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The ‘incoherence’ of White House trade talk

If you, as I, watch the noontime financial shows to track investments, retirement accounts and such, you’ve had serious stomach issues the last 10 days or so.  If I hear one more trader or investment analyst explain 500-point drops in the stock market by pointing to “uncertainty” relative to U.S.-China trade, I’m going to do myself a damage, as my Grandmother used to say.

I think the markets would look past the differences in how the U.S. and China publicly describe the pact forged by President Trump and Chinese President Xi Jinping if those in the administration were all singing off the same page.  Any suspicion by traders and investors that the tariff truce is less than solid is exacerbated by conflicting and contradictory statements made by administration officials who should know better.

One analyst blamed market gyrations on “the incoherence of administration trade policy.”  Yup.

We’ve come to expect the president to overstate situations, and in this case, he talked of impending U.S.-China comity while hours later tweeting “I’m Tariff Man,” implying he’d slap higher tariffs on Chinese goods in a heartbeat.  However, he often walks such statements back, mitigating the drama of his latest tweet with at least a modicum of common sense.

Well, Trump needs to step in and remind his “advisors” they sit at White House desks to promote his agenda, not their own, no matter how degrees they have, how many books they’ve written or interviews they’ve given.

I tend to listen to National Economic Council Director Larry Kudlow and Treasury Secretary Steve Mnuchin when it comes to anything trade and export.  I pay less attention to Secretary of Commerce Wilbur Ross as he’s said things about agriculture that I describe kindly as “naive,” and I flat ignore anything said by Peter Navarro, assistant to the President and director of the National Trade Council.  Why, because Kudlow and Mnuchin are free traders, and they generally echo the president; Navarro if isolationist, a trade hawk, and seems to listen only to himself, not his boss, and his remarks are generally unenlightened.

In the week or so since the president announced he and Xi had come to a meeting of the minds over their tariff skirmishes, that the two nations would over the next 90 days engage in serious trade talks, that China would begin “immediately” to buy more U.S. ag, energy and industrial goods, Kudlow and Mnuchin, no doubt with market impact in mind, reiterated the Trump optimism over the China deal.  Navarro has spouted rhetoric designed more to justify his personal take-no-prisoners anti-China biases than to promote the president’s success.

The president said this week, and Kudlow reiterated, that the White House is willing to extend the 90-day negotiating period if there’s “good, solid movement and good action” in talks between the world’s two largest economies.  However, Navarro, an avowed trade hawk with no love for China, didn’t echo his boss or Kudlow, rather he said Trump would “go forward with the strategy” and “simply raise” existing tariffs on $200 billion worth of Chinese goods by 200%.

What’s the market or the investor to believe?