The markets around the world are rallying today post reports that the Trump administration is willing to sit down and talk with China about the trade disputes. Secretary Steven Mnuchin has invited the Chinese for talks, and the US believes it can pressure the Chinese to come to an agreement. WSJ notes;
The invitation from Treasury Secretary Steven Mnuchin comes as some Trump officials said they sense a new vulnerability—and possibly more flexibility—among Chinese officials pressured by U.S. tariffs imposed earlier this year and threats for more.
The Chinese are understandably weary of any potential negotiations, unless it has the full backing of President Trump, since in the end he makes all the final calls. In addition, it appears that there is no unified stance and approach amongst the administration. WSJ points out;
People who have followed the Trump administration’s China trade strategy closely cautioned against casting the invitation as a major breakthrough, saying the administration remained divided internally on its China strategy. They said talks would be unlikely to derail a planned round of tariffs on $200 billion in Chinese goods.
Post the WSJ announcement, President Trump himself reinforced the Chinese views that, he is the only person that matter by stating on Twitter;
Noted Chinese Expert Bill Bishops stated the below as well;
If Mnuchin is the most senior official at the talks it is not clear the chinese will bite…Liu he was already burned once after thinking he had a done deal, Mnuchin has 0 credibility in beijing
If history is any indication here, one should be cautious before pricing in too much of these talks. In the end, as with all matters in the Trump Presidency, President Trump decides, everyone else’s opinion is not worth much.
