{"id":1160132,"date":"2020-01-15T16:19:17","date_gmt":"2020-01-15T22:19:17","guid":{"rendered":"https:\/\/dailyreckoning.com\/?p=108849"},"modified":"2020-01-15T16:19:17","modified_gmt":"2020-01-15T22:19:17","slug":"now-what","status":"publish","type":"post","link":"https:\/\/juniorminingnews.com\/?p=1160132","title":{"rendered":"Now What?"},"content":{"rendered":"

This post Now What?<\/a> appeared first on Daily Reckoning<\/a>.<\/p>\n

Stocks were up and away this morning, aloft on happy wings. And as stocks went up… records came down.<\/p>\n

Both the Dow Jones and S&P established fresh highs today.<\/p>\n

Today is \u2014 after all \u2014 when the United States and China stowed their differences\u2026 and came formally to terms.<\/p>\n

President Trump and Chinese Vice Premier Liu He signed their names to a \u201cphase one\u201d trade accord late this morning.<\/p>\n

What precisely did they pledge? AP draws the overall sketch:<\/p>\n

\n

Under the Phase 1 agreement, which the two sides reached in mid-December, the administration dropped plans to impose tariffs on an additional $160 billion in Chinese imports. And it halved, to 7.5%, existing tariffs on $110 billion of goods from China.<\/i><\/p>\n

For its part, Beijing agreed to significantly increase its purchases of U.S. products. According to the Trump administration, China is to buy $40 billion a year in U.S. farm products \u2014 an ambitious goal for a country that has never imported more than $26 billion a year in U.S. agricultural products.<\/i><\/p>\n<\/blockquote>\n

Once the handshakes were over, the president seized a microphone and gushed:<\/p>\n

\n

Today we take a momentous step, one that has never been taken before with China, toward a future of fair and reciprocal trade with China. Together we are righting the wrongs of the past.<\/i><\/p>\n<\/blockquote>\n

And so there is more joy in heaven this day. But will there be more joy on Earth the next?<\/p>\n

We are not half so convinced. The wrongs of the past \u2014 if they be wrongs at all \u2014 may well remain wrong.<\/p>\n

The warring parties have signed a truce, it is true. But truce is not peace.<\/p>\n

Truce may be no more than a mere respite from arms, a temporary cessation of fire, a brief clearing of battlefield smoke.<\/p>\n

Consider the terms of this truce…<\/p>\n

It cuts in half tariffs on certain Chinese wares from 15% to 7.5%. Yet tariffs on some $360 billion of Chinese exports stand in place.<\/p>\n

Perhaps two-thirds of Chinese goods remain under penalty. As do more than half of all United States shipments to China.<\/p>\n

Today\u2019s signing scarcely budges them.<\/p>\n

Meantime, this phase one armistice leaves unaddressed China\u2019s war aims, its peace terms, its strategic objectives.<\/p>\n

Continues the AP wire:<\/p>\n

\n

The so-called Phase 1 pact does little to force China to make the major economic reforms \u2014 such as reducing unfair subsidies for its own companies \u2014 that the Trump administration sought when it started the trade war by imposing tariffs on Chinese imports in July 2018\u2026<\/i><\/p>\n

Most analysts say any meaningful resolution of the key U.S. allegation \u2014 that Beijing uses predatory tactics in its drive to supplant America\u2019s technological supremacy \u2014 could require years of contentious talks. And skeptics say a satisfactory resolution may be next to impossible given China\u2019s ambitions to become the global leader in such advanced technologies as driverless cars and artificial intelligence.<\/i><\/p>\n<\/blockquote>\n

Adds The New York Times:<\/i><\/p>\n

\n

The deal also does not address cybersecurity or China\u2019s tight controls over how companies handle data and cloud computing. China rejected American demands to include promises to refrain from hacking American firms in the text, insisting it was not a trade issue.<\/i><\/p>\n<\/blockquote>\n

Affirms Eswar Prasad, who formerly directed the International Monetary Fund\u2019s China desk:<\/p>\n

\u201c[The deal] hardly addresses in any substantive way the fundamental sources of trade and economic tensions between the two sides, which will continue to fester.\u201d<\/p>\n

And so the generals remain huddled over their charts… the cannons are still loaded\u2026 and the troops are ready to answer the bugle.<\/p>\n

They only await orders from the commander in chief.<\/p>\n

Ultimate peace \u2014 lasting peace \u2014 will therefore require a \u201cphase two\u201d treaty…<\/p>\n

The president has vowed to tackle China\u2019s multiple trade atrocities in phase two of negotiations.<\/p>\n

That is why he has held most existing tariffs in place. These represent the stick end of the \u201ccarrot and stick\u201d polarity.<\/p>\n

He will wield them as clubs, forcing Chinese concessions in this crucial second phase<\/span>.<\/p>\n

But phase two must wait. The president has suggested \u2014 strongly \u2014 that negotiations may not proceed until this year\u2019s election is decided.<\/p>\n

Assume they do proceed…<\/p>\n

Will Mr. Trump club China into submission? Will China throw down its arms… and come marching into camp?<\/p>\n

Not if it means losing \u201cface,\u201d argues Jim Rickards:<\/p>\n

\n

Culturally, saving face may be more important to the Chinese. The Chinese are all about saving face and gaining face. That means they can walk away from a trade deal even if it damages them economically.<\/i><\/p>\n<\/blockquote>\n

Meantime, the truce, the uneasy truce, enters force.<\/p>\n

The Lord only knows if it holds\u2026<\/p>\n

Regards,<\/p>\n

Brian Maher
\nManaging editor, The Daily Reckoning<\/i><\/p>\n

The post Now What?<\/a> appeared first on Daily Reckoning<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

This post Now What?<\/a> appeared first on Daily Reckoning<\/a>.<\/p>\n

At long last, the U.S.-China “phase one” trade deal is signed…<\/p>\n

The post Now What?<\/a> appeared first on Daily Reckoning<\/a>.<\/p>\n","protected":false},"author":16,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"footnotes":""},"categories":[3724,366,463,3731,428],"tags":[30,281],"_links":{"self":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1160132"}],"collection":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/users\/16"}],"replies":[{"embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1160132"}],"version-history":[{"count":1,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1160132\/revisions"}],"predecessor-version":[{"id":1160134,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1160132\/revisions\/1160134"}],"wp:attachment":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1160132"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1160132"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1160132"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}