Trade War

The Trump Slump: ‘Tariff Man’ roils the markets with false claims of trade war ceasefire (Updated)

by

The stock market surged on Monday after a 90-day ceasefire of the trade war between the U.S. and China was announced after the G20 Summit, with the hope that it would ratchet down tensions between the two nations in the long term and provide relief for companies that have been feeling the pain from tariffs.

Then investors came to the realization that President Trump’s claims of Chinese concessions in his trade war with China were not actually agreed upon. “We don’t yet have a specific agreement on that”: White House backtracks on China deal:

President Donald Trump’s victory lap on a temporary detente in the trade war with China might be a little premature — and misleading.

In a series of tweets over the weekend, the president celebrated the modest compromise on trade he reached with Chinese President Xi Jinping in Buenos Aires on Saturday in which Trump agreed to temporarily hold off on increasing tariffs on $200 billion of Chinese goods in exchange for China purchasing a still-to-be-defined amount of American-made products.

Trump declared that China had agreed to reduce and remove tariffs on cars coming into China from the US, and he wrote that China intends to “start purchasing agricultural product immediately” from the US.

“Relations with China have taken a BIG leap forward!” he tweeted.

It’s not clear, however, how much Trump’s declarations line up with reality. White House aides and China have told different stories than the one Trump is offering on what exactly was agreed to, and what’s going to happen and when.

“It doesn’t seem like anything was actually agreed to at the dinner and White House officials are contorting themselves into pretzels to reconcile Trump’s tweets (which seem if not completely fabricated then grossly exaggerated) with reality,” one JPMorgan analyst wrote in a note to clients reported by CNBC’s Carl Quintanilla.

“This is a situation that’s played out over and over again throughout Trump’s presidency — he makes a declaration, only to leave aides, his counterparts, and reporters scrambling to figure out what the truth actually is.”

Read more

Republican economic policies cause their constituents to fall farther behind the rest of the country economically

by

John Harwood at CNBC has an important report on a new Brookings Institution study documenting that “economic divergence is as central to 21st century polarization as race, gender and religion.” These charts show how Democrats represent the growing modern economy – and how Republicans are left behind:

[T]his year’s midterm elections affirmed this much: in Washington, the two parties now speak for dramatically different segments of the American economy.

Republicans represent the smaller, fading segment, with less-educated, more-homogenous work forces reliant on traditional manufacturing, agriculture and resource extraction. Democrats represent the larger, growing one, fueled by finance, professional services and digital innovation in diverse urban areas.

Screen Shot 2018-11-20 at 5.48.21 AMh/t 270towin.com – 2018 House Election Interactive Map. Note: A geographic map is deceptive, because there is a lot of “big empty” space in the middle of the country and in the west. A cartogram map weighted for population is more accurate, but one is not yet available for the 2018 congressional election.

Donald Trump carried 2,584 counties across the country, but calculations by scholars at the Brookings Institution showed that the 472 counties Hillary Clinton carried accounted for nearly two-thirds of U.S. economic output.

Now, new Brookings calculations show the same from 2018 House elections. With a few races still undecided, districts won by Democrats account for 61 percent of America’s gross domestic product, districts won by Republicans 38 percent.

BROOKINGS_DIST_BARS_0

Read more

When is a trade deal not a deal? When Donald Trump is the negotiator

by

Donald Trump needed another distraction yesterday, so he announced that he had reached a trade deal with Mexico to replace NAFTA.

Yeah, not even close.

As Steve Benen notes, Trump doesn’t seem to realize his new trade deal isn’t a trade deal:

Let’s back up to provide some context. For about a year, the Trump administration has engaged Canadian and Mexican officials in renegotiating the terms of the existing NAFTA agreement, which the president claims to hate, despite never fully explaining why. The months-long process has been a struggle, and by all accounts, the countries are not yet close to a trilateral deal.

Recently, however, Trump’s team has been working directly with Mexico on a provision related to auto manufacturing, and yesterday, the White House announced that those talks resulted in an agreement. That’s not nothing, and it may move the administration closer to its goal.

But it’s only a step. The Atlantic’s David Frum joked yesterday, “Congratulations to the Trump administration on reaching a preliminary agreement in principle to begin negotiations with half of America’s NAFTA counterparties with a view to revising one section of the trade agreement!”

Read more

War of the Roses: the ‘Kochtopus’ vs. the Party of Trump

by

Hopefully this family feud will end as badly for them as it did for Oliver Rose (Michael Douglas) and Barbara Rose (Kathleen Turner) in The War of The Roses (1989), with both sides destroying one another in the bitter end.

Maybe they can use one of the chandeliers at Mar-a-Lago, or the Trump Hotel in D.C.

The “Kochtopus” network and the Party of Trump fka the Republican Party apparently are feuding with one another after having enabled one another in 2016 in order to achieve their mutual goal of trickle down tax cuts for corporations and wealthy plutocrats. Now that they got what they both wanted, their annoyances with their differences are now coming to the fore.

Top officials with the “Kochtopus” donor network affiliated with billionaire industrialists Charles and David Koch last weekend sought to distance the network from the Republican Party and President Trump, citing tariff and immigration policies and “divisive” rhetoric out of Washington. Koch group condemns ‘divisiveness’ and ‘lack of leadership’ in Washington:

At a gathering of hundreds of donors at the Broadmoor resort here, officials reiterated their plans to spend as much as $400 million on policy issues and political campaigns during the 2018 cycle. Earlier this year, they announced heavy spending aimed at helping Republicans to hold the Senate. But in a warning shot at Trump and the GOP, network co-chair Brian Hooks lamented “tremendous lack of leadership” in Trump’s Washington and the “deterioration of the core institutions of society.”

He called out the White House and Trump-allied GOP lawmakers, particularly over trade policy and increased federal spending, and added that “the divisiveness of this White House is causing long-term damage.”

Read more

July jobs report is below expectations

by

Steve Benen has the July jobs report. American job growth falls short of expectations in July:

Ahead of this morning’s new jobs report, most projections said the U.S. economy added roughly 190,000 jobs in July. Apparently, we didn’t do quite that well.

The Bureau of Labor Statistics reported this morning that the economy added 157,000 jobs in July, while the unemployment rate inched lower, going from to 4% to 3.9%. It’s the second lowest monthly jobs total of the year.

That said, the revisions for the two previous months – May and June – looked very good, with a combined gain of 59,000 jobs as compared to previous BLS reports.

JulyJobs

In terms of the larger context, this morning’s data points to 1.5 million jobs created so far in 2018, which is evidence of a healthy job market, and which is an improvement on the totals from the first seven months of 2016 and 2017. That said, this year’s tally is still short of the totals from the first seven months of 2014 and 2015.

Here is another chart, this one showing monthly job losses/gains in just the private sector since the start of the Great Recession.

JulyPrivate

The Washington Post points out that wage growth remains stagnant (so much for the GOP tax cut scam):

The U.S. economy has added jobs for 94 consecutive months, a record streak that shows no signs of waning despite President Trump’s escalating trade war. Many business leaders have warned the standoffs with China, the European Union and other major trading partners could cause layoffs if tariffs stay in place for an extended period of time.

Read more