President Trump won't be signing a trade deal with China in the week ahead. That's expected to happen on Jan. 15. The trick this week is maintaining that date, and selling the first phase of a deal to investors.
The U.S. and China have been here before _ a few times.
In September 2018, China canceled trade talks after the U.S. instituted tariffs on $200 billion worth of Chinese imports. A year ago, the U.S. canceled lower-level trade talks over disagreements regarding protections of American intellectual property in China _ a key goal for U.S. negotiators. Then, on a Friday morning in May, U.S. Treasury Secretary Steven Mnuchin called negotiations with the Chinese constructive. That same afternoon, with the Chinese vice premiere in Washington for negotiations, Mnuchin's boss, President Trump, tweeted a 25% tax on $200 billion worth of Chinese imports would go into effect. He then ordered his trade representative to begin another tariff hike. The talks were over with no deal.
This on-again, off-again negotiating is the president's style. Investors have become inured to it. The stakes for both sides in this almost two-year trade war are enormous, and the objectives are ambitious.
Remember that the president launched this trade war to pressure China into providing protections for American know-how in China and reducing Chinese subsidies to its own companies. China fought back, asserting that the U.S. wants to impede its growing economic power.
Now there's a date for a White House ceremony. No doubt President Trump will revel in taking his black Sharpie to a partial trade pact with the Chinese. This week, investors may not want to bank on the deal until the ink is dry.
