Trump Capitulates to Xi, LOSING Futile, Self-Inflicted Trade War

After two days of tense negotiations in Switzerland, Trump's failed tariffs on China have been put on hold. The newly minted deal meets nearly all of China's core demands, including the suspension of the elevated "reciprocal" tariff. In a coordinated costatement, the two powers announced that the US will be slashing duties on Chinese products closer to a pre-Trump rate of 30% from 145% for a 90-day period, with China dropping its levy on most goods to 10%. Both sides have also agreed to take “aggressive actions” to stem the flow of fentanyl, which could eventually lead to the elimination of the additional 20% tariff.

Xi Jinping’s decision to stand against Donald Trump could hardly have gone any better and has shown other countries that waiting out Trump's whims is a viable strategy, given his weak, all talk no action deal making style.

Xi struck a defiant tone ever since Trump began raising US tariffs to their highest level in a century. In contrast to other world leaders, he refused Trump’s repeated calls to get on the phone with the US president — even as levies rose to levels that China called a “joke.”

This resetting of trade sent the dollar and stocks soaring allowing Trump to do another of his favorite strategies - causing an avoidable issue, fixing it, and then taking credit ffor solving his self inflicted problem.

“This is arguably the best outcome that China could have hoped for — the US backed down,” said Trey McArver, co-founder of research firm Trivium China. “Going forward, this will make the Chinese side confident that they have leverage over the US in any negotiations.”