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We're at the mercy of Trump and his tweets

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08.08.2019

Two things are clear in what is happening between the US and China. First, the US is really struggling to come to grips with the rising (risen) China. Second, Donald Trump, contrary to his self-assessment, is not a negotiator's bootlace.

Trump's so called "trade war" is totally ill-conceived and counterproductive to both sides and to the world economy. What, realistically, can he hope to achieve by way of a "deal"?

It is hard to believe that this will "fix" the US trading deficit with China - there's virtually no effect so far. Sure, it is having an impact on China's growth rate, but in the context of a broader collapse in world trade that is affecting all trading nations.

Trump has completely failed to recognise, indeed has underestimated, China's capacity to respond to his tariff increases. China's initial response was very clever, to announce counter tariff increases on significant, iconic, US products - Kentucky bourbon, Harley-Davidson motorbikes and mid-western farm products such as soybeans.

Then, this week, devaluing the yuan, only a little, but it made the point about just how easy it would........

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