"It was typical Trump on display on the world stage, refusing to be boxed in by anyone on anything. The president’s meandering statements and conflicting remarks left aides and allies alike guessing at his intended course of action — and his critics reviving questions about his fitness for office.
“Sorry, it’s the way I negotiate,” Trump shot back at a reporter during Monday’s press conference when questioned about whether there’s an actual strategy behind his constant back-and-forth on his positions regarding trade with China.
“It has done very well for me over the years,” Trump said. “It’s doing even better for the country.”
The G-7 followed a week in which the president flip-flopped positions — often within a day — on China tariffs, gun restrictions, purchasing Greenland, tax cuts to fight a potential recession and more. The uncertainty flowing from the president triggered tremors in markets and questions from politicians and business executives about where the president seemed to be taking the world’s largest economy." politico
https://www.politico.com/story/2019/08/26/donald-trump-g7-summit-confounds-1475891
“Be extremely subtle, even to the point of formlessness. Be extremely mysterious, even to the point of soundlessness. Thereby you can be the director of the opponent’s fate.” Sun Tzu
“All men can see these tactics whereby I conquer, but what none can see is the strategy out of which victory is evolved.” Sun Tzu
“Pretend inferiority and encourage his arrogance.” Sun Tzu
“Empty your mind, be formless, shapeless — like water. Now you put water in a cup, it becomes the cup; You put water into a bottle it becomes the bottle; You put it in a teapot it becomes the teapot. Now water can flow or it can crash.” Bruce Lee
On the other hand, Trump may just be a incompetent that other leaders are just getting the range on. We will know soon which it is.
https://twitter.com/parrilladiego/status/1166144889253507072?s=21
As Bannon has noted the IR department for CCP – the Party of Davos are doing everything to hobble Trump but his either balanced trade or de-coupling is the first step in taking on the CCP. What will CCP do with the massive overcapacity in China and what will they do when their annual $600 billion in USD from the US shrinks, when their companies need USD desperately and Yuan continues to weaken? What will they do as capital flight pressure intensifies further?
https://www.bloomberg.com/news/articles/2019-08-23/nike-challenger-says-quarter-of-china-sportswear-factories-idled
This is how supply chains reorient. CCP will have to continue devaluing Yuan to blunt the effect of tariffs. Note that Treasury has already labeled them a currency manipulator which now gives them the ability to enforce penalties.
Is he planning to consult the population of Greenland?
Monday’s WSJ says the U.S. is isolated and how dare Trump say Russia should be invited back to the G7; oh and wasn’t it great Macron invited the Iranian foreign minister to Biarritz. Sadly the press is uniformly dishonest with their “second thoughts” clickbait line. No wonder he gets results since you actually have to talk with him directly to achieve anything and all the expert gatekeepers are left flapping their lips with vapid commentary.
I can’t wait to see the reaction at next summer’s G7 when Putin turns up at Mar-a-Lago.
Sun Tzu babbled a lot of nonsense, but not all of his pontifications were oriental bs:
“If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle.”
So far in a career of over 50 years, President Trump is as winner by old Tzu’s metric.
I won’t comment on the wisdom of Trump’s goals, but his tactics are expressly designed to prevent his opponents from clearing their minds. By doing so they focus on his tactics and not their own strategy. That particular Jedi mind trick only works on the weak minded, which is to say most people in the median and politics. At least here in the US.
As for any agreement with the Chinese, his goal appears to be decoupling the US and Chinese economies and chaos serves that goal. A messy and clumsy way to go about it, but given that he’s not in full control of the ship of state, possibly the only one open to him.
His stated objective of re-industrializing the US will require planning, so I don’t see that happening.
Finally the treasury twiggs to China’s policy of currency manipulation? After years of their doing that as basic policy?
Someone correct me if I’m wrong, but I thought that the first policy of the CCP was to keep themselves in power. To do that, Pekin has to keep the people quiet, which means housed and fed. China has the usual human history of periods of centralized governance intersperced with times of chaos and competing mini-states. I hope that Trump has at least one dedicated aide who knows his or her history.
Incompetent is my bet.
It’s funny:
Journalists, think-tank denizens and academics who have never negotiated for a used car are “experts” on Trump’s methods.
These are the same people who have never managed anything bigger than a cubicle but are “experts” on management.
John,
I think he is a competent developer, but it remains to be seen if negotiations at this level can be successfully conducted as they are with drywallers and other subcontractors, who certainly can be worn down with an avalanche of BS. No deal is long term in that world. Everything lasts only as long as that job does. Construction people really, really want it to be OVER. Their agendas are very simple: “Make a buck.”
Trump has managed not to lose the fortune he inherited.
That is better than many (perhaps most) Second Generation Family Businesses (“SGFBs”).
If you compare him results to other successful people in the SGFB slice, he has not done as well as the most successful, for example, compared to Fred Pressman of NYC’s Barneys. (It is worth noting that in the Third Generation, the Pressman family ceased to be involved.)
People tend not to take Trump’s business career in context.
Chess analogies are fine if both players think they are playing the same game. If not, don’t be surprised if check mate results in your opponent getting up and punching you in the face.
Is the trade war really about getting a better deal or about getting China to “implode” – what does the leadership of the CCP think it is about? I think we could be in for the mother of “geopolitical miscalculations”.
Decoupling Nial Fergusson’s Chimerica is also the PRC’s goal. It will benefit the PRC far more than the US.
Given the level of industrial overcapacity that exists in the World, lots of luck with re-industrialization.
I’m not unimpressed by Trump due to his track record of repeated failures. That is how entrepreneurs learn.
I’m dubious about Trump because he always seems to fail in the same ways.
Can endless noise become a form of silence . . . endless tweets become the inky clouds which hide the squid?
That might mean something if the PRC were not consciously trying to get beyond low skill manufacturing of this type as Japan did in the 1970s.
OBOR is (perhaps) an attempt by the PRC to retain an interest in such things once they off-shore it. Let’s see if it works.
Naked Capitalism ran an article advancing just exactly that theory: that “pursuit of The Deal” is a cover under which to advance the Real Mission of “De-Couple China and America from eachother”.
It is titled: Trump’s China Trade War Gaslighting: Will There Evah Be A Deal? Here is the link:
https://www.nakedcapitalism.com/2019/08/trumps-china-trade-war-gaslighting-will-there-evah-be-a-deal.html
If this really is the goal, could Trump-dislikers decide that it may well be worth Four! More! Years! of pain in order to make de-coupling China from America complete and irreversible? If Trump could tear down and destroy the whole International Free Trade World Order, would that make it all worthwhile? Questions to ponder . . .
And what will they do when the Masses and the Rulers both discover that China has more Masses than the Communists have bullets?
As an Honored Personal Guest if not as a member of the reconstituted G8 . . .
This is one of the most arrogant op-eds I have read recently. Former NY Fed President Bill Dudley, one of the architects of the $25+ trillion bailout of Wall St, opining that the Fed should become political and take on another mandate to defeat Trump in 2020. Instead, what he’s done is ensure that Trump can blame the Fed for any weakness in the stock market and the economy. Trump can now add the Fed to his “enemy of the people” rhetoric and banishes any argument for the Fed’s independence.
https://www.bloomberg.com/opinion/articles/2019-08-27/the-fed-shouldn-t-enable-donald-trump
blue peacock,
This should not be surprising. Dudley who was the Chief Economist at Goldman Sachs and came to the NY Fed when Geithner ran the place and took over when John Podesta “chose” Geithner as Treasury Secretary in the first Obama administration.
Dudley in this op-ed is giving voice to the same mindset that gave us the Russia Collusion investigation. Unelected top government officials who believe they are the “guardians” of the country and know better than anyone else. Back in the old days the Fed Open Market Committee had a cross-section of people. Folks who were businessmen, farmers, commercial bankers and sometimes economists. Now we have the Cult of Ph.Ds. People who have never had to meet a payroll. Thousands of these Ph.D economists who put multiple decimal points to their forecasts and lay out their analysis in arcane language. Of course they’ve never got a forecast right and are always blindsided and for whom every problem is a nail to be hammered with the only tool they know – easy money.
I’ve never seen this level of derangement in the Acela Corridor that Trump has generated in these people.
John
I’m sure they’d like to escape the middle income trap. However the debt burden of the current excess capacity in low skill manufacturing is real as that has to serviced. A sudden decline in orders rendering a quarter of their sportswear capacity idle doesn’t help cash flow.
Macro analyst Jeff Snider penned a provocative note today. China’s economic and financial challenges in the current cycle pre-date the trade conflict.
https://www.alhambrapartners.com/2019/08/27/china-throws-more-stimulus-at-the-wall/
Barbara,
In my view Trump wants a balanced trade deal not the implosion of China. Lighthizer had negotiated one with his interlocutor with a few outstanding issues remaining. However when Xi and the CCP politburo came to the realization that the deal on the table would end what Diego Parrilla calls “beggar thy neighbor benefits”, they balked. And the deal unraveled.
Lighthizer’s testimony in 2010 before the US-China Economic and Security Review Commission is very instructive. In the current negotiation he wanted an agreement with real enforcement mechanisms not just a feel good document that he knew that the CCP would flout even before the ink was dry.
https://www.uscc.gov/sites/default/files/6.9.10Lighthizer.pdf
My own position on this matter is different. I believe that the time has come to fight and defeat the totalitarian CCP and I believe that can be achieved solely by economic and financial means and if necessary a financial decoupling. I don’t advocate a military conflict. I believe the Chinese people deserve an opportunity for self-determination without the jackboot of CCP authoritarianism. I am sympathetic to the people of Hong Kong, the Tibetans and the Uighurs, many of whom would like to be free of CCP repression.
Subs and Materialmen, no matter how competent, no matter how canny, no matter how shrewd, don’t have atomic weapons, the ability to print their own money and aren’t the linchpin of most global supply chains and the US’s biggest creditor.
A developer can almost always play “hardball.” I’m not sure we can here.
In the Army, they say, “The enemy gets a vote.”
Mike Tyson used to say, “Everyone has a plan until they get punched in the mouth.”
Mathias,
re “Is he planning to consult the population of Greenland?”
Hardly, even more so since he doesn’t speak the local language.
What I think more probable is that he will find … WMD all over Greenland, especially at a place named Thule, which naturally necessiates the US to immediately occupy the Island before the penguins, icebears and of course the vikings and inuit viciously attack the US.
Greenland’s WMD … are a national emergency that requires immediate action, without the hassle of … debating … in congress … as a democracy … requires.
But then, the story that Trump just bought Alaska for a true bargain price of just 500 billion dollar from Prof. Dr. Dr. Dr. Dr. B. E. Tray is probably untrue.
confusedponderer
calm down. If Denmark wants to sell it, we will buy it. If Germany had anything worthwhile to sell we would buy that as well. Or we could trade you Puerto Rico for a couple of factores. Oh no, not the Bosch plant. I hate the damned dishwasher we just bought. It is ridiculously over engineered.
If you are a multi-national corporation, the answer is probably less “get out of China” and more “sever your ties with the US.”
The PRC has a huge consumer market, interesting deals starting to bloom in Central Asia and Africa with OBOR and vast potential. However, it also has internal friction as in Hong Kong and a lot of debt.
Moving your corporate HQ to someplace inoffensive, for example, Eire, and keeping engaged in the PRC seems like the right course of action.
I have a few friends who are Ph.D. economists. Moist have access to tons of data and the software to crunch it. A few have common sense.
Most think starting a trade war with: 1) our biggest creditor; 2) the linchpin of most global supply chains; 3) an authoritarian state; 4) an economy that is still a command economy without sophisticated markets; and (5) the home of potentially the largest consumer market in the world only ends badly.
confusedponderer
On second thought, I don’t want any of your factories. They haven’t been doing well. Tell you what, we can trade you Puerto Rico for Garmisch.
Jack
Thanks for the link. Ideally China’s grossly unfair trade practices would have been addressed years ago through the WTO (perhaps alongside some tariff raising) with the ultimate sanction being China’s loss of membership. A thorough reform of the WTO would have to be a first step. Perhaps it is just too late for that now and in any case, Trump doesn’t do supranational bodies. The problem is that unilateral action by the US, though more expedient, carries much greater risks for us all. Anyway, the Chosen One has finally arrived with a mandate to do something and I wish him luck.
I share your view of the essentially evil nature of the CCP. It should be as ideologically anathema as the Soviet Politburo was. Yet Russia, with whom we share many aspects of our culture, remains the eternal enemy. Trump wants to change this too and I hope he succeeds. Exposing the roots of Russiagate would greatly help.
Ah well, maybe someone in Germany will be willing to sell the place to Trump where is ancestor was living once, before running to America (and away from military service in bavaria; iirc when the man wanted to return to bavaria he was rejected for that reason – and because he didn’t properly give notice of his departure) …
If I read of that you’ll be informed immediately.
That written, iirc Trump once said that he was born in a wonderful place in Germany – Queens (i.e. New York City). He told in Biarritz that he was happy he has german blood. How wonderful for him.
Ah well: If that means we still or again have colonies I for my part would very happy sell Queens to the US to a fair price.
As for over that engineered Bosch dishwasher, ah well, I assume that’s perhaps a German thing. I have a rather overengineered german coffee grinder (not just a shredder) and it works, despite the price, excellently.
And for “if Denmark wants to sell it” – there are a couple points to be considered:
* Denmark doesn’t want to sell
* the Greenlanders don’t want to be sold and …
* as far as I understand it, Denmark legally cannot and must not sell Greenland …
* because of this post colonial elf-determination thing.
When Alaska was bought that was different in terms of law.
But under Trump we have that re-colonial thing, when for instance US ambassaor Grenell (who, quote, ‘only says what the whitehouse says’)
orderssays that Germany should, right now, spend 2 or 4 or whatever other number % of the GNP for the militaryideally for US arms.That Germany already pays some 350 million a year for US bases in Germany, never mind. What can be said to that? IMO only masochists like Boris Johnson like bullies.
Well … I favour to move this fabulous “diplomat” Grendell to Brunai. He’ll probably like the place, wonderful weather, though he likely isn’t going to like the stoning of homosexuals. But surely they like to buy US arms so he’d be easily able to continue his marketing.
confusedponderer
You have gone mad in a very Teutonic way. you have no sense of humor whatever. If you don’t have anything coherent to write, don’t write at all.
The trouble with developers is that their style of negotiation, like Trumps, is transactional. There is no sincere attempt at building long term relationships because in the construct/develop world when the job is complete you walk away and find the next schmuck. You don’t need to care about what your previous customer now thinks about your transaction. If you do a crappy job, who cares? You never need to see the mark again.
The trouble for America is that it’s not President Trumps reputation to trash. America lent him her reputation to use on the promise that at the end of his term(s) he would hand it back in good condition. This is not happening. Countries that are not America are starting to take baby steps away from engaging with the U. S. I’m even starting to hear mutterings in Australia because President Trumps behaviour and demands are looking increasingly unbalanced.
The issues we see from outside the U.S. appear to be the exposure of the existence of the deep state that is aggressive to the point almost of nuclear war and is driving foreign policy, the refusal of Successive administrations to resolve domestic economic issues of infrastructure, healthcare while trying to export the “benefits” of these systems and climate change and the use of American financial power as a weapon of war.
Walrus,
You mean America can no longer have its yellow cake and eat it too? The export of “these systems and climate change ” is a major accomplishment of the Bilberberg set. Their newest invitee being the highly accomplished Stacey Abrahms; and Jared, can’t forget him….
I’m going to have to disagree with your Ph.D economist friends on several issues. I did however get a chuckle from your point that they have “tons of data and the software to crunch it”. To quote another Ph.D economist, former Fed chair Janet Yellen in a moment of candor after the 2008 financial crisis:
All their data and software crunching didn’t enable them to prevent the credit bubble from inflating in the first place when they had all the supervisory tools and the mandate to manage the safety and stability of credit institutions. Ivory Tower sophistry blinded them to the realities of credit markets and since in a bull market Wall St was “dancing until the music stops” as Chuck Prince noted they found rationalizations for the credit excesses. Many folks were sounding the alarms in the WSJ and on CNBC. Even Chuck Prince knew that Citi could blow up but while the bubble was inflating he was posting great quarterly numbers to much cheering.
I spent my career in banking and finance until I retired to our ranch over two decades ago. I keep tabs on the economic and financial pulse as I continue to advise our family office investments. I also remain on the boards of a few companies that have attempted to penetrate the Chinese “market”. I know ground truth there. As Japanese companies experienced a few years ago and Cathay Pacific has seen now, you will be lashed to the whipping post if CCP is displeased. The CCP will use you temporarily until they have your technology then you’ll be spit out. There are far too many examples to believe it is random. Rather it is a concerted strategy. IMO, a trade and financial war now to either balance the trading arrangement or my preference to destroy the authoritarian CCP is a small price to pay to prevent a catastrophic military war in the future.
Supply chains are reorienting already. And that will intensify further.
While headlines and your Ph.D economist friends as well as Bill Dudley and the rest of the Party of Davos are conflating weakness to the China tariff war, the reality of the data is that Asia and EU have been weakening for sometime. Well before any of the tariffs went into place. This despite the monetary stimulus after stimulus that the Ph.Ds have claimed for a number of years will achieve escape velocity.
Barbara,
You are correct that this should have been handled a long time ago. Lighthizer testified nearly a decade ago about Chinese abuse of the trading system. The CCP thumbed their noses at any adverse ruling by the WTO of which there were many. Heck, they even received loans from the World Bank because they claimed they were a developing nation and used proceeds from those loans for repression in Xinjiang as the Uighurs were sent to concentration camps for “re-education”.
https://foreignpolicy.com/2019/08/27/the-world-bank-was-warned-about-funding-repression-in-xinjiang/
There were enough warning signs including Cisco’s lawsuit against Huawei for gross IP theft. This was the early days of Huawei and if we had nipped it in the bud we wouldn’t be where we are now. This frankenstein is of our own making as our elites across the spectrum in search of short term personal wealth sold out our national interest. At least Trump is finally standing up and challenging this monster. We can criticize his approach but we have to credit him for having the courage to take on the CCP despite the howls of the fifth column agents of the CCP.
St Jean de Luz is a wonderful French Basque seaside resort town with a interesting history and good food. There is a fine beach and very walkable board walk. Louis XIV and Maria Theresa, the infanta of Spain, were married there in 1660 as part of the peace treaty between the two powers. The Church of St. John the Baptist, chosen because it is equidistant between Madrid and Versailles, is archaic and charming with separate galleries for men and women (until the 1960s), designated areas for the town worthies and a ship, the gift of Empress Eugenie (wife of Nap. III), suspended from the ceiling. Just around the corner is Maison Adam, started in 1660 to serve Macarons (still delicious) to Louis and his intended.
If you want more history Hendaye, where Hitler and Franco met in October 1940, is just down the road on the French-Spanish border.Hitler is reputed to have said that he would rather have three or four teeth pulled than go through another meeting with Franco.