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Trump will make a deal with china as push comes to shove
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Loading...US President Donald Trump will make a deal with China for two reasons:
1. The trade war is beginning to hurt China and the US
2. Trump's barking is much worse than being bitten (in a good way)
Let's discuss them one by one:
1. The trade war is beginning to hurt China and the US
The latest trend in trade disputes between the two countries is starting to move towards de-escalation. The reason for this is that the conflict does too much damage to both. China's industrial production fell to 4.4% in August (from 5.2% expected). This carries the risk that China will miss over 6% of its GDP growth.
The same applies to US manufacturing, ISM Manufacturing reported 49.1 over the same period, at 51.2. This has led Trump to look for alternatives, with even his trade advisers trying to make a premature deal with China (yes, that rumor turned out to be true, even though the President denied it).
2. Trump's barking is much worse than being bitten (in a good way)
We've seen this countless times from Trump. He has postponed tariffs because of national holidays, has been reluctant to strike Iran earlier this year in the case of civilian casualties and has been retreating from hostilities against Iran recently. Trump reminds one of those guys whose conversations are fierce, but not really bad. He has an eye for the little man. So, the deal will be concluded, because when the tensions rise, he won't want to see too much pain in either the US or China. This does not mean that there will be no more threats and a general "fire and fury" phase in the negotiations (remember the NAFTA / USMCA's conclusion), but a deal will come sooner or later. The only danger, of course, is that the conflict will escalate too much too quickly and events go out of control to the extent that they cannot handle a tweet. This is the danger of starting so many fires .. sooner or later it will catch fire so that you cannot extinguish it.
Trader Aleksandar Kumanov Read more:
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