Has Trump Softened His Stance after ‘Tariff Man’ Debacle?




As noted in the previous article, US President Donald Trump has said that he would consider relaxing the March 2 deadline for increasing tariffs on Chinese goods (BIDU) (TCEHY). Trump has taken a hard stance on trade relations with China (FXI) (BABA).

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UNGA speech

Last year, at the United Nations General Assembly, President Trump lashed out against China saying, “China’s market distortions and the way they deal cannot be tolerated.” Trump went ahead with tariffs on China despite lobbying by companies like Facebook (FB), Amazon (AMZN), Alphabet (GOOG), and Walmart (WMT). Apple (AAPL) and NVIDIA (NVDA) are among the companies that have blamed China’s slowdown for lower earnings.

Tariff Man tweet

In December, President Trump tweeted that he is a “Tariff Man.” US equity markets fell sharply after the tweet. The tweet came a couple of days after Trump met Chinese President Xi Jinping at the sidelines of the G20 summit in Argentina and the two leaders decided on a 90-day truce.

However, after the sell-off after the “Tariff Man” tweet, Trump has somewhat softened his stance on China talks. Reportedly, Trump sees market performance as a reflection of his performance. In December, amid the broader market sell-off, Treasury Secretary Steven Mnuchin held a call with the President’s Working Group on Financial Markets, known as the “Plunge Protection Team.” Back then, Trump had also called the sell-off “a great opportunity to buy.”

Meanwhile, while Goldman Sachs (GS) sees a flat market (QQQ) for the rest of 2019, some fund managers are still bullish. We’ll discuss this more in the next article.


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