Chinese media takes a victory lap after US climbs down on tariffs

China has its spin working

There’s the trade war and there’s the domestic propaganda war. Both sides continually claim victory at all times. Xinhua is highlighting how it was the US who called China, which is a soft way to highlight that it was the US that blinked.
The Global Times is taking a more festive approach.
China has its spin working
Trump hates more than anything to be ‘seen’ as a loser in negotiations. In the past, China let him have his victories but now they seem to be priming the domestic audience for a fight.

Former (Trump) White House communications director says Trump may need to be replaced for 2020

LOL @ The Mooch. Anthony Scaramucci was President Trump’s communications director for 11 days

Says Republicans may need to pick a different candidate in 2020
Axios reports on Sunday comment from The Mooch:
  • compared Trump to a melting nuclear reactor
  • said he may support a Republican challenger to Trump
  • “We are now in the early episodes of ‘Chernobyl’ on HBO, where the reactor is melting down and the apparatchiks are trying to figure out whether to cover it up or start the clean-up process”
    “A couple more weeks like this and ‘country over party’ is going to require the Republicans to replace the top of the ticket in 2020.”
Dunno if this is what is moving yen higher. But politics is seemingly outweighing everything else lately!
LOL @ The Mooch. Anthony Scaramucci was President Trump's communications director for 11 days

North Korea have fired off more missiles (Saturday morning)

North Korea have fired off another round of ballistic missile tests Saturday morning NK time.

  • at least two short range missiles fired into the sea
  • off the NK east coast, Hamhung area
North Korea tested ballistic missiles earlier this week also. North Korea have been firing them quite regularly ever since the June 30 meeting between North Korean dictator Kim Jong Un and US President Trump.
North Korea have fired off another round of ballistic missile tests Saturday morning NK time.
While this is a yen positive (rising geopolitical tensions prompt flows to liquidity) the market has become a bit jaded with the regular tests.

US Treasury Secretary Mnuchin says China is a currency manipulator

US Treasury Secretary Mnuchin has said China is a currency manipulator. Via an official Treasury statement.

Mnuchin adds:
  • will engage with the IMF to eliminate unfair competitive advantage by China’s actions
  • says China’s actions are a violation of China’s G20 commitments to refrain from competitive devaluation
  • Says continues to urge China to enhance the transparency of its exhange rate and reserve management operations and goals
President Trump has been wanting China names as a currency manipulator and he finally gets his wish granted by Treasury
Mnuchin finally doing what the boss tells him to do. Oh, the Prez, not his wife.
US Treasury Secretary Mnuchin has said China is a currency manipulator. Via an official Treasury statement. 

Almost all of Trump’s advisors tried to talk him out of fresh China tariffs – report

Trump overruled advisors after ‘heated’ exchange

The Wall Street Journal reports that Trump unilaterally decided that tariffs were needed after a failed round of trade talks last week.
Trump was frustrated after a briefing with Mnuchin and Lighthizer where he said neither could relay promises from Beijing to buy more agricultural goods.

“Tariffs,” Mr. Trump said to his team, one of the people said. Those present included his national-security adviser John Bolton, top economic adviser Lawrence Kudlow, China adviser Peter Navarro and acting chief of staff Mick Mulvaney.

All of them, save Mr. Navarro, a China hawk, adamantly objected to the tariffs, the people said. That spurred a debate lasting nearly two hours, one of the people said.

Trump told them his patience had worn thin.
In terms of what it means for the market this is a bad-news/good-news situation. The good news is that there is no grand, coordinated strategy here and that nearly all of the people advising Trump were against it. The bad news is that Trump is in love with tariffs and willing to overrule the people around him in order to get them.
Finally, you can’t rule out that this is a fake leak that’s part of some kind of strategy. Maybe that Mnuchin and Lighthizer go to the next round of talks and say “we need to bring back something or Trump is going to raise the tariffs to 25%.” But that seems to be a pretty questionable strategy to me.
This tweet from December remains the most-telling tweet of Trump’s Presidency.
Trump tweet

China press: Beijing ‘won’t give an inch’ to Trump

The latest from the South China Morning Post

The latest from the South China Morning Post
A just-published article highlights comments from the foreign ministry and commerce ministry on Trump’s new tariffs.
Both the foreign and commerce ministries said the US would have to “bear all the consequences”and demanded more sincerity from Washington if negotiations were to continue following the president’s latest announcement, which caught many in Beijing off guard.
The statements indicate that plans for further talks could be shelved after the US broke an agreement not to impose further tariffs during negotiations. It also hinted at retaliation.

Officials did not give details on the possible counter measures China would take, but observers said China would be less willing to buy US agricultural products, and could restrict exports of rare earths – a key material used in the manufacturing of hi-tech products such as smartphones .

It may also speed up the production of its list of “unreliable entities” – companies deemed to pose a threat to China’s interests – a measure that could target US firms and hamper their operations in China.

Read it here.

Global Times Xijin: China will focus on national strategy under a prolonged trade war

China Global Times Editor Hu Xijin tweets

China’s Global Times editor Hu Xijin is tweeting:
China Global Times Editor Hu Xijin tweets
Xijin is thought to be a sounding board for the government of China but don’t be fooled… the thoughts are meant to manipulate.
For example, he tweeted yesterday, maybe in hopes to make people (Trump?) think that the trade talks were not bad.   In reality, things did not go well.
Hu Xijin tweet...
The tweet above, is intended to portray a China that is not concerned.
Trump meanwhile commented in his impromptu press conference, “That if China does not want to trade, that is fine with him”.
Now there is a level of dealmaking gamemanship from Pres. Trump as well.  Who holds the stronger hand in this game of chicken?  It seems the US does (but with some casualties too), but that does not mean China will admit guilt on things like IP theft anytime soon.  The war continues

North Korean launch earlier Wednesday was two short range ballistic missiles

According to ABC news citing US officials

the North Korean launch early Wednesday was two short range ballistic missiles. This is according to US officials.

The projectiles flow 240 – 330 km according to Yonhap news. They add:
  • projectiles launched by North Korea were different type from previous weapons
The Japan defense minister said that if the North Korean launch was “ballistic missiles”, that would violate UN resolutions and be very regrettable.
I am not not sure if the “short range ballistice missiles” are in violation (i.e., is it only long range ballistic missiles).  In any case, Japan is never comfortable with North Korea firing anything over or near their country.

North Korea fired multiple unidentified projectiles early Wednesday

According to Yonhap citing South Korean military

A report from Yonhap news agency citing South Korean military, the North Koreans have fired multiple unidentified projectiles early on Wednesday.

No other details as of yet.

President Trump said on Friday, that he is not bothered by North Korea’s decision to fire two short-range missiles this week.  He may not be concerned but Asian neighbors are.

Trump said “short-range” was the most important word. He says North Korea fired “standard” missiles many countries possess.

They were the first weapons North Korea has launched in more than two months. Apparently they are at it again.