“Stocks rose on Monday, erasing earlier losses, as worries about a potential trade war waned,” Fred Imbert and Alexandra Gibbs report for CNBC.
“The Dow Jones industrial average closed 336.70 points higher at 24,874.76 after dropping as much as 150 points. The S&P 500 rose 1.1 percent to 2,720.94 after briefly trading lower,” Imbert and Gibbs report. “The Nasdaq composite advanced 1 percent to close at 7,330.70.”
“‘Seeing Caterpillar and Harley-Davidson trade higher tells me that traders think this will end diplomatically,’ said Quincy Krosby, chief market strategist at Prudential Financial. She also noted that the President Donald Trump’s comments on NAFTA showed ‘flexibility’ on his part,” Imbert and Gibbs report. “Trump appeared to be opening the door for negotiations on tariffs. In a series of tweets Monday morning, Trump said:”
We have large trade deficits with Mexico and Canada. NAFTA, which is under renegotiation right now, has been a bad deal for U.S.A. Massive relocation of companies & jobs. Tariffs on Steel and Aluminum will only come off if new & fair NAFTA agreement is signed. Also, Canada must..
— Donald J. Trump (@realDonaldTrump) March 5, 2018
…treat our farmers much better. Highly restrictive. Mexico must do much more on stopping drugs from pouring into the U.S. They have not done what needs to be done. Millions of people addicted and dying.
— Donald J. Trump (@realDonaldTrump) March 5, 2018
“Trump announced last week the U.S. will implement a 25 percent tariff on steel imports and a 10 percent tariff on aluminum imports. The news sparked fears of a potential global trade war,” Imbert and Gibbs report. “Equities fell following Trump’s announcement, with the Dow closing 420 points lower on Thursday. The S&P 500 and Nasdaq also closed lower that day.”
Read more in the full article here.
MacDailyNews Take: The market seems to agree that this sounds more like a negotiation tactic than set-in-stone policy.
SEE ALSO:
Apple Macs caught up in President Trump’s aluminum tariff plan – March 2, 2018
The trade war started many years ago, and just like the war on Islamist extremist, we are late reacting.
In private business, as in sports, there is always an outside referee to enforce the rules. If someone breaks a contract or negligently inflicts damages, the victim can (in theory) go to court and seek redress.
In practice, of course, the remedy—even in private business—may be so costly as to make it infeasible. That is particularly true when the defendant has far more money for lawyers and litigation costs, so he can afford to spend the plaintiffs into the ground. As a last resort, a business defendant can arrange his affairs in such a way that he can spin all the liabilities into a subsidiary and declare it bankrupt. Donald J. Trump has employed both the kamikaze litigation and bankruptcy ploys repeatedly during his business career.
He has yet to learn that it doesn’t work that way in the political world, not even in theory. If you break your word to a member of Congress concerning a political deal, he cannot sue you. The government has sovereign immunity, so if it harms private citizens, they only have limited remedies. If the United States violates a treaty obligation, the other country can obtain redress if—and only if—the US has submitted in advance to the jurisdiction of an impartial court or arbitration panel… which it almost never does.
What that means in practice is that the political order, from the local to the international level, must depend on trust far more than the business world does. When you know that you will have no legal remedy if your agreements, contracts, or treaties are broken, you will never get into a deal unless you trust the other side to keep its obligations. As President Reagan put it, “Trust, but verify.”
The best way to do that is to negotiate win-win deals, so that both parties stand to gain if the bargain is kept and both parties will suffer if it breaks down. One-sided deals will rarely be signed, and never be kept. The second essential is to keep your word once it is pledged. Most politicians and “statesmen” can be bought for a high enough price, but unless they stay bought, it will only happen once. “Fool me once, shame on you; fool me twice, shame on me.” Unreliable politicians, like players who cheat at cards, will never find anyone willing to deal.
Whatever the case may be in private business, a politician who offers other politicians a deal that he has no intention of keeping isn’t just slimy and unethical. Once it sinks in that he is not to be trusted, he will be totally ineffective. Crying wolf about a trade war might (just “might”) work once, but never again.
Don’t be fooled free and civilized world, that nation lives by war and their current leader is aching for a trade war.
Don’t think that the WTO is going to help you, if you don’t know that this nation has nothing but disdain for the rest of the world. Terrorists torture.
You should be looking at a total embargo of all goods and services to that country and other measures until they learn their lesson. You won’t of course but don’t say you haven’t been warned.
so, like, dude, where is that 2% GDP NATO obligation you deadbeats owe the American taxpayer who has been footing the bill for your defense since 1947?
Right beside the ability for keeping on topic and telling time. Your nation isn’t protecting anyone but your own selfish self interests anymore, and you haven’t for a while. Terrorist torture, that’s your nation now. Your nation is a threat to humanity.
pay up, deadbeat, and that goes double for Prime Menstrual Trudy.
I’d suggest your nation get civilized but that’s beyond its current capacity. Karma is going to be such a bitch to your pathetic traitorous terroristic nation.
Wow…major moderation much?