Larry Kudlow refuses to lie for President Trump. Throws him under the bus contradicting his claim that China is paying the tariffs he’s imposing!
By James DiGeorgia
We have repeatedly warned that U.S.- China trade negotiations were in danger of failing because of President Trump refusal to lift existing U.S. tariffs, even if the Chinese agreed to his terms. The frustration over President Trump’s intractable position has now caused Beijing to threaten to walk away from negotiations; sources tell Bloomberg.
Despite the Chinese and Trump doing everything they can, since the end of discussions on Friday, to keep appearances as optimistic as possible by stressing negotiations are continuing. But it’s clear to those close to the negotiations that both are just trying to prevent a global financial nose dive and setting of a global economic recession.
Efforts to keep a positive outlook for negotiations may be fruitless at this point according to sources close to the talks according to Bloomberg and other news outlets. U.S. officials are increasingly convinced, Chinese hardliners are winning the internal debate against the reforms in Beijing, Trump is demanding.
President Donald Trump for his part continues with unabashed comments on negotiations via social media that will only be making getting the Chinese to come back to the negotiating table. In one of his Tweets on Saturday he asserted that the U.S. is “right where we want to be” at this point in negotiations. The absurdity of taunting the Chinese, like he has been doing the House of Representatives over impeaching him brings to mind George Conway’s repeated criticism; this President is incompetent, and Sen. Lindsey Graham’s belief the President is not sane.
The International Monetary Fund (IMF) and other economists are warning the global economy will slow to the worst rate of growth since the immediate aftermath of the 2008 financial crisis if Trump’s U.S. global trade war continues.
U.S. officials are expected to announce details on how and when the 25% tariffs will be imposed and on what products. Many political observers expect Trump to also implement his tariffs on all of China’s remaining imports -- some $300 billion annually.
Beijing will likely respond in a few days after it determines its retaliation for last week’s decision by Trump to impose a 25% punitive on $200 billion imports annually.
Meanwhile, Trump’s top economic adviser Larry Kudlow playing down the economic impact of an escalation of tariffs by both sides conceded that economists and businesses analysts are correct in challenging President Trump’s assertion that China is and will pay the cost of the tariffs.
Kudlow on Sunday raised the possibility President Trump, and President Xi Jinping might meet on the sidelines during the Group of 20 Summit in Japan at the end of June. With that hope expressed Kudlow is clearly saying this dramatic and potentially economic disastrous trade war will continue through at least the end of June.
Larry Kudlow also tried to assure that losing some U.S. jobs (700,00 to 1 million) and… ”taking a hit to growth was a reasonable risk to take to correct “decades” of unfair trade practices by Beijing, especially now because the U.S. economy is strong.”
The move to extend tariffs to all remaining imports from China would take several months, Kudlow said. But the tariffs remained part of an effort to get China to end its theft of intellectual property and other economic practices rather than a longer-term economic tool, he said.
“It is a negotiation and part of the negotiation is taking action,’’ he said.
While the Trump administration has taken that line for months, there are also some signs the president’s self-proclaimed fondness for tariffs may be backfiring.
According to people close to the talks, as the sides marched toward a deal that they hoped initially to close last week, they had gotten stuck in recent weeks on the question of lifting the U.S. tariffs in response to Chinese steps to address American complaints. When the U.S. insisted that it would leave tariffs in place, the Chinese threatened to blow up the discussions, according to two people familiar with the discussions.
That was followed by China’s early-May move to -- according to U.S. officials -- backtrack on its agreement to enshrine concessions in law, offering instead to issue directives by the State Council. That reversal spurred Trump’s move last week’s to raise tariffs from 10% to 25% on a $200 billion tranche of imports from China.
Last week’s talks between Vice Premier Liu He, Xi’s top economic emissary, and U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin, were focused on that changing commitment but made little progress, according to people familiar with the discussions.
Lighthizer and his office didn’t respond to a request for comment.
Both sides are eager to portray the discussions as productive and ongoing in a bid to keep markets calm and ward off broader economic fallout and damage to things like business investment and sentiment. Ironically, such efforts could reduce the possibility of a deal and prolong the tariffs, one person close to the talks said. That’s because both sides will feel less pressure to do a deal if their economies and markets hold up.
People close to the talks said finding an agreement is likely to prove increasingly difficult with hardliners on both sides seeing the latest breakdown as evidence the other side cannot be trusted.
After polite words by both sides on Friday about “constructive” discussions, the rhetoric grew more heated over the weekend.
Trump on Saturday took to Twitter to taunt the Chinese. “I think that China felt they were being beaten so badly in the recent negotiation that they may as well wait around for the next election, 2020, to see if they could get lucky & have a Democrat win,’’ the president said.