Speed Reads

Trade Wars

Trump appears to think China is on the verge of cracking on trade. He's probably wrong.

On Thursday, The Wall Street Journal reported that Treasury Secretary Steven Mnuchin had asked Chinese officials for a new round of trade talks in September, giving Beijing a chance to avert new tariffs on $200 billion in Chinese exports. Some Trump administration officials believe the U.S. has China over a barrel, the Journal says, but there's also "a steady rise in political pressure on President Trump to ease up on trade fights" from farm and business groups, and "Chinese officials said they have grown wary of the Trump administration's unpredictable decision-making process and may be hesitant to accept without a clear sign U.S. negotiators have authority to speak for the president."

Trump validated those concerns with a tweet on Thursday: "The Wall Street Journal has it wrong, we are under no pressure to make a deal with China, they are under pressure to make a deal with us. Our markets are surging, theirs are collapsing."

"The president's expectation that financial hardship will prompt Chinese President Xi Jinping to cave in a fresh round of diplomatic talks is misplaced," The Washington Post reports, citing analysts. Chinese markets have fallen significantly this year while U.S. markets are rising, "but unlike in the United States, the ups and downs of the Chinese stock market affect relatively few people, meaning sell-offs are unlikely to translate into pressure on Chinese leaders," the Post notes. And China's slowing economy — its economy is growing at about 6.5 percent — is due to a lot of factors that have nothing to do with the U.S. trade war.

"There's a lot of overly wishful thinking on the American side," Jeff Moon, a former U.S. trade negotiator, tells the Post. "Every economy has problems. We have ­trillion-dollar deficits. That doesn't mean either economy is in fundamental danger. It's a massive miscalculation." You can read more about the complexities of the trade war at The Washington Post.