And just like that, the newsflow on trade talks turned sour. It started with Beijing’s foot-dragging in the past weeks on a ‘phase 1’ deal by demanding a rollback of some or all existing tariffs (Beijing never specified the extent of existing tariffs that have to be cancelled ex ante). President Trump responded yesterday by raising the stakes, saying that he has no deadline in the trade talks and that it might be better to wait and strike a deal only until after the 2020 elections. Since the trade war with China has been going on for a year and a half, and with the Democrats not very confident on actually impeaching Trump (why else did Michael Bloomberg decide to run for President as a Democrat – clearly not because he believes Trump will be removed from office), Trump’s threat to go the mattresses is credible. Or credible enough. And if you’re not familiar with that Mafia slang, going to the mattresses is preparing for a war that might last a little while.

 

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