Lighthizer Confirms China Pledged $40BN In Ag Buys Next Year, There Is Just One Problem…
US Trade Representative Lighthizer has released some details of the phase one US-China trade deal… there’s just one big elephant in the room that is raising a few eyebrows.
Apparently confirming President Trump’s comments, Lighthizer told reporters that China has agreed to purchase USD 40bln in Agricultural goods in the first year (with best efforts to increase that to USD 50bln), that there will be additional negotiations and the deal is expected to be signed in early January (at a ministerial level – not Xi and Trump). Lighthizer confirmed that China’s expectation is that there will be further phases and further reductions in tariffs, and he confirmed that the agreement will increase US Trade to China by USD 200bln over 2 years. (There will reportedly be a more detailed factsheet released this afternoon).
That all sounds awesome, right?
Well, to reach $40 billion next year, China would have to quadruple its US Agricultural imports!!
In 2018, China bought less than $10 billion in Ags from the US (and to reach $50 billion would mean to double the previous record high Ag exports)…
And as US purchases from US have plunged, they have shifted demand to Latin America…
So Brazil will be very upset if this deal is actually fulfilled, and it will likely mean China breaking contracts with its new suppliers.
All of which explains two things:
Why Agricultural commodities are not screaming higher…
And neither are stocks, yuan, or copper, as investors appear to be discounting the rising probability of the Phase One Deal being busted within a few months as the “promised” purchases do not occur… and if that is close to the elections, it could well mean an ugly market reaction.
CNN Producer Accused Of Rewarding Female Employees For Sexual Favors Quits Following Project Veritas Exposé
An October exposé by Project Veritas has resulted in the resignation of CNN producer Steve Brusk, who was accused on undercover footage of sexual misconduct and rewarding female employees for sexual favors.
BREAKING: “He(@stevebruskCNN) would make advances if there was a social gathering and they were drunk…put his arm around them, try and touch their leg…build up emails to the level where he would get flirty and inappropriate” – Rick Saleeby, Senior Producer @CNN#MeTooCNNpic.twitter.com/QDJL9cFBlE
In a November 26 email obtained by The Wrap, Brusk wrote: “As I mark my 20-year anniversary at CNN this week, I have made the hard decision that this is the right time to step down,” adding “Truth be told, I have barely had any time off or gotten much sleep the last five years — as we covered the campaign, the transition and the historic White House story. The stress of the last several weeks and being able to be home with my family for the holidays has confirmed for me this is the right decision.”
Apparently Steve is the real victim here – despite credible allegations that he made unwanted advances on women during social gatherings.
When speaking about CNN Politics Supervising Producer and White House Unit Supervising Producer/Coverage Manager, Steve Brusk, ‘The Lead with Jake Tapper’ Senior Producer Rick Saleeby said: “…he would like make advances if there was a social gathering and they were drunk… Put his arms around them, try and touch their leg. Try and build up emails to the level where he would get flirty and inappropriate.” –Project Veritas
Saleeby, Tapper’s senior producer, went on to describe how he had to rescue a 21-year-old woman from a lecherous Brusk during a party for a co-worker.
“So, like, there is this girl that was twenty-one. She’s actually a good friend of mine. She had just gotten hired after being an intern…And she was getting…There was a going away party for a co-worker. We were all having a really good time…She was very well liked. We were getting drunk. He started like staying close to her…Arm around her.”
Saleeby went on to describe the scene with more details: “She had a skirt on. I could see the hand. I like grab her. It looked like I was being the assaulter because I grabbed her so aggressive…To keep her from him. Like go around her and go Come over here and looked at him because I could flatten him…It was like…I wouldn’t do it because then I would be the one who got fired…He would have absolutely been like ‘get in a cab with me later.’”
Saleeby states that he found out later that there had allegedly been prior accusations against Brusk:“Because she was drunk. He had his arm around her. And in the setting like any other time ever, they barely speak…But he was like, trying to like, touch her thigh…He had already been accused of the things prior…Which I found out…Which I found out later.”
Saleeby then suggests that Brusk would have been fired in today’s “Me-Too” climate where “People are afraid to do shit.”
“I mean he has been at CNN for like twenty years…People have gotten away with a lot of sh*t,” Saleeby added.
Another CNN employee suggested Brusk rewarded sexual favors.
Nick Neville, CNN’s Media Coordinator, said “I will just say this, because this is open knowledge, it’s not like a Me Too thing, but there was this other girl who was like an NA (News Assistant), I feel like we basically had the same level of experience…And a job just kind of like appeared out of nowhere…And it was never posted online, and this girl always worked pretty closely with Steve, like all of us on the desk would help Steve out with stuff…But this other girl works pretty closely with him and he would email her, I mean, he emails all of us, but he would email and was very friendly to her. And then she just like got a job like working on his team and she was like, oh it’s hush-hush. The job was never posted anywhere. I was like, what is it?…I just thought it was a little strange…Was there an agreement? What happened there?…Like I’m saying, that’s open knowledge, but it just kind of like goes along with what he said.”
In a crackdown against peer-to-peer lending, Chinese law enforcement officers raided the Beijing offices of a New York-listed lending company and have detained the chairman for suspected financial crimes, reported the Financial Times.
Li Yonghui, the chairman of Fincera, was detained in the northern Chinese city of Shijiazhuang on Friday morning, has been accused of illegal acceptance of public funds.
“The net worth of households and nonprofits rose to $113.8 trillion during the third quarter of 2019. The value of directly and indirectly held corporate equities decreased $0.3 trillion and the value of real estate increased $0.2 trillion.”
According to a Bloomberg report published Friday morning, sources with inside knowledge said DB is going to be cutting its bonus pool by 20%, making Sewing’s task of retaining top talent even more difficult than it would have otherwise been.
The 20% cut far outpaces the 5% reduction in headcount that’s taken place in 2019. But Sewing has promised DB shareholders $6 billion in cost cuts as part of his turnaround strategy, and for that to work, there’s no way the bonus pool can go untouched.
It’s a problem because, as BBG explains, Sewing has pitched DB’s moribund investment bank as the centerpiece of his turnaround strategy. After selling off or shuttering unprofitable businesses, Sewing is hoping to restructure the investment bank, focusing on advisory and corporate banking, while moving away from trading. But all of those businesses rely on rainmakers at the top to bring in the business.
Sewing will need skilled managers and dedicated people in the top positions to make the turnaround work. Unfortunately, revenue at the investment bank, which is led by Mark Fedorcik and Ram Nayak, was down 11% in the first nine months of 2019, while pretax profit plummeted by 47%.
The banks is already suffering from considerable brain drain. In the months before Sewing announced his $8 billion “reinvention” of DB earlier this year, a raft of senior executives left the bank, and even more personnel left after Sewing warned that the bank would seek to cut its headcount substantially in the coming years by getting rid of roughly 18,000 jobs.
Despite the investment banks weak results for 2019, Sewing has said that “momentum” has been improving, though the investment bank’s turnaround is anything but certain. Apparently, DB’s PR team has managed to convince the financial press that, five months in, Sewing’s turnaround plan is starting to show some improvements.
Of course, a shrinking bonus pool is nothing new for DB employees: the bonus pool has been shrinking for years.
One factor acting in Sewing’s favor is the fact that DB likely won’t be alone among its European banking rivals in handing out smaller bonuses this year. But with DB shares still struggling to climb off of all-time lows, and many still in doubt, Sewing is going to need to make those bonus dollars stretch as far as he can. And that means there will undoubtedly be thousands of young bankers at DB who go home disappointed this Christmas (if they’re not working through the holidays, that is).
Recently the central banks have found themselves grasping at straws when it comes to moving the economy forward. Signs have begun to appear on the horizon that in the future they will attempt to expand their power by increasing their role in social engineering. This is a term that refers to efforts to influence particular attitudes and social behaviors on a large scale. Its goal is to produce or change certain desired social characteristics in a population. In the past, this has been more the role of governments with the consent of the people often through laws and tax policies.
In America, the Fed was initially given the mandate to create a stable monetary environment. Since that time it has been expanded into what is now known collectively as the “dual mandate.” Now its two goals also include achieving maximum sustainable employment in conjunction with price stability. The Federal Reserve’s Federal Open Market Committee (FOMC), which sets U.S. monetary policy, has translated these mandates in rather broad terms.
In the last few weeks, Christine Lagarde, the new head of the ECB, said something that shocked many people. She stated,
“We should be happier to have a job than to have our savings protected… I think that it is in this spirit that monetary policy has been decided by my predecessors and I think they made quite a beneficial choice.”
If this is true we are in big trouble. It is a sign that something is terribly wrong, the idea that you can have a job but you can’t save anything, places workers in a position of servitude where they are dependent on, at the total mercy of the economy and the government.
For many decades the entire financial system has been built on the premise that people save, either to purchase big items or for their old age. Is Lagarde suggesting that workers and those that have saved may soon be as dependent on the government as those already wrapped in the safety of government social programs that provide them with shelter and food? This comes at a time when it is predicted that more robots and automation will soon move in and strips humans of their jobs. With great sarcasm, one could opine that things would appear rather bleak without the generosity of central bankers.
The fact is, much of the money that has been saved by workers has flowed into pension systems and paper promises which the central banks feel compelled to support to keep the financial system afloat. Shortly after Lagarde’s remark Fed Chairman, Jay Powell commented thatUS central bankers see a “sustained expansion” ahead for the country’s economy, with the full impact of recent interest rate cuts still to be felt. This follows a massive injection of liquidity to financial markets,
On top of this, Japan has just laid out another massive stimulus package.This highlights the failure of negative interest rates to move the country forward. This should make it clear, that “extreme has become the new normal.” Now with the economy and governments totally dependent on freshly released goodies flowing from the central banks it looks like they are ready to up their game and move more into social engineering. This dovetails with the efforts of those endorsing a New World Order to push forward with “the Green New Deal” as a way to take control of the future.
A hint of her desire to move in this direction, for the “greater good,” came in Lagarde’s much anticipated first appearance as president of the ECB before at the European Parliament. Many of the questions at the parliament hearing focused on climate change, an area where the central bank is under pressure to play a bigger role.Lagarde indicated the fight against climate change should be a central part of policy. Lagarde also said it was also worth discussing whether climate concerns should impact the ECB’s QE policy.
This intersects with globalists and those endorsing a New World Order pushing the Green New Deal agenda forward as a way to take control of the future. This extends into the dangerous area of central banks taking positions that propels forward investments in what is claimed to be environmentally friendly initiatives. Lagarde is out front with this as she goes about galvanizing her new position at the ECB. Now with an alarming new United Nations report screaming that climate change is probably the biggest challenge of our time she has something she can clone onto. Consider this an effort for central banks to regain their credibility and mitigate damage to their reputations for bailing out the very people that created the last economic crises. After exacerbating inequality they are now introducing to the conversation expanding and pursue new mandates
Over the years we have been sold many empty promises. Much of this has been driven by mega-companies desire for larger markets and greed. Today, many large companies have more power than most nations and their power continues to grow. In the past, it was large oil conglomerates that held the power but today much of it has shifted to technology companies. Knowledge is power and this means is not just about large conglomerates that produce products or energy but extends into how internet companies, in particular, have placed themselves in the position where they control the communication networks collecting and storing data on all of us putting them in a position to manipulate us in every way.
The problem of giving these clowns (that have already failed to guide us towards a sustainable economic future) the power to assess whether and to what extent an asset is environmentally harmful or helpful is incredibly problematic. It is extremely difficult to think public officials and bankers that seem almost afraid to talk about conservation are in any way the answer. The dreaded “C” word, conserve, has no place in their vocabulary. Big business and their lobbyist have made this subject taboo because cutting back on waste would massively lower the GDP.
Forever and a day, the central banks and politicians have been busy urging consumers to buy, buy, and then buy more even if it puts you in debt. They have also encouraged people to make investments no matter if they are warranted or not. The thing they have not pursued is giving people enough reason to sacrifice and save. All this has been done to drive the economy forward. The idea they are capable of reversing decades of trained behavior and successfully replacing domestic consumption with quality infrastructure spending is pure folly. In the end, it will result in a slew of bridges to nowhere and failed boondoggles that line the pockets of the same mega-companies that have profited in the past.
‘Not My Prime Minister’ – Radical Left Marches Against Democracy In Britain
Apparently, the British people have ignored the anguished shrieks from the Extinction Rebellion protesters, Stand Up To Racissm rabble and other myriad constituencies of the British far-left about how “people WILL die!” unless Jeremy Corbyn’s vision of society is imposed on Great Britain. Instead, the Tories have carried the biggest majority in decades, every single strategic decision by Johnson and Dominic Cummings (including the ruled-unconstitutional decision to suspend – or “prorogue” – parliament) has been vindicated and Corbyn has already announced his plans to quit, joining predecessor Ed Milliband on the scrap-heap of British political history.
Yes, the people have spoken. And the result was a resounding rejection of Corbyn’s left-wing populist agenda. Though they wield a loud microphone on social media, the far-left doesn’t have the support of a majority of the people – or even a majority of the working class that young ‘democratic socialists’ claim to represent.
Sadly, one of the traits of the modern-day left is that they are terribly sore losers. And instead of wishing Johnson luck and acknowledging and accepting that mistakes were made on their end, the radical left is encouraging everyone angry with the election results to join them in the street for a protest of ‘racist’ Johnson – and of democratic values themselves.
As PJW pointed out this morning, almost as soon as the results were official, Facebook events called for anti-Tory marches
Of course, many of those participating – and blaming their parents and relatives for voting for the ‘wrong’ candidate – simply don’t realize that they are the true bigots.
If you smear the working class & elderly as racist & stupid, you’re a bigot.
If you see fascism everywhere in one of the most tolerant countries, you’re a fantasist.
If you have contempt for democracy, you’re an elitist.
But that’s not all. In the age of Russian intervention, some Britons are already blaming Russia for meddling in the election, and tilting the vote in Johnson’s favor – just like they said (wrongly) that Russia successfully helped sway the EU referendum.
Ironically, Glenn Simpson and Peter Fritsch of Fusion GPS, the oppo research firm that first brought the Steele Dossier to the FBI, have published an editorial in the Guardian claiming that Russian influence has thoroughly infiltrated the British electoral system, and that the UK needs “a Mueller report” of its own.
Far from being a proponent of ‘objective’ journalism, the famously not-for-profit Guardian has become the booster for the Labour Party (donations are reportedly up since it pivoted toward becoming the British Huffington Post). It has also established itself as a uniquely well-situated platform for Americans or other foreigners to comment on British politics.
A Hashtag is already circulating: #NotMyPM – attached to tweets warning about how the Tories absolutely will privatize the NHS.
#NotMyPM — mark my words, it is inevitable that the Tories WILL privatise the NHS and all those that voted Tories or could have voted but thought your vote wouldn’t matter so didn’t bother, will look back at the general election of 2019 and wished you had voted differently. pic.twitter.com/e2HvJiazBN
The Federalist’s Sean Davis accused Simpson and Fritsch of being con artists who are already blaming Russia for an election that didn’t go there way, with zero evidence to support that notion.
Glenn Simpson and Peter Fritsch of Fusion GPS are the most shameless and disgraceful con artists of the modern era.
The votes aren’t even counted yet in Great Britain and they’re already blaming RUSSIA RUSSIA RUSSIA for anti-Semite Jeremy Corbyn’s loss. https://t.co/J1LsdRwrha
And rather than being some kind of fluke, it’s becoming increasingly clear that Johnson’s performance is part of a trend of populist victories across Europe, including in the UK.
I think it’s safe to say that the conservative-nationalist phenomenon is no fluke or “black-swan” event.
On Twitter, the backlash was particularly virulent.
When will the UK come to grips with the obvious Russia meddling in your election. The UK needs a do-over once Russian assets are purged from Facebook, Instagram, Sky News, the Telegraph and Tinder.
Others mocked the leftists whining about the election.
Damn the UK voters meddling in an election once more, voting for the wrong result yet again, damn russia!! Are u going to complain and try overthrow this vote like the brexit vote u want a re-do for? #LetsGetBrexitDone
But perhaps the most hilarious thing we’ve seen is the headline to this Guardian article.
With other classic quotes like “Corbyn: A good man, ripped to pieces.”
We imagine the streets will be soaked with tears as the public and British conservatives who momentarily feared Corbyn now revert back to laughing him off as a caricature. His supporters will likely take umbrage at that for a long time.
Despite the OPEC+ cuts, the oil market is still facing a supply surplus in 2020, according to a new report from the International Energy Agency (IEA).
OPEC+ announced additional cuts of 500,000 bpd, which sounds more impressive than it is because the group was already producing under its limit. In November, for instance, OPEC was producing 440,000 bpd below the agreed upon ceiling.
Saudi Arabia agreed to shoulder an additional 400,000 bpd of voluntary cuts. But the deal also exempts 1.5 million barrels per day (mb/d) of Russia’s condensate production, allowing Russia to actually increase condensate output by 0.8 mb/d.
Still, the deal should take supply off the market.
“If all the countries comply with their new allocations and Saudi Arabia delivers the rest of its voluntary cut of 0.4 mb/d, the fall in production volume versus today will be about 0.5 mb/d,” the IEA said.
OPEC said in its own report that the oil market would be largely in balance in 2020, albeit with a temporary glut in the early part of the year. The IEA sees inventories building at a rate of 0.7 mb/d in the first quarter.
The IEA cut its forecast for non-OPEC supply growth from 2.3 mb/d to 2.1 mb/d, due to weaker growth from Brazil, Ghana and the United States. The U.S. typically gets all of the attention, but disappointing news from Brazil and Ghana also led the IEA to revise forecasts lower.
Notably, Tullow Oil revealed a major disappointment from its Ghana operations, causing a complete meltdown in its share price this week. Its stock fell nearly 70 percent in a single day as investors overhauled their valuation of the company. Tullow admitted that its production from Ghana would decline in the years ahead.
But even the combined effect of slower non-OPEC production growth and the OPEC+ cuts is not enough to erase the glut entirely. “[W]ith our demand outlook unchanged, there could still be a surplus of 0.7 mb/d in the market in 1Q20,” the IEA said.
“Even if they adhere strictly to the cut, there is still likely to be a strong build in inventories during the first half of next year,” the IEA warned.
But the forecasted glut largely depends on ongoing production growth from U.S. shale drillers. The IEA admits that there will be a slowdown, but is still optimistic on production growth, with gains of 1.1 mb/d in 2020, compared to 1.6 mb/d this year.
The agency has consistently been at the optimistic end of the spectrum regarding shale growth, even as major investment banks long ago slashed their forecasts. The IEA cut its U.S. supply forecast by 110,000 bpd from last month’s report, but at 1.1 mb/d, its figure still seems generous. The IEA is betting that the oil majors, who are less responsive to lower prices and problems with cash flow, will continue to scale up drilling.
Meanwhile, a new report from IHS Markit highlights the accelerating rate of decline among the U.S. shale complex, a decline rate that grows in tandem with production increases.
“Oil and gas operators in the Permian Basin, the most prolific hydrocarbon resource basin in North America, will have to drill substantially more wells just to maintain current production levels and even more to grow production, owing to the high level of recent growth,” IHS said in a statement.
The base decline rate in the Permian has “increased dramatically” since 2010.
“Base decline is the volume that oil and gas producers need to add from new wells just to stay where they are—it is the speed of the treadmill,” said Raoul LeBlanc, vice president of Unconventional Oil and Gas at IHS Markit.
“Because of the large increases of recent years, the base decline production rate for the Permian Basin has increased dramatically, and we expect those declines to continue to accelerate. As a result, it is going to be challenging, especially for some companies with cash constraints, just to keep production flat.”
The firm sees U.S. production growth of only 440,000 bpd in 2020, before flattening out in 2021. If this proves accurate, OPEC+ might not need to worry as much.
Confused What’s In The “Phase One” Deal? The USTR Explains
For those confused about what the US and China actually agreed on after months of negotiations and all that confusion in the past few hours, here is the bottom line,from the USTR: “The United States will be maintaining 25 percent tariffs on approximately $250 billion of Chinese imports, along with 7.5 percent tariffs on approximately $120 billion of Chinese imports.”
Furthermore, while not expressly stated in the USTR recap of the “deal”, Trump tweeted earlier that no new tariffs will be imposed on Dec 15, while negotiations over the next, Phase Two, deal begin immediately. As a reminder, since this “deal” includes enforcement over actually complicated issues such as intellectual property theft, it will never be concluded.
So what does the US get in exchange? It remains unclear – China has promised to buy “more” agri products, but without providing actual details, while saying it plans to import US wheat, rice, and corn within quotas.
CHINA VICE STATE PLANNER HEAD, ASKED ABOUT COMMITMENT ON U.S. FARM GOODS PURCHASES, SAYS VALUE OF U.S. FARM PURCHASES WILL BE DISCLOSED AT LATER DATE
The USTR also said that The Phase One agreement “includes a commitment by China that it will make substantial additional purchases of U.S. goods and services in the coming years.” However according to some that merely means that it will merely seek to raise its US agri imports back to $20bn, where they were in 2017 and before.
In any case, China did not give any indication of just what it had promised to purchase volume or dollar wise, suggesting there was no explicit agreement on this issue.
Separately, the USTR notes that the Phase One deal “requires structural reforms and other changes to China’s economic and trade regime in the areas of intellectual property, technology transfer, agriculture, financial services, and currency and foreign exchange”, however since there is no actual enforcement mechanism besides merely pushing tariffs back to where they were, none of this will be implemented.
Meanwhile, as Fox Business reporter Edward Lawrence notes, “Chinese say the deal is in 9 chapters.. it deals with protections for intellectual property, but also the forced transfer of technology. The US Trade Representative says there is a dispute mechanism in the Phase One deal.” Of course, those 9 chapters will never be made public.
In short: Trump folded without getting any tangible concessions from China merely to avoid new tariffs, and potentially a market crash. Meanwhile, there are virtually no details what China has agreed to do, and despite the USTR’s insistence to the contrary, there apepars to be no actual enforcement mechanism to make sure China does not reneg on the agreement.
The United States and China have reached an historic and enforceable agreement on a Phase One trade deal that requires structural reforms and other changes to China’s economic and trade regime in the areas of intellectual property, technology transfer, agriculture, financial services, and currency and foreign exchange. The Phase One agreement also includes a commitment by China that it will make substantial additional purchases of U.S. goods and services in the coming years. Importantly, the agreement establishes a strong dispute resolution system that ensures prompt and effective implementation and enforcement. The United States has agreed to modify its Section 301 tariff actions in a significant way.
“President Trump has focused on concluding a Phase One agreement that achieves meaningful, fully-enforceable structural changes and begins rebalancing the U.S.-China trade relationship. This unprecedented agreement accomplishes those very significant goals and would not have been possible without the President’s strong leadership,” said United States Trade Representative Robert Lighthizer.
“Today’s announcement of a Phase One agreement with China is another significant step forward in advancing President Trump’s economic agenda. Thanks to the President’s leadership, this landmark agreement marks critical progress toward a more balanced trade relationship and a more level playing field for American workers and companies,” said Secretary of the Treasury Steven Mnuchin.
The United States first imposed tariffs on imports from China based on the findings of the Section 301 investigation on China’s acts, policies, and practices related to technology transfer, intellectual property, and innovation. The United States will be maintaining 25 percent tariffs on approximately $250 billion of Chinese imports, along with 7.5 percent tariffs on approximately $120 billion of Chinese imports.
US has agreed to keep promise to cancel tariffs “step by step” (end part of existing tariffs, cancel tariffs to be imposed, expand exemptions)
China to buy more US goods “without doubt” but on market need (i.e., no target)
And just for kicks, here is a statement released by former Treasury Secretary Hank Paulson – yes, the same one who brought us TARP – who was an advisor on the China trade talks:
Trump: No New Tariffs, Sept Tariffs Cut In Half, All Other Tariffs Remain; Phase II Negotiations “Begin Immediately”
Confirming what we said earlier, namely that the December 15 tariffs will not be imposed, but existing tariffs will not be rolled back (although the September 15% tariffs will be cut in half) even though China says the US has “promised” to do so in phases, moments ago president Trump tweeted his own take of what the trade deal says, which is the following:
“We have agreed to a very large Phase One Deal with China.
They have agreed to many structural changes and massive purchases of Agricultural Product, Energy, and Manufactured Goods, plus much more.
The 25% Tariffs will remain as is, with 7 1/2% put on much of the remainder.
The Penalty Tariffs set for December 15th will not be charged because of the fact that we made the deal.
We will begin negotiations on the Phase Two Deal immediately, rather than waiting until after the 2020 Election. This is an amazing deal for all. Thank you!”
…..The Penalty Tariffs set for December 15th will not be charged because of the fact that we made the deal. We will begin negotiations on the Phase Two Deal immediately, rather than waiting until after the 2020 Election. This is an amazing deal for all. Thank you!
For those who have lost track, of all the various moving parts, here is a snapshot of all the tariffs, with the notable item being the September $120BN tariffs whose rate will be cut in half, from 15% to 7.5%.
Meanwhile, for those who missed the earlier recap of the Chinese presser, this is what was said:
CHINA: U.S. TO REMOVE TARIFFS ON CHINESE GOODS IN PHASES
CHINA: FIRST PHASE TRADE TALKS HAVE ACHIEVED MAJOR ADVANCEMENT
CHINA: THE DEAL WILL HELP BOOST GLOBAL MARKET CONFIDENCE
CHINA: WILL COMPLETE ASAP TRANSLATION, LEGAL REVIEW OF DEAL
CHINA: TO INCREASE IMPORTS FROM U.S. AND OTHERS
CHINA: SIDES AGREE TO COMPLETE LAST STAGES AS SOON AS POSSIBLE
CHINA: WILL WORK TO SET A DATE FOR SIGNING DEAL
CHINA: HAS DECIDED TO CANCEL TARIFFS SCHEDULED TO TAKE EFFECT ON SUNDAY
CHINA: U.S. HAS PROMISED TO CANCEL ADDITIONAL TARIFFS ON CHINESE PRODUCTS
Some details on agri products:
CHINA PLANS TO IMPORT U.S. WHEAT, RICE, CORN WITHIN QUOTAS
Yet the confusion grows because contrary to the US spin on the deal, China refuses any mention of boosting agri imports:
CHINA DIDN’T ANSWER QUESTION ON SIZE OF AG BUYS FROM U.S.
SOY, HOGS PARE GAINS; CHINA SAYS NO DETAILS YET ON AG IMPORTS
This confirms that China opposes any contractual agreement to boost US imports as that would put Chinese farmers at a disadvantage, and forcing Beijing to provide stimulus.
In conclusion:
CHINA: ARE TALKING ABOUT TIMING, PLACE, DETAILS OF SIGNING DEAL
It is unclear if both sides will sign their own version of what the deal says.
This is how we summarized the Chinese presser:
the December 15 tariffs will not be imposed, but existing tariffs will not be rolled back even though China says the US has “promised” to do so in phases. In other words, once again there is no actual Phase 1 deal, there is just an agreement to avoid a new round of tariffs with both sides making vague promises.
So to summarize again” there is no actual, enforceable deal. There is only a “deal” for public consumption, one that indicates both sides have promised to make unenforceable concessions, with no new tariffs imposed and Trump cutting the Sept 2019 tariffs in half from 15% to 7.5%.
Meanwhile, Trump has already hinted how he will levitate the market for the next year – by danging hope that Phase 2 is going great and will be completed any minute, even though China denied, saying that:
NEGOTIATIONS FOR PHASE TWO DEAL TO DEPEND ON IMPLEMENTATION OF PHASE ONE DEAL – CHINA VICE FINANCE MINISTER
