Jim Cramer: U.S. economic strength empowers President Trump to keep playing hardball on China trade

11 Comments

Reacting to China announcing Thursday that top U.S. and Chinese trade negotiators agreed to meet early next month for another round of talks, CNBC’s Jim Cramer says that U.S. economic strength empowers President Trump to keep playing hardball on China trade.

Matthew J. Belvedere for CNBC:

President Donald Trump can continue to take a hard line on China trade because the U.S. economy keeps chugging along, CNBC’s Jim Cramer said Thursday… Cramer was reacting to China announcing on Thursday that top U.S. and Chinese trade negotiators spoke by phone late Wednesday and agreed to meet early next month for another round of talks. U.S. officials confirmed the call but not the October timetable, saying only that talks would happen in the “coming weeks” in Washington.

“The Chinese still need it more than we do,” Cramer said, pointing to the strong U.S. labor market, with Thursday data on weekly jobless claims showing only a small uptick and the ADP private payrolls report for August coming in much better than expected.

MacDailyNews Take: Hopefully, the talks early next month produce a more balanced U.S.-China trade relationship along with verifiable protections of U.S. intellectual property.

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

11 Comments

  1. I truly want Mr. Trump to succeed. I want America to be “great” without question. But his undeniable track record of pettiness and deception and outright lies and moral (and financial) bankruptices do not give me confidence. Rather than attack ME.. someone please show me his track record of success so I can rally behind him.

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    1. The farmers should have diversified instead of depending on China for so much of their exports. If they can’t run a business without China, then they don’t deserve to be in business.

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  3. So Drump fscks us with his SALT tax. And fucks us again with sales tax disguised as Tariffs. Plus he hates Mexico and anybody that doesn’t agree with him. And he hates the military and their families. A fscking lunatic prick. Hope he has a coronary soon.

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    1. If this were true why is inflation under 2%. Why, because China keeps de-valuing their currency (printing more money), making less profit and charging less for the exported product. Resulting in China’s poor economic performance. Also, there is already a new better trade deal with Mexico and Canada. Now Congress needs to sign it. Hates the Military?? Where is this coming from?

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  4. Quoting Jim Cramer at CNBC? Really?!! Just another self-interested talking head blathering away.

    For every Cramer there’s a dozen real analysts to will point to the lack of impact the trade war has had on China, and how it will withstand the trade war beyond Trump’s administration. Here’s the conclusion from one such analysis at ZeroHedge, a nice mainstream libertarian economic site (far more info at the site than you’ll ever get from listening to a lifetime of Cramer):

    “China’s current strategy likely has a long time horizon embedded in it. This is unlike China’s previous strategies, which had sought to prevent a trade war at first, and then to quickly reach a trade deal. The time horizon of the strategy may go beyond the life cycle of the current US administration. As China sees it, political dynamics in Washington DC imply that the US’s attitude toward China is unlikely to change course, no matter which party is in power. A reference point would be the US-Japan trade war, which lasted more than a decade.

    The future course of the trade war will, therefore, largely depend on the US’s trade war strategy. The baseline scenario is for prolonged trade tensions with some back and forth. Tension may escalate at times, while trade talks and perhaps partial agreements may help ease the tension at other times. That said, the likelihood of a comprehensive trade deal is small, and the main downside risk to this baseline is if US-China tensions escalate substantially on non-economic fronts – security, geopolitical, or China’s sovereignty issues – this could derail the trade talks leading to a full-blown trade and economic war.”

    https://www.zerohedge.com/news/2019-09-03/how-will-china-handle-trade-war

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    1. And here is some analysis from Paul Craig Roberts about the situation with how globalization has moved America’s economy to China and other locations. PCR is the former Assistant Secretary of the Treasury under Reagan, and is prescient when describing how globalization under neoliberal economics has affected corporations like Apple, and its relationship to the American economy:

      “…Tariffs are not a solution. The Trump administration says that the tariffs are paid by China, but unless Apple, Nike, Levi, and all of the offshoring companies got an exemption from the tariffs, the tariffs fall on the offshored production of US firms that are sold to US consumers. The tariffs will either reduce the profits of the US firms or be paid by US purchasers of the products in higher prices. The tariffs will hurt China only by reducing Chinese employment in the production of US goods for US markets….

      One consequence of Washington’s universal economic ignorance is that the financial media has concocted the story that “Trump’s tariffs” are not only driving Americans into recession but also the entire world. Somehow tariffs on Apple computers and iPhones, Nike footwear, and Levi jeans are sending the world into recession or worse. This is an extraordinary economic conclusion, but the capacity for thought has pretty much disappeared in the United States.

      In the financial media the question is: Will the Trump tariffs cause a US/world recession that costs Trump his reelection? This is a very stupid question. The US has been in a recession for two or more decades as its manufacturing/industrial/engineering capability has been transferred abroad…

      How does a country recover when it has given its economy away to a foreign country that it now demonizes as an enemy? What better example is there of a ruling class that is totally incompetent than one that gives its economy bound and gagged to an enemy so that its corporate friends can pocket short-term riches?

      We can’t blame this on Trump. He inherited the problem, and he has no advisers who can help him understand the problem and find a solution. No such advisers exist among neoliberal economists. I can only think of four economists who could help Trump, and one of them is a Russian.

      The conclusion is that the United States is locked on a path that leads directly to the Third World of 60 years ago. President Trump is helpless to do anything about it.”

      https://www.paulcraigroberts.org/2019/08/21/what-globalism-did-was-to-transfer-the-us-economy-to-china/

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  6. China knows how to play long ball. They certainly wi not hand Trump a victory prior to the election and possibly ensure another four years of random bluster and unpredictability from a man whose word is worthless.

    You don’t see any Democrats talking about escalating the trade war and they certainly won’t carry Trump’s trade war banner if they do gain the presidency. If anything, they would seek closer ties in the clean energy sector and rejoin the Paris accords. Expect China’s meddling in our next election to rival Russia’s.

    So, no, China is no rush to settle this in any way, shape, or form. Although one could reasonably foresee that if the economy begins to tank, T will call it all off, reset things to what they were before he declared war, and claim a victory no matter how Pyrrhic.

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