of a trade war with China.

By contrast, China’s economy is narrow, if deep, based on manufacturing to a grossly disproportionate fault.

But Trump had taken additional steps to counter the possibility of China walking away from negotiations, in the early days of his presidency.

Sundance:

Long before media pundits starting noticing/considering how serious President Trump was about structurally resetting the entire landscape of a U.S-China trade relationship,  President Trump quietly and methodically laid the groundwork with personal visits to: Prime Minister Shinzo Abe (Japan); President Moon Jae-in (S-Korea); President Tran Dai Quang (Vietnam); and President Rodrigo Duterte (Philippines).

Oh, how quickly the media forgot.

These were not visits as part of multinational/multilateral G20 or G7 discussions.  The November 2017 tour of Asia was President Trump traveling to meet directly, face-to-face, one-on-one with the manufacturing heavyweights of Southeast Asia.

At every single stop he broadcast the intent of the visit: “We’re talking TRADE”!

These were unilateral meetings; and, in hindsight, clearly designed to structure the foundation of the current U.S-China trade conflict.

These talks were fruitful and makes the decision to walk away from China far less painful in the short run and far better for America and Americans in the long run.

Buenos Aires: President Donald Trump meets with Japan’s Prime Minister Shinzo Abe, left, and India’s Prime Minister Narendra Modi, Friday, Nov. 30, 2018 in Buenos Aires, Argentina. AP/PTI(AP12_1_2018_000013A)

This explains why Trump tweeted “we’re in no rush” to make a deal and “China isn’t ready to make a deal yet.”  Trump want China to have time to understand just how screwed they are.

The attack-Trump media has resorted to trying to scare American consumers with the threat that they will soon be paying the 25% cost of the tariffs on everything that comes from China.

This is a deliberate mischaracterization of who will bear the long term costs.   Importers have already began sourcing manufacturing potential in non-tariff countries, including locating their facilities inside the United States.  

Those importers who fail to find alternatives to their current Chinese supply chain will find themselves replaced by those who do.  American consumers will not pay more for a Made in China label.

China will soon be forced to acknowledge that manufacturing facilities and cheap labor are available across the Pacific Rim.  The American consumer can only be found in the United States.