By Denny Gulino
THE WHITE HOUSE (MaceNews) – Yes, there were calls with China officials the White House insists, as the clock ticks toward the Sunday imposition of the first phase of higher tariffs on many China products.
China officials on Wednesday still withheld confirmation of any talks, either telephone calls in the past or talks to come in September, let alone “high level” communication President Trump said happened. .
The formal notice of Sunday’s higher U.S. tariffs and the Oct. 1 tariffs to come hit the government’s notice board, the Federal Register, Wednesday certifying the 15% tariff on part of a long list of made-in-China items will start to be collected at the border. The third phase, the Dec. 15 30% tariffs on the remainder of imports from China, have yet to be so certified.
The additional five percentage points President Trump tacked on last week to the Sunday levies, a retaliation he said was triggered by China’s retaliation, has not yet drawn any further China retaliation. As reported earlier, White House officials don’t expect any.
Meanwhile another group of retailers signed a petition to stop the tariffs. More than 200 U.S. footwear companies Wednesday said they will have to raise prices for consumers if the tariffs aren’t canceled.
Stocks were up 0.4% (Nasdaq) to 0.9% (DJIA) through the afternoon in trading that was more than 10% lighter than typical as equities traders seemed to cross their fingers and hope Trump is right when he tweeted in the late morning, “We are doing very well with China..” In the credit markets, the 2-year to 10-year curve inversion continued unabated.
That tweet went further, scorning all his White House predecessors for not taking on China. “So interesting to read and see all of the free and interesting advice I am getting on China,” Trump wrote, “from people who have tried to handle it before and failed miserably – In fact, they got taken to the cleaners.”
Trump has claimed from the beginning of his campaign on through the weekend’s G7 news conferences that China has taken hundreds of billions of dollars out of the U.S. over the years, never explaining in what sense the U.S. was disadvantaged by buying so much at bargain prices other than generating a trade deficit.
Virtually every mainstream economist has said trade deficits in total are created by a country that spends more than it earns through domestic production and that while deficits can be redistributed by tariffs and non-tariff barriers, the total remains pretty much the same as long as the country is forced to import capital..
There were other tweets during the day, with more than one lamenting how Fox News is spending time interviewing Democrats. “The New Fox News is letting millions of GREAT people down! We have to start looking for a new News Outlet,” he wrote.
Puerto Rico came in for the “Baltimore” treatment in another tweet as the island awaits the arrival of Hurricane Dorian. “Puerto Rico is one of the most corrupt places on earth,” he wrote. “Their political system is broken and their politicians are either Incompetent or Corrupt.”
The Federal Reserve got another swipe, as not “mentally”able to “ keep up with the competition – other countries. At the G-7 in France, all of the other Leaders were giddy about how low their Interest Costs have gone.” He added, “No Clue” at the Fed.
Despite expectations to the contrary, Trump has not yet used the controversial Op-Ed from former New York Fed President Bill Dudley as an opportunity to claim the central bank is politically aligned against him. Dudley provoked widespread criticism by suggesting the Fed should refrain from rate cuts if they are caused by bad trade policy since that would increase the chance Trump will be re-elected.
Dudley was so far off the apolitical reservation that a Fed spokesperson was finally prompted to say what Fed chairs have always said, that “The Federal Reserve’s policy decisions are guided solely by its congressional mandate to maintain price stability and maximum employment. Political considerations play absolutely no role.”
There was also a tweet praising Boris Johnson after he tentatively obtained the Queen’s permission to suspend Parliament until the middle of October, making it more difficult for the opposition to garner support against any no-deal Brexit at the end of that month. The move brought into focus the term “prorogation,” which is often invoked on a routine basis once a year, but not in the context of such a huge issue as leaving the EU.
The UK Supreme Court could still nullify the prorogation of Parliament should it agree with the opposition that Brexit was the real motive rather than what Johnson insists was only a pause to allow the preparation of several reform policies unrelated to Brexit.
In the background Wednesday, the U.S. Navy sent a destroyer to affirm freedom of navigation by sailing past China’s new islands in the South China Sea. Reuters reported China has denied a request for a U.S. Navy warship to visit the Chinese port city of Qingdao.