Tariff Threat

 

• In true game-theory style, President Donald Trump said the U.S. will increase tariffs on China if the first step of a broader agreement isn’t reached.
• “If we don’t make a deal, we’re going to substantially raise those tariffs,” he said Tuesday in a speech to the Economic Club of New York. “And that’s going to be true for other countries that mistreat us too.” 
• Nevertheless, he noted that the world’s two largest economies were “close” on phase one deal. 
• Trump and Chinese President Xi Jinping had planned to sign “phase one” of the deal this month in Chile, but the official ratification hit a roadblock when the event was canceled due to social unrest in Santiago.
• A new site for the signing hasn’t yet been announced. Still, U.S. stocks have rallied to records in recent days partly on optimism that tensions are cooling. 

(Source: Bloomberg)