China and US reached agreement (for now) on Trades!

By | May 21, 2018

In our previous blog posts (here and here), we argued that there is only upside for US to bring up the Trade imbalance issues with China and forced China to the negotiation table. Despite the wide spread fear of a “Trade War” in financial markets, we maintained the position that there will be no “Trade War” because Chinese economy is relying too much on exports to US. A “Trade War” with US is analogous to biting the hands that feed you.

President Trump deserves all the credit for any reduction of trade deficit against China and all other countries that are running a trade surplus against US. He tactically started the challenge through high profile announcements in tweets and other media space on headline import duty, however, the determining factor, in our opinion, was the actions against ZTE. The action against ZTE is like a strongest punch that sent ZTE to the ground immediately and artfully, he did not choose Huawei or any other highest profile Chinese Companies (otherwise the punch might have been too strong to reconcile the differences later). Fate of ZTE was only a showcase by US to the Chinese Government that if US chooses to do so, lots of other Chinese companies may suffer similar fate of ZTE, and that will cause a major issue in China’s economy.

Headline Import Duty fight + punch to ZTE = forcing China to sit back at the negotiation table and work out a solution on trade issues. Evidently President Trump’s tweet on the fact that he is working with President Xi to save ZTE demonstrated this strategy clearly.

The Art of the Deal

Even the most “Trump-hating” left media needs to recognize the skills and efforts from Trump administration in various issues so far: Tax Reform, Trade Dispute, North Korea situations etc. The unorthodox style of this Administration consumed its domestic oppositions with tons of tabloid stories and “chaotic” divergence. At the same time, their energy and resources were tied to small things like Russian Interference, Administration personnel departures/nominations, Stormy Daniels, even mentioning of Melania Trump in his Mother’s Day speech. Little did the Left notice of the major campaign-worthy achievements that Trump has bagged and it will be too late when they realize that at the eve of Republican’s mid-term election celebration or Trump’s re-election victory night.

Now who is lack of wisdom?

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