Trump Distances Himself From Mnuchin After Trade Hawks Knock China Deal

After praising a weekend Trade deal with China earlier in the week, President Trump has now distanced himself from the "framework" between the two countries which has been widely panned by China hawks. Treasury Secretary Steve Mnuchin has taken heavy criticism over a tarriff "truce" with Beijing, as well as an agreement which would reverse a recent ban on companies selling to Chinese telecom giant ZTE Corp. 

“Our Trade Deal with China is moving along nicely, but in the end we will probably have to use a different structure in that this will be too hard to get done and to verify results after completion,” Trump said in a Wednesday tweet.

Trump's about-face may not bode well for Mnuchin's tenure in the administration. 

After boasting of the deal’s benefits for farmers in tweets on Monday, Trump first indicated on Tuesday he was having second thoughts as some of his loyalists publicly criticized the agreement. Asked if he was pleased with the direction of his administration’s negotiations with China, Trump told reporters “no, not really.” He later added, “they’re a start.” -Bloomberg

Following last weekend's agreement, the Trump administration said it would back down from prior threats of new tariffs against China after the two nations agreed to “substantially” downsize the U.S. merchandise trade deficit, which hit a record $375 billion last year. In response, Beijing promised to “significantly” increase US purchases going forward - albeit with no dollar figure attached. The White House, however, gave assurances that China would cave to its demand for a $200 billion annual trade-gap reduction. 

On Tuesday, China announced that it would slash its auto tariff, while the administration said it had agreed on the "broad outline" of a deal that would save imperiled Chinese telecom giant ZTE Corp., according to the Wall Street Journal

The US has promised to remove a ban on US companies selling components to ZTE - imposed last month, purportedly because ZTE failed to fire certain employees and cut bonuses according to the terms of a settlement after it was caught selling US goods to Iran.

While Mnuchin insisted Tuesday morning that there was no "quid pro quo" involved in the ZTE aspect of the negotiations, President Trump began to distance from the talks - stating on Wednesday that the US and China have yet to reach a deal on trade, and adding that he is "not pleased" with how the talks are progressing. While the talks with China were "a start", Trump said he's not yet satisfied.

Trump’s about-face on ZTE adds to his allies’ concerns. The Commerce Department announced April 16 that the company would be cut off from its U.S. suppliers, crippling its business, for what Commerce Secretary Wilbur Ross called “egregious” violations of U.S. sanctions. But Trump said on Tuesday that he had agreed to re-examine the matter as a personal favor to Chinese President Xi Jinping. -Bloomberg

Trump now says that the U.S. may instead require that ZTE clean house - appointing a new board of directors and pay a "very large fine" potentially as high as $1.3 billion. 

Fourteen Republican senators including the party’s second-ranking leader, John Cornyn of Texas, joined 13 Democratic and independent senators in sending Trump a public letter Tuesday urging him not to soften ZTE’s punishment. They called ZTE’s sanction violations “serial and pre-meditated.”

Mnuchin Slammed

Former White House chief strategist Steve Bannon took Mnuchin to task on Monday over the weekend deal, telling Bloomberg that Trump "changed the dynamic regarding China, but in one weekend Secretary Mnuchin has given it away,' adding that Mnuchin "misses the central point" of the economic competition between the two nations

“They’re in a trade war with us and it hasn’t stopped,” Bannon said. “Mnuchin has completely misread the geopolitical, military, and historical precedence and what President Trump had done was finally put the Chinese on their back heels.”

Marco Rubio (R-FL) also slammed the weekend deal, tweeting on Tuesday "Sadly #China is out-negotiating the administration & winning the trade talks right now. They have avoided tariffs & got a #ZTE deal without giving up anything meaningful in return by using N.Korea talks & agriculture issues as leverage."

 Senator Steve Daines (R-MT) also criticized Mnuchin during a hearing at the Capitol on Tuesday, stating:

It’s very important as we engage in these negotiations, we can’t just see this as a standard trade dispute with China,” Daines told the Treasury secretary. “We must keep in mind China’s long-term strategic approach and their long-term goal of becoming the world’s superpower, militarily and economically.”

Doesn’t make sense to have the Treasury secretary negotiating trade policy -- that’s the USTR’s job,” said former Nucor Corp. CEO Dan DiMicco told Bloomberg, which notes that DiMicco was an adviser to Trump’s campaign and presidential transition who now sits on an advisory committee for U.S. Trade Representative Robert Lighthizer.

“We supported Trump in the elections, support a lot of the things he stands for, and we need him to come through on trade like he promised,” DiMicco said.

As Bloomberg notes, "Mnuchin and White House economic adviser Larry Kudlow are free-trade supporters regarded as more conciliatory toward Beijing than Lighthizer and White House trade adviser Peter Navarro, the administration’s fiercest China hawk. Mnuchin said in an interview on CNBC Monday that he speaks with Lighthizer ten times a day and that he and the trade representative and Ross are “unified” on trade strategy."

Comments

DingleBarryObummer Wed, 05/23/2018 - 20:13 Permalink

Any trade war big enough to make a marked improvement on US Manufacturing would cause the DOW to drop thousands of points, so yall can just forget about it.   Trump doesn't have the stomach for it.

Good cop bad cop with mnuchin is punting and kabuki BS

beemasters Labworks Wed, 05/23/2018 - 22:07 Permalink

"You will find a way to pretend that whatever good comes from this either doesn't exist or isn't due to Trump's actions."

No...Not me. Trump is the reason the sun still rises in the morning. Like you, I thank Lucifer everyday he is the POTUS. He is the reason we are still alive, the world doesn't end, the universe doesn't collapse into the black hole and the list goes on and on. People say I'm giving him too much credit, but like you, I refuse to listen because I'm sooo in love with anything Orange.

In reply to by Labworks

Thordoom DingleBarryObummer Wed, 05/23/2018 - 20:55 Permalink

The idea that US will become once again manufacturing powerhouse is so idiotic and out of touch with reality that it is obvious Trump lives in the past and has no idea where the world is heading. Those jobs will never come back. US has to focus on high tech and services they provide.The manufacturing will only get worse in US and world as robots will take workers out of manufacturing very quickly.He live in the utopistic world.

In reply to by DingleBarryObummer

Let it Go Thordoom Wed, 05/23/2018 - 21:13 Permalink

Very true! The structural issues that haunt America's competitiveness far outweigh the benefits of lower taxes. The ugly truth is American companies have little reason to bring jobs home, the logic that lowering corporate income tax will create a massive flow of jobs to our shore is flawed. 

Also hidden within the tax bill are some provisions aimed at past violations of US tax laws that can lead to both civil fines and criminal prosecution for the corporate managers and their legal counsel who designed some of the schemes companies have used in the past. This could prove very important. More on why jobs may not come back in the article below.

 http://US Companies Have Little Reason To Bring Jobs Home html

In reply to by Thordoom

nekten Thordoom Wed, 05/23/2018 - 21:43 Permalink

The US can have mfg back, but it's going to take an increase in skills that the schools and "educators" have deemed "not needed for the knowledge worker."

The typical American worker is still head and shoulders above the European in work ethic. This counts big.

Education should provide knowledge as well as hands-on skills. IMO the knowledge should include the basics of the tools we use everyday. This means a much higher level of basic technical knowledge--for both genders.

In reply to by Thordoom

rtb61 DingleBarryObummer Thu, 05/24/2018 - 02:50 Permalink

Trade war, turned into a copyright war and bogged down to nothing and of course they can not say anything about it because it really bad optics for the US, protecting copyright and profit of the few at the expense of industry and the labour of millions.

China has the US by it's copyrighted genitals and is squeezing and it doesn't have to squeeze all that hard to make the US just look totally stupid, sort of stumbling about clutching it's genitals, all confused and sorry for itself, what a fucking mess. War industrial complex out of control, infrastructure collapsing, global public opinion getting worse and worse by the day, nonsense trade war, real copyright war, world war three as the corporate wars, government departments as being run by corporate stooges starting to collapse, massive corruption in it's democratic processes on public show, the most hated government in US history not just in the US but globally (that would be mission accomplished I guess ;D ).

In reply to by DingleBarryObummer

Truth Eater Wed, 05/23/2018 - 20:23 Permalink

Send a pencil neck nerdy banker man to do your bidding in a trade war and the only winner will be the bankers.  For cryin out loud Trump!  Stop hiring the wrong people!  You don't fight the swamp monsters by adding more to the swamp.

Labworks Wed, 05/23/2018 - 20:29 Permalink

The idiot took credit for his bigly stock market rally now he's going down with it. It was enough to buy some votes from your stupid asses, now he's robbing you and buttraping you with his friends at goldman and all other corrupt places...

 

Trade war ends before it even begins....China playing with the little brat as usual...it's a spiritual and moral thing, there's none of that in the west.

Yen Cross Wed, 05/23/2018 - 20:38 Permalink

   This would be a perfect time for Trump to put some pressure on the Chinese in order to take some heat off the $usd before the June rate hike.

   It doesn't look like 'Rocket Boy' is going to follow through with the meeting anyways.

 Mnuchin is Pizza Boy, Hollyweirdo poll smoker.

pndr4495 Wed, 05/23/2018 - 20:45 Permalink

Until the world's central banks all go down the tubes as well as all of the CFRs of the world - Trump will be servant to his lender. it won't matter one bit that he happens also to be President of the United States. Trump is no Cincinnatus.

Chris2 junction Wed, 05/23/2018 - 21:54 Permalink

Soros bought IndyMac for pennies on the dollar and turned it into OneWest Bank. The got a deal with FDIC where when they foreclosed on a typical house in the foreclosure capital of the USA Stockton, CA they made $100K which is why they wouldn't modify any loans. Google that you will see thousands of complaints along these lines. Soros pal of Obama was given this golden goose. So many foreclosures wrecked neighborhoods then squatters moved in, vandals and it is a huge ghetto now.

Jew destruction machine.

It just occurred to me, is Trump hiring these people to put them in the bright spotlight so the public can see them and  how corrupt and destructive they are?

If not then he is just self destructive and crazy.

In reply to by junction

yvhmer Chris2 Thu, 05/24/2018 - 02:25 Permalink

It clearly goes to show that the guiding principle: America First is clearly not in the minds of dual state passportholders,  especially when it concerns us/Israeli passport holders.  

It seems, it is quite difficult to find US only people who can pull it off. 

So, what you are watching is the series: "you are fired" on steroids.  With the added benefit of seeing how slimey everything goes.  

In reply to by Chris2

ArmchairQB Wed, 05/23/2018 - 21:11 Permalink

So he surrounds himself with GS fucks and he is surprised?  The whole of his upper administration were/are all GS fucks.

 

You reap what you sow... MF