The stock markets fell sharply by over 2.3% today as investors realized that President Trump’s supposed end to his trade war with China existed primarily in own mind.
The markets had been up sharply after Trump announced that his G-20 dinner meeting with China’s President Xi Jinping had resulted in a deal to eliminate tariffs on auto exports to China.
China has agreed to reduce and remove tariffs on cars coming into China from the U.S. Currently the tariff is 40%.
— Donald J. Trump (@realDonaldTrump) December 3, 2018
Any investor foolish enough to take the president at his word and place their monetary bets accordingly may be regretting that decision now, especially after reading the note from investment bankers at JP Morgan that CNBC‘s Carl Quintanilla posted to Twitter early this morning.
"It doesn’t seem like anything was actually agreed to at the dinner and White House officials are contorting themselves into pretzels to reconcile Trump’s tweets (which seem if not completely fabricated then grossly exaggerated) with reality." – JPM trading note
— Carl Quintanilla (@carlquintanilla) December 4, 2018
The fact that China has not confirmed any of the details of President Trump’s claims about the agreement reached at the G-20 dinner makes the president’s self-congratulatory tweets about his deal-making skills even less believable than they would normally be.
While Trump and President Xi do appear to have reached a deal to not further escalate for now the tariffs that Trump had unilaterally imposed, the fact that Trump subsequently appointed a China trade hawk, Bob Lighthizer, to lead the negotiations with the Chinese trade team does not bode well for a quick and easy deal during the 90 day period being allocated to complete a new agreement.
The markets today are making their own decision about Trump’s credibility and the prospects of his administration successfully reaching an equitable trade deal with the Chinese, and it’s not a positive one.
With a major investment bank now recognizing that nothing that Trump says can be trusted at face value, the financial industry is now recognizing the dangers of having such a “stable genius” in the presidency.
Hopefully, once Wall Street realizes that Trump is helping them lose money rather than raking it in, the political pressure to remove Trump from office will build, and we can exit the national nightmare we now find ourselves in.
Follow Vinnie Longobardo on Twitter.
Original reporting by Brad Reed @ RawStory
