Trump To Slap China With Tens Of Billions In Tariffs As Early As Friday: WSJ

While trading desks are scrambling to goalseek the Fed's clearly hawkish statement into a dovish speech by Powell, in order to keep the Koolaid flowing at least a bit longer and stem today's bloodletting, one potential catalyst that could send the dollar even higher is a confirmation from the WSJ of what Politico and we reported earlier today, namely that the Trump administration, deepening its global trade offensive, is set to levy tariffs on tens of billions of dollars of Chinese goods in the coming week, perhaps as early as Friday—a move that is likely to spark heavy retaliation from Beijing.

What the WSJ adds to what we already knew, is that Trump's mind was already made up last week:

Senior trade officials in the White House, Commerce and Treasury departments, and the U.S. Trade Representative’s office met on the issue before President Donald Trump went to a summit of the Group of Seven industrialized nations in Canada on Friday, and agreed that the U.S. should move ahead with tariffs, said U.S. officials and others briefed on the talks.

While the odds are minimal, there is a chance that Trump will nix an escalation in the trade war: as the WSJ notes, "Trump still hasn’t given his final approval and could have second-thoughts about applying heavy pressure on China", perhaps because "the U.S. wants Beijing’s cooperation in its efforts to get North Korea to give up its nuclear weapons."

We doubt it. As we said earlier, "China was seen as playing a key role in getting North Korean leader Kim Jong Un to the table with Trump, who has consistently linked his trade demands to Beijing’s willingness to help on North Korea; now that the summit is over and the wheels are turning, Trump no longer needs China's aid."

And in his populist approach of focusing on his campaign promises and in hopes of distracting from the Mueller probe, Trump will do what he is confident will lead to more popular support: escalate the war with China at a time when the US economy is supposedly humming along.

So how big will be the next trade war round?

While the exact amount of goods subject to tariffs is still being finalized, the administration’s list was initially $50 billion in goods, and it is being refined as some products are taken off the list and others are added, following a public comment period.

But what is perhaps most notable is that as the WSJ highlights, "the agreement by the heads of the agencies represents an unusual moment of consensus on trade" in an administration often at odds with itself over how to proceed.

Trade hawks in the administration want to crack down hard on China, while globalists are seeking compromise.

If the WSJ report is accurate, this time even the globalists want to take on Beijing.

In other words, Gary Cohn resigned for nothing...

Comments

DingleBarryObummer Deep Snorkeler Wed, 06/13/2018 - 16:29 Permalink

I hope he knows what he's doing.  Going off the gold standard (and really bretton woods) is what caused the trade deficit, NOT tariffs or China closing themselves off etc, IMO.  I just see it as good because it's throwing a wrench into the globalist gears.  Don't expect rainbows and skittles all of a sudden though.  If he goes super tough on china and gives it up with the marijuana sillyness, I might even vote for him in 2020.

In reply to by Deep Snorkeler

random999 DingleBarryObummer Wed, 06/13/2018 - 19:19 Permalink

It seems the chinese have been reading too much MSM and are too used to the libtardglobalists.

They think they can put hard on hard against someone with all the cards. Only a libtard would fold.

 

They already tried to retalliate once, look how that worked out. What more can they do? Threathen to dump the dollar? They've already been working hard on that for a long time to now.

Sorry China, but i think you have no choice on this one.

In reply to by DingleBarryObummer

OhOh Quantify Thu, 06/14/2018 - 12:14 Permalink

China is cutting coal fired power stations- ameristan expanding, China is cleaning it's water supplies - ameristan has no money foe such mundane tasks,China is upgrading it's soil usage - ameristan is polluting it's water sources/cracking for "cheap energy, care to compare Chinas habitat and biodiversity numbers flora and fauna, China has ample population now in the future the robots will be the wealth creators.

In reply to by Quantify

Golden Phoenix Justin Case Wed, 06/13/2018 - 16:08 Permalink

The UK became great because it had cheap labor, abundant natural resources, and few restrictions on their use. Before they ran out they built ships so they could travel the world and harvest everyone else's. Then people got wise.

The US became great because it had cheap labor, abundant natural resources, and few restrictions on their use. Before they ran out they built ships so they could travel the world and harvest everyone else's. Then people got wise.

The US is at the end of that cycle and China is still near the beginning.

China's turn. 

That simple. Not saying you're wrong just playing reductionist.

In reply to by Justin Case

Grimaldus Justin Case Wed, 06/13/2018 - 17:18 Permalink

Chinese state troll much?

Chinese pirates will be treated as all pirates are---blown out of the water. If Chinese pirates want to trade fair then ok, we do business.

Not sure why Chinese are driven to piracy first.Why is that?

No honor?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Grimaldus

In reply to by Justin Case

Truth Eater Wed, 06/13/2018 - 15:42 Permalink

China does not get slapped with tariffs.  Tariffs are taxes put on imported products which are paid by American consumers.  The idea is that it brings them into a fair competition with American-made products by neutralizing foreign predatory trade practices.

edotabin mophead Wed, 06/13/2018 - 18:13 Permalink

Yes, but having things dumped into your country is an indirect tax as well. It lowers wages, reduces employment and puts a different mechanism into motion. The truth is somewhere in the middle, as usual.

I say that these things are simply being manipulated with a greater goal in mind.  The US, as the architect of globalization, uses the dollar to ensnare the other countries into the system. Once all the other countries have crossed the point of no return, the idea is to create the GLOBO or the Galaxian or whatever the hell the they wanted to call it. Then, they got Trump. Trump apparently doesn't seem to care too much about this and has no problem upsetting the apple cart.  He likes the idea of an international system but he demands that America be the undisputed top dog of this system. If someone doesn't like that, Trump flexes some muscles. Granted, America is nowhere near 50% of global output as it was in decades past but it is still an extremely important piece of the puzzle. 

In their attempt to foil Trump, a whole bunch of (otherwise inexplicable) things appear to be happening. On one hand you have the EU acting all big and bad and then wondering why Trump is destroying the order. If they are going to rebel against the American order then why are they complaining that he is destroying it? They are forced to show their hand. They are trying to do what Hillary was supposed to be doing.

I think China is in far too deep to really be able to do anything about it and that Putin is on the wrong side of the future. He can't hold out forever like that. While I understand his hesitation to play ball with people that have acted in bad faith (quick expansion of Nato eastward etc.) the future of the world is as one, just not as it's being pursued/forced and not so fast.

It would be nice to be able to have a civilized discussion about this and cut through the 7 tons of bullshit we have to read every day but.......  gotta grease the wheel I guess.

I now return you to your regularly scheduled programming of 7,000 articles to explain something simple and "multi-polar, multi-polar, multi-polar" and Putin, Putin, Putin, China, China, China and missile this and missile that. Each time someone farts, we get 400 articles about how that tiny event affects the formula outlined above and a few opposing views just to keep you even more engaged. It's mostly clickbait disguised as value.

 

 

In reply to by mophead