What total insanity!
Now China's Xi gave a speech last night promising foreign companies greater access to China’s financial and manufacturing sectors, pledging Beijing’s commitment to further economic liberalization. In a speech that officials had billed as a major address, Mr. Xi said Tuesday that plans are under way to accelerate access to the insurance sector, expand the permitted business scope for foreign financial institutions and reduce tariffs on imported automobiles and ownership limits for foreign car companies.
Though these were vague statements, the markets instantly reacted as if the Trade War ended and we flew back to the highs that we lost yesterday afternoon (still not strong bounces). There's nothing really to do but sit back and see what sticks but, far from a victory for Trump, Xi took the time to criticize the US President and his policies. As noted in the Wall Street Journal:
Many of the initiatives Mr. Xi offered up have been previously proposed. That, along with the lack of definite schedules for action, drew some skeptical reviews from foreign business executives and Chinese researchers alike. “We have every intention to translate the measures into reality sooner rather than later,” Mr. Xi said, though he didn’t provide a clearer timetable for those or the other measures announced.
If Trump is smart (debateable), he'll thank Xi and move on – WITHOUT declaring victory. Only by stressing cooperation can we back off the cliff of this Trade War but, of course, the cooperation Xi envisions is essentially Globalization – the very thing the Trump Administration and their…