Breaking: Trump retaliates, hikes tariffs on China

At the rate we’re going, we may need Kim Jong Un to mediate relations between the U.S. and China

The fact that he waited until the markets closed for the day before announcing his response to China’s new tariffs was a sign that, uh, it wasn’t going to be great.

Confirmed: It’s not great. A recession it is, then.

Ten days ago he announced that the next round of tariffs on China would be delayed from September 1 to December 15, a sop to retailers who were panicked that escalating the trade war before Christmas shopping season would wreck sales. Are we now back on the September 1 timetable?

The fact that the G-7 is happening this weekend raises the possibility that maybe face-to-face talks with China will result in some reprieve before Monday morning. But that’s not how you’d bet: These summits with European allies have become more adversarial, not less, over the course of Trump’s presidency, to the point that he’s reportedly told aides over the past few weeks that he’d prefer not to go. He’s more likely to pitch other G-7 members on joining with him in a united western front to teach China a lesson on unfair trade practices. Given how tense European relations are with the White House, how’s that likely to go? What would their price be for an alliance of that sort, given that they’re now going to panic that a prolonged U.S./China trade war will destabilize their own economies?

Stand by for updates. What a nightmare.

Update: Prayers up for America’s businessmen and women, who somehow need to plan in an economic environment where tariffs and their timetables can change at a moment’s notice. Will Chinese imports still be facing a 30 percent tax come Monday morning? Tune in to Twitter in 60 or so hours from now and find out.

Business lobbyists scrambled throughout the day on Friday to get answers about the White House’s plans for retaliation, but many administration advisers were either in transit on their way out of the country to the G-7 meeting or already in France, according to two senior industry officials who spoke on the condition of anonymity to discuss the internal complications.

Business interests have been cautious not to denigrate Trump’s trade moves with China too strongly, eager to support the president’s goals of fairer trade practices and maintain a bridge to the administration.

But the president’s stunning new directive for U.S. companies to sever ties to China likely represents a new risk that could lead to more dire warnings and intense criticisms of the administration, these officials said, particularly for large U.S. multinational corporations who have for years been planning to try to benefit from the growing Chinese consumer market.

“Senior Republicans on Capitol Hill were in the dark as of Friday afternoon about the administration’s plans,” notes WaPo.

Update: Everything’s cool:

On Friday afternoon, the president hastily assembled his top trade advisers at the White House — including Treasury Secretary Steven Mnuchin, who joined by telephone — to settle on a response. The president was not aware that China’s retaliation was coming and was angry about being blindsided, according to people familiar with the matter.

Mr. Trump’s tweets on Friday caught most of his advisers and staff by surprise, and prompted alarm. Some of Mr. Trump’s advisers privately expressed concern that the ferocity of Mr. Trump’s response could derail the negotiations permanently and could unsettle supporters during an election year.

How did he not expect China to retaliate when the escalation in the trade war has placed Chinese prestige on the line? If you’re Merkel or Macron, why would you bet on a trade alliance with a power as unpredictable as the U.S. is right now?

Update: Dan is correct here. For both sides, it seems the only way to save face at this point is to ride this out for 15 more months and see what happens in the election. Lotta economic pain to come.

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