President Donald Trump has never exactly distinguished himself for sticking to reality. In the wake of a meeting with Chinese President Xi Jinping at the G20 summit of world leaders in Argentina, he’s claimed that the ongoing trade war between their two countries has essentially come to a halt — but J.P. Morgan begs to differ. In a “trading note” they issued this week, they insisted that the president’s laudatory tweets seem mostly if not completely detached from reality. Yet again, he’s contorting reality where there’s little to nothing to hype.
As they phrased their take:
‘It doesn’t seem like anything was actually agreed to at the dinner and White House officials are contorting themselves into pretzels to reconcile Trump’s tweets (which seem if not completely fabricated then grossly exaggerated) with reality.’
They noted as much as part of comment on the general state of global financial markets in the wake of the cease fire Trump and Xi agreed to. Administration officials have resorted to vague explanations for discrepancies in accounts of that deal like that the Chinese agreed to purchase an unspecified amount of American goods — which could mean anything, really.
The only apparent core part of their agreement seems to be a pause on tariff increases from both sides for 90 days. Although that’s a step in the right direction, that’s not even a pledge to halt tariffs entirely — and in fact, this Tuesday morning, President Trump pledged to move full steam ahead with more tariffs if no final deal is reached within the roughly three month time frame.
As he put it:
‘I am a Tariff Man. When people or countries come in to raid the great wealth of our Nation, I want them to pay for the privilege of doing so. It will always be the best way to max out our economic power.’
Back on earth in reality, tariffs on imported goods translate time and time again into higher prices for American consumers — if the products even make it through production in the first place. What if an American company can’t absorb the added costs associated with their production process thanks to the tariffs — then what, Trump? What fantasy world does the president live in where the best way to max out economic power is through punitive taxes and not, say, supporting American small businesses?
It’s not as though the tax plan he signed into law last year and touted as a boon for the middle class really is what he claims. The main attraction was a massive tax break for high income earners and corporations that sent collected taxes from those segments plummeting to their lowest level in decades while the federal deficit continued to balloon out of control.
In other words, the hyperbole he’s offered in the wake of his talks with Xi isn’t unique — and it has consequences.
He’s threatened drastic steps like moving forward with a North American trade agreement without Canada in the past, and what he might actually undertake this time around with China outside of hyperbole and threats remains an open question.
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