Dow futures fall after President Trump tweets ‘absolutely no need to rush’ on China trade deal

“Wall Street is set to open lower on Friday as President Donald Trump said there’s ‘absolutely no need to rush’ on a trade agreement with China and tariffs will make the United States ‘much stronger,'” CNBC reports. “Futures on the Dow Jones Industrial Average fell about 120 points Friday morning, implying a lower open of about 113 points. The S&P 500 and Nasdaq were also set to open lower.”

“Trump signaled in a Twitter post Friday morning he could stick with China tariffs for a long period of time,” CNBC reports. “The comments came after he slapped higher tariffs — from 10% to 25% — on $200 billion worth of Chinese goods.”

“There’s still hope that the U.S. and China could hatch a deal, however,” CNBC reports. “‘A ‘grace period’ was included on these tariff increases, so that goods currently in transit to the U.S. from China aren’t subject to the new 25% tariffs, just the old 10% tariff,’ Tom Essaye, founder of Sevens Report, said in a note on Friday. ‘That grace period was not included in previous rounds of tariffs and is likely an olive branch of sorts to the Chinese side. Given shipping times, goods sent from China today will take two weeks or so to reach the U.S., so if a trade deal is stuck in that time frame, the pain of the 25% tariffs will never be felt,’ he added.”

Read more in the full article here.

MacDailyNews Take: Again, as we’ve said throughout: No pain, no gain. Short-term pain leads to longterm gain.

We continue to expect the two sides to reach a trade deal eventually, but this is unlikely to happen in the short term as the war is not painful enough for either side. — Zhiwei Zhang, Deutsche Bank’s chief Asia economist, in a note to clients on Friday

I’m cognizant that in both the U.S. and China, there have been cases where everyone hasn’t benefited, where the benefit hasn’t been balanced. My belief is that one plus one equals three. The pie gets larger, working together. — Apple CEO Tim Cook, March 24, 2018

At least half of the popular fallacies about economics come from assuming that economic activity is a zero-sum game, in which what is gained by someone is lost by someone else. But transactions would not continue unless both sides gained, whether in international trade, employment, or renting an apartment. — Thomas Sowell, June 14, 2006

SEE ALSO:
China overplayed its hand with U.S. President Trump on trade, and it could cost them dearly – May 9, 2019
Apple CEO Tim Cook optimistic about U.S.-China trade talks – February 12, 2019
President Trump says U.S. doing well in trade negotiations with China – January 23, 2019
China’s 2018 growth slows to 28-year low, more stimulus seen – January 22, 2019
Apple CEO Tim Cook: I’m very optimistic about U.S.-China trade talks – January 8, 2019
Advisor to President Trump: Apple’s sales should pick up when U.S.-China strike trade deal – January 3, 2019

17 Comments

  1. Haste makes waste.

    Take your time President Trump and get it does right, fixing decades of weak leadership on this front, previous administrations who SOLD OUT the American worker!

    1. If you think retweeting an economically illiterate con man somehow bolsters your selfish and immature worldview, you are mistaken. When China strikes back with tariffs aimed precisely at Trump’s base, you’ll see how well US farmers — many currently receiving federal assistance, we should note — are able to weather the oncoming storm.

      2016 Candidate Trump:
      “I don’t blame China” for trade imbalances.
      “You can win against China if you’re smart. But our people don’t have a clue. We give state dinners to the heads of China. I said why are you doing state dinners for them? … Just take them to McDonalds…”
      “I’ll take jobs back from China. I’ll take jobs back from Japan. The Hispanics are going to get those jobs, and they’re going to love Trump.”
      “Free trade is terrible. Free trade can be wonderful if you have smart people. But we have stupid people.”
      “We won with poorly educated. I love the poorly educated.”

      First, did you know that US agricultural exports fell to $5.9 billion in 2018 from $15.9 billion in 2017? That’s a 62% decrease. Trump’s latest sabre rattling will bleed the agricultural heartland dry.

      1. You’re bragging about one cherry picked poll that gives Trump a 46% approval rating for the first time? Also from your article: “Trump’s approval has been with 35 to 46 percent throughout his presidency—a relatively small range.”

        If you bothered to look at the full spectrum of polling, you’d see the nation gives the con man about a 42.4% approval rate. 52.7% disapprove of him according to 538.

        https://projects.fivethirtyeight.com/trump-approval-ratings

        The trend for 2019 is not improving for Trump, especially as foreign policy clouds gather and the economy teeters on the brink of a self-created downturn.

  2. Having a President who is willing to deal with Chinese trade imbalances among other Issues with China is vital to the long term economic stability of the United States. Having a President willing to take a hit in popularity when it understandably proves to be a fight is outstanding. Having a equitable trade agreement with China going forward into the foreseeable future rather than kicking the same old problems down the road to the next guy is why this has to happen and why previous administrations were essentially to cowardly to take China on. First get the economy running on all eight cylinders, get unemployment down to record levels, then deal with China from a position of strength.

    Yeah. Well done once again Mr. President. I have to admit, you’ve surprised even me.

    1. Having a President who is willing to deal with all international trade PRACTICES, not perceived imbalances that are used as a political talking point, would be dramatically better. Trump is the very definition of unstable.

      The long term vitality of the US depends much more on its investment in decreasing debts, educating its citizens, maintaining its infrastructure, supporting global peace, and keeping America open for business.

      All those areas Trump has kicked down the road or is actively acting against the good of the people.

      The “deals” Trump struck with North Korea and Iran show what a hash he has made of international relations. Now the US is using a broken stick alone to combat China. Trump’s “my way or the highway” approach has yielded no results so far, but feel free to deceive yourself that America is greater now.

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