Watch Live (China says briefing delayed a half an hour, to 10am ET… which means it will begin just as the House Judiciary Committee is being gaveled in to vote on articles of impeachment):
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The market appears convinced this is everything we’ve been hoping for but the radio-silence from China (along with leaked rumors of concerns about the terms – which “will never be made public”) has some fearing this is a Trump adminiustration play to maneuver the narrative, forcing China into a corner as the ‘bad guy’ if no deal is actually agreed by Sunday night.
Chinese officials will give us their side of the story, Reuters is saying that will happen at 10:30 p.m. local time, 9:30 a.m. NY time
The Beijing officials briefing on trade @ 9:30am ET:
Ning Jizhe, Vice chair of Nat’l Development & Reform Commission
Liao Min, Vice Min of Finance
Zheng Zeguang, Vice Min of Foreign Affairs
Han Jun, Vice Min of Ag and Rural Affairs
Wang Shouwen, Vice Min of Commerce
As we tweeted, algos have a few minutes to learn Chinese…
CHINA’S NING JIZHE, LIAO MIN, WANG SHOUWEN TO SPEAK
Algos have 50 minutes to learn Chinese
— zerohedge (@zerohedge) December 13, 2019
Putting this all together, President Trump’s self-proclaimed phase one trade deal is likely a proposal at the moment for the Chinese. And even if the Chinese agree to it, it may never become public.
How to make sense of all of this? Recall that earlier this week, Peter Navarro was complaining that China had taken control over the narrative. So by laying out the terms of the “concluded” deal, it is possible the Trump administration is seeking to force the Chinese into an agreement so Trump can get a political win, because that’s really what a phase one deal is about.
Should the Chinese reject the terms of the proposal, such as the massive $50 billion in agriculture purchases, Trump can now effectively scapegoat China for blowing up the trade deal, just as he did back in May, which brings us back to the Trade war cycle…
As Rabobank warned earlier,
“We have been promised this gift many times, and each time it has turned out to be an empty box. We need to see China publicly agree too. We need to see the text of what it is agreeing to. And we need to see it signed, sealed, and delivered. However, the optics certainly appear to be that we are closer to a deal than we have been for some time…unless this is Trump conducting public negotiations to then frame China as the bad guy for walking away from his “great deal”, which one cannot rule out. “
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Update (9:25amET): It’s hardly a surprise, but Axios’s Jonathan Swan reports that President Trump specifically objects to the detail in the WSJ story claiming that the US would rollback existing tariffs by half.
Senior official told me he’s objecting mostly to the half reduction of tariffs detail https://t.co/fD1XOw4Dfm
— Jonathan Swan (@jonathanvswan) December 13, 2019
Allowing such generous rollbacks would sacrifice a lot of leverage for the next round of talks…and neither Trump nor President Xi want to look weak.
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President Trump just poured cold water on the brightest aspect of his shiny new (reported) trade deal by dismissing claims that prior tariffs will be rolled-back as reported by WSJ yesterday…
The Wall Street Journal story on the China Deal is completely wrong, especially their statement on Tariffs. Fake News. They should find a better leaker!
— Donald J. Trump (@realDonaldTrump) December 13, 2019
And the result…
Yuan has puked…
And stocks are fading fast…