#1 – TRUMP: I’M READY TO GO TO $500 BILLION IN TARIFFS ON CHINA
• On Friday, CNBC aired an interview with President Trump and Squawk Box anchor Joe Kernen that further shook up the trade world. The big, market-moving news out of the interview was Trump’s admission, which most suspected, that the end goal is to place tariffs on all Chinese imports entering the U.S. – more from POLITICO here:
Two key takeaways from interview:
• Because of the state of the economy, Trump believes he has enough breathing room to create havoc on trade without it impacting voters.
• On nearly every other issue, Trump makes a political calculus based on retaining his roughly 40% base intact. On trade, Trump talks like a true believer shaped by years of ideological rigidity.
• What it means: The popular theory is that the trade war will go on as long as Trump thinks it is not politically problematic. While that could still very well be true, this interview raises the possibility that on trade, Trump is committed enough to push forward even if the politics become rough.
Key exchange:
TRUMP: You know the expression, we’re playing with the bank’s money, right?
KERNEN: Would you ever get to $500?
TRUMP: I’m ready to go to $500.
KERNEN: With the midterms on the horizon? What if the stock market were to go down?
TRUMP: Well, if it does, it does. I’m not doing this for politics, I’m doing this to do the right thing for our country.
#2 – NAVARRO CALLS TARIFF IMPACTS A ROUNDING ERROR; CONGRESS AND FARMERS REACT
• White House trade hawk Peter Navarro gave members of Congress, farmers, and business groups much needed ammunition to fight back against tariffs last Thursday when he called the impacts of tariffs a “rounding error” in an interview on CNBC (see above).
• Navarro’s comments – He went on to say that the tariffs have been “much less disruptive than these headlines suggest” – which immediately drew a chorus of boos that haven’t yet stopped.
• The Wall Street Journal even jumped in on the action, with their normally Trump-friendly editorial board calling Navarro “out of touch.” – https://www.wsj.com/articles/the-trade-casualties-…
#3 – TARIFF PAIN STORIES LEAD MAJOR PUBLICATIONS
• The headlines that Navarro was referring to kept rolling in last week in major papers. Some prominent examples that lawmakers and the business community will be holding over the heads of the Administration going forward:
#4 – NAFTA NEGOTIATORS TO STEP UP TALKS WITH Ambitious AUGUST 25TH GOAL
• Mexico’s chief trade negotiator, Ildefonso Guajardo last week said in a radio interview that a deal on NAFTA was feasible in the next 45 days, creating some waves of interest in the dormant talks. The comments come before a meeting between Guajardo and U.S. Trade Representative Robert Lighthizer on Thursday of this week. The Wall Street Journal – which covered Guajardo’s attention-grabbing comments – noted that the White House continues to talk about cutting separate NAFTA deals with Mexico and Canada. More from the WSJ here: https://www.wsj.com/articles/mexico-says-u-s-mexic…
#5 – 232 AUTO TARIFF HEARINGS CALLED “SHOW TRIAL”
• More than 40 auto industry representatives expressed their universal opposition to the Administrations auto 232 tariffs at the Department of Commerce’s daylong hearing on whether to impose 232 (national security threat) tariffs on auto imports. Following the hearing POLITICO reported that a senior Commerce official indicated that a decision could come in “weeks.”
• Shortly before the hearing Bloomberg reported on comments from the Peterson Institute’s Adam Posen that accurately summarized the view of many trade- watchers
• Key quote: “This is a show trial,” Posen said. “This is something where they’ve predetermined both the verdict and the schedule on which the verdict would be read and they’re going backwards to fill it in.”