It was only a few weeks ago when I wrote that Trump had long ago already lost his trade war with Chine. The two biggest takeaways I put in there to make my point was that Chinese President Xi Jinping had two built-in advantages over Emperor Numbus Nuttus. The first was that while Trump was powerless to control what the Federal Reserve Board did with the economy, Xi the dictator could manipulate both his currency and his economy at will. The second was that while Trump had to worry about any effects he had on the economy tanking his popularity for the election, Xi had no such compunction, in China the peasants don’t elect the President.
I closed with the fact that if Xi got fed up with Trump’s bullshit, and felt that he could get a better deal with the Democrats, he’d simply engineer a U.S. recession by manipulating his tariffs to force Trump’s macho into retaliation. I’ll take my Nobel prize in clairvoyance now.
What did Trump do just a week or so ago? Basically, he finally admitted that U.S. consumers are the ones who actually paid the China tariffs when he announced that he was delaying the start of the next round of tariffs until December 15th, after the Christmas shopping season. This should have bought Trump time for the continuation of his vaunted “negotiations” with China for a new deal, especially since they were practically willing to let him put condos up in Tianenmen Square if he’d just call off his tariffs.
Seems like neither Wall Street or Xi Jinping got that memo. The stock market dropped more than 700 points last week on fears of a Trump recession, and Trump’s trade war with China. And then it dropped another 630 today after Trump’s latest Twitter fart against his Fed chair, Jerome Powell, and ordering US companies to start hunting up replacement sources to China for their goods and services. And apparently Xi isn’t interested in giving U.S. consumers a very Merry Christmas, seeing as how the Chinese don’t celebrate Christmas and all.
Look, from everything I can see, there was no logically pressing reason for Xi to go ahead and slap another $75 billion in tariffs on the US today. After all, Trump’s tariffs are hurting both the Chinese economy as well as Chinese consumers. And with Trump desperate to cut some kind of a deal, any kind of a deal with China to stop a recession from screwing up his reelection chances, Xi’s safer bet would have been to continue to negotiate with Trump, and see how much more artificial sweetener Trump would put in Xi’s cup of coffee.
But Xi went ahead and slapped another $75 billion in punitive tariffs on the U.S. today anyway. I can only draw one conclusion from this. And that is that Xi Jinping is sick of Trump’s shit, and is ready to suffer another 20 months of belt tightening to start a U.S. recession that will boot Trump out of the White House. Xi knew that Trump’s voracious ego would require him to strike back, no matter how blindly and stupidly, and he was right.You’ll notice that Trump waited until after the markets closed to announce his retaliation? It won’t matter. Wall Street isn’t going to forget these new rounds of tariffs by Monday, and that doesn’t take into account the rolling dumpster fire that Trump is going to trundle into the G-7 meeting this weekend. I have a feeling that most economists most avid prayer this weekend is going to be that the stock market building blows up before 9 a.m. on Monday morning.
So, welcome to the Trump Recession my good friends and neighbors. Or should I call it the Trump-Xi recession? You won’t feel it right away, remember, it takes 6-8 weeks for the effects of tariffs to be felt after their imposition, but it’s a-comin’. And if this round doesn’t do it, I’m betting you’ll see another “Trumped up” (pun intended – round of tariffs out of Xi around the end of September, ready to kick in by Black Friday. It looks to me like Xi has made up his mind, Trump has to go. What’s that old saying about my enemy’s enemy being my best friend?