Trump Drops Atomic Sledgehammer on China Over Stalled Trade Talks

Elder Patriot – The Chinese were counting on the massive influence they have achieved over our media and members of Congress to be able to stall coming to an equitable- even only a more equitable – trade agreement hoping President Trump would be removed from office.

With the overwhelming probability that Trump is now likely to be re-elected, the president’s engagement with China’s Chairman Xi has turned more aggressive… on both sides.

Trump’s tweets came after last week’s trade negotiations, between Treasury Secretary Steven Mnuchin, U.S. Trade Representative Robert Lighthizer and their Chinese counterparts, saw China’s Chairman Xi respond by ordering his proxy, North Korea, to test-fire three missiles.

Whether DPRK Chairman Kim was the one who gave the orders to break the ban on missile firings, or whether China gave the order to do so to rogue commanders within the North Korean military, President Trump recognizes it as an attempt by China to leverage the trade negotiations by bringing outside pressure.

Trump responded in kind by tweeting his intention to finally make good on his long delayed plan to exert maximum U.S. pressure on China’s already struggling economy through the imposition of tariffs – massive tariffs.

China’s vulnerability is evident by the performance of the Shanghai Stock Exchange (SSE), the Chinese major stock exchange since Donald Trump first began implementing his America First trade policies.

Since Trump’s election the SSE has lost over 9% of it’s value while the Dow Jones Industrial Average has grown over 40%.

More importantly, our 3.2 growth in GDP for the first quarter of 2019 was fueled to a large extent by the growth of small and mid-sized companies.

This provides the president with additional leverage because the Trump economy is better positioned to endure a downturn in the performance of large cap companies than China’s economy is.

Without their previous predatory access to U.S. markets China loses its largest – by far – trading partner.

It’s been calculated that China’s unfair, and often illegal, trade practices have cost 3.4 million American jobs.

As we prepare to post this article, the major U.S. stock market, the DJIA is off 0.73% on the news that tariffs are back in play.  The SSE, meanwhile, has lost 5.58% off it’s previous two-year devaluation.

Before you let the media spin doctors fill your heads with the threat of a global recession consider what Sundance suggests is really unfolding here and how Trump has proven his position of master negotiator, once again:

Inflation in the U.S. remains low at 1.4%…. now is the perfect time to hit Beijing with expanded tariffs. I’m surprised China didn’t evaluate that aspect, perhaps they did; but they are also running out of time due to negotiation pressure from Trump.

Beijing referring back to the DPRK blackmail reflects a certain desperation on the part of the communist regime.  A dual display of bad form, and a visible *tell* for President Trump.

Knowing China has just indicated a weak hand, now Trump calls their bluff.

Chairman Xi played a cunning Panda-face game between the Argentina dinner (G20), the manipulation of the Hanoi summit with Chairman Kim, and the extended trade negotiation talks.  Xi stopped the immediate tariff threat, and simultaneously retained the DPRK leverage over Trump.

However, given the scale of China’s dependence on access to the U.S. market, it was only a matter of Trump allowing the appearance of diplomatic time to pass before he could counter with a more forceful response of his own.  I have no doubt Lighthizer dropped a strategic ultimatum on Beijing last week, triggering them to drop the panda mask.

Team U.S.A. came out of these negotiations exactly where President Trump always seemed to be heading; he wants full frontal tariffs on Chinese imports because he knows China will never genuinely negotiate terms until they are defeated.

Chairman Xi and Vice-Chairman Liu now have only a few days to rethink their approach. Now they have exhausted the delay strategy; and simultaneously any immediate increase in DPRK hostilities will be transparent and of no further trade benefit.

Fully acquiesce to Trump trade terms, or purchase some extended trade benefit with full retreat from North Korea manipulation.