Trump Says “Trade War Could be Over Quickly” – Why Should Anyone Believe Him?
The indexes got a small reprieve on Friday after President Donald Trump said the ongoing trade war could be over quickly.
“The growing worries around a US/China elongated trade battle and its implications on the tech space are heavily weighing on the minds of both investors and the companies themselves caught in the cross hairs,” Dan Ives, analyst at Wedbush Securities, wrote in a note to clients. “The ‘poster child’ for the US/China trade wars continue to be Apple with the stock under heavy pressure as many competitors are yelling fire in a crowded theater around the potential China impact to Cupertino if this situation worsens.
The only way the trade war will be over quickly is if Trump caves in and reduces demands on China.
Let’s chalk up another lie.
Apple Faces Another Blow
Bloomberg reports Apple’s China Business Faces Another Blow From Trump’s Huawei Ban.
The U.S. crackdown on Huawei Technologies Co. could make Apple Inc.’s already troubled business in China even more difficult, hobbling iPhone sales in the world’s biggest smartphone market and disrupting the company’s supply chain, according to analysts.
Last week, U.S. President Donald Trump effectively banned U.S. companies from working with Huawei. That’s sparked concern on Wall Street about potential retaliation by China, where iPhones are assembled and where Apple gets about a fifth of its revenue.
“There is a potential for a boycott” of Apple products, said Shannon Cross of Cross Research. “There could be a movement in China to support national champions.”
Apple could lose nearly a third of its profit if China retaliated by banning its products, Goldman Sachs analysts estimated this week.
Trump’s Trade Hypocrisy
Security Threat and No Threat
Amusingly, Huawei is and isn’t a Security Threat.
Trump banned Huawei on grounds it’s a major security threat.
Yet, Trump announced that the company could be part of a trade agreement that once again may be just around the corner.
Since when does the US bargain away genuine security threats?
Trump handed the Democrats huge campaign issues on a silver platter.
Yet, all the Democrats want to talk about is impeachment and absurd Russiagate claims now thoroughly discredited.
Barring recession, Trump has a very good chance of returning to the White House.
Unfortunately, for Republicans, (fortunately, for Democrats) a recession is very likely.
Drown Your Sorrows
The election losers will drown their sorrows. But that will be more expensive, thanks to Trump: The Beer Industry Blames Trump’s Tariffs for Loss of 40K Jobs.
A report by two trade groups showed U.S. beer-industry jobs dropped 40,000 since 2016 as metal tariffs boosted aluminum-can costs, leading to a drop in investment.
“Aluminum tariffs are increasing brewers’ costs and are an anchor on a vibrant industry,” Jim McGreevy, the chief executive officer of the Beer Institute in Washington, said in an emailed statement. “Each brewer is deciding for themselves how to absorb that expense, whether it’s raising prices, laying off workers or delaying innovation and expansion.”
The shipping and logistics charge for delivering aluminum to the U.S. Midwest, known as the “premium,” more than doubled as Trump slapped a 10% tariff on imports of the metal. Molson Coors Brewing Co. estimated last year that the levies would create a $40 million hit to its bottom line.
Tariffs are likely not the primary reason people are drinking less beer. But Tariffs are to blame for shrinking profits.
Soon and Very Soon Tribute
I am sure there will be a trade deal soon and very by the self-proclaimed deal-making king himself.
In fact, I can guarantee it.
Of course, the king gets to set the meaning of soon.
Mike “Mish” Shedlock