Starting Monday with a bang, the markets are recovering “bigly,” as President Trump might say. Late last week, the Trump administration imposed a series of China tariffs after accusing the world’s second-biggest economy of stealing sensitive technologies. As a result, Wall Street tripped up badly due to fears of an impending trade war.
At first, the concerns were more than justified. The Trump mandate calls for, bluntly, an “America First” foreign policy. This was a President who not only talked tough, but appeared eager to demonstrate it. The White House officially declared their China tariffs that had an economic impact of $60 billion. Naturally, China responded with their own retaliatory tariffs.
However, the trade wars was disjointed and imbalanced from the beginning. China only responded with $3 billion retaliatory tariffs; thus, we had a huge differential of a factor of 20 in our favor. This signaled that China was unwilling to escalate the trade wars, likely because they would be hurt far more.
Our administration saw blood in the water, and simply attacked. It’s a page straight out of the Trump mandate, sending a powerful message that the U.S. will no longer deploy a weak and effeminate foreign policy.
Shockingly, it appears that China is acquiescing to Trump’s demands; hence, the robust run-up in the markets. Investor’s Business Daily wrote:
“Meanwhile, China continued to send all the right signals. Premier Li Keqiang told a conference of global CEOs that China would treat foreign and domestic firms equally, would not force foreign firms to transfer technology, and would strengthen intellectual-property rights, CNBC reported.”
Furthermore, President Trump might actually be making significant progress with the Korean peninsula situation. Not long ago, the mainstream media pushed the nuclear war fear rhetoric, presenting an image that the Trump mandate was woefully out of touch with today’s foreign policy standards. Yet just a few days ago, Newsweek reported evidence that North Korea is willing to discuss denuclearization and is actually serious about it.
Time will tell. Nevertheless, the last few weeks represent substantive victories for the Trump mandate. The President repeatedly called for a new foreign policy that leads by strength, and this is exactly what we’re witnessing.
The prior Obama administration focused on bowing down (sometimes literally) to foreign demands. With Trump, we have an administration that calls out BS. Rather than an ongoing series of trade wars, we may have capitulation from our rivals. And demonstrating superior strength seems to have quieted the appetite of belligerent nations.
Of course, this doesn’t fit the mainstream narrative, so we can likely expect further news stories (such as the recent Facebook privacy scandal) to be framed against President Trump.