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Market Commentary

All Eyes on Trade Deals

By Charles Payne, CEO & Principal Analyst
5/18/2018 12:41 PM
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It’s all about trade this morning.

China and NAFTA are coming down to the wire and while there are deadlines involved with each I suspect resolution is being forced by a genuine effort to move forward.

US Trade (Goods)

Exports

Imports

Total Trade

% Total Trade

Total Trade

402.4

599.3

1,001.6

100.0%

China

32.0

123.1

155.1

15.5%

Canada

73.2

77.0

150.2

15.0%

Mexico

63.9

82.2

146.1

14.6%

Japan

17.5

35.0

52.5

5.2%

Germany

14.8

30.7

45.4

4.5%

United Kingdom

17.2

14.7

31.9

3.2%

Korea, South

13.1

16.8

29.9

3.0%

France

8.1

12.1

20.2

2.0%

India

7.4

12.7

20.1

2.0%

Italy

5.4

12.7

18.0

1.8%

This morning the media seemed fixated on comments that President Trump expressed doubts on a China trade deal.  I think most of the comments from President Trump and the Chinese government are part of public posturing and position playing to their own constituents. 

Meanwhile China backed down from its tariffs on Sorghum and there are reports the country is ready to make a deal that reduces our trade deficit by $200.0 billion.  While there has been some pushback I am convinced such an offer has been extended.

The reality is both countries want to make a deal and the fact is China is more eager to do something quickly on opening its markets and lowering tariffs as long as we don't curb their China 2025 ambitions that center around technology dominance. 

This is where the internal fighting comes from.  Peter Navarro, who has studied China and lived in the Far East, is playing a much longer game than winning the midterm elections.  He wants the deal to focus on three things:

Right now I believe a deal is going to happen I'm just not sure about its final composition other than it will probably be overwhelmingly tilted toward trade than technology. 


Comments
As long as China's leaders gets to look good in the mind of the average (man /woman) citizen all will be well ----no worry with the POTUS or me. The (DEAL) will work in our favor---- It may take time but I'm all in with D.J.Trump-------- why? I love my Grandchildren and this Country!

John on 5/19/2018 12:48:55 AM
 

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