So far there’s been one clear winner in Trump’s trade war with China – grain storage companies. With grain supplies piling up all over the country the Chicago Mercantile Exchange this summer had to modify its standard contract storage rates for grain from 5 to 8 cents per bushel. Unsold grain is being crammed into every available space, even idle barges. Winning a trade war is easy.
Meanwhile the losses have spread all over the country. Both Ford and GM announced major downsizing plans tied to Trump’s ruinous tariffs. Small manufacturers are under serious pressure from rising materials costs. A handful of new expansions have been announced, but negative impacts have been severe. The stock market erased all of the year’s gains.
Over the weekend at the G20 Summit in Argentina, Trump had a brief conversation with Chinese President Xi Jinping. Afterward, in true “Mission Accomplished” style, he announced a series of Chinese concessions backed by no evidence but his own tweets. According to the Donald, China is going to remove tariffs on our automobiles, start buying our grain again, and place new restrictions on the production of the drug fentanyl.
In exchange for these promises, Trump agreed to delay the imposition of the next round of increased tariffs until March, pending a formal agreement. That’s right. None of this new greatness is recorded in any written form at all. We received no binding commitments from the Chinese in exchange for Trump’s concession.
As you might expect, the Chinese account of this exchange (using Google Translate) differs substantially from Trump’s tweets, excluding any reference to auto tariffs, buying a bunch of new US products, or basically anything Trump tweeted other then new fentanyl regulations. It’s almost as if none of the Chinese commitments Trump describes were ever made.
Wall Street is thrilled, not because it sees a trade victory in the works, but because they see this exchange for what it is – Trump abandoning another half-baked project. It is clear now that the Trump administration will grant China whatever they want to bring an end to this mess, and dress it up as a victory. The morons who voted for Trump will accept it as proof of his greatness even as their personal losses mount. The Great China Trade War will play out just like the North Korea nuclear negotiations and the re-naming of NAFTA, just another trademark Trump fraud, paid for by his supporters.
On the bright side, this weekend’s events signal that the Trump trade fiasco, like the Trump administration itself, is nearing its end.