So much for the good feeling about that trade framework supposedly negotiated between Presidents Donald Trump and Xi Jinping on the weekend. Equity markets rallied on Monday following reports by U.S. officials that the U.S.-China dinner in Argentina represented tangible trade progress. But stocks gave it all back and then some on Tuesday, as the fine print seemed nonexistent and bond yields started to fall back to levels that often signal slower economic growth.
But Chinese officials have been notably quiet and unspecific since the weekend about the commitments they made in Argentina. They haven’t even confirmed the 90-day negotiating deadline that Trump officials have stressed. In other words, who’s on first?
Then on Tuesday Mr. Trump belly-flopped into the debate, as he is wont to do. In a Twitter barrage, the President expressed optimism about his weekend meeting and the chances of a deal. But he added that “remember . . . I am a Tariff Man. When people or countries come in to raid the great wealth of our Nation, I want them to pay for the privilege of doing so. It will always be the best way to max out our economic power.” All that was missing was a leotard with a T on the chest and a cape.
Markets apparently didn’t see the super hero humor and promptly sold off. Perhaps they know that tariffs are taxes on commerce, and when you tax something you get less of it. Mr. T’s unveiling also hit on the day after the yield curve on some Treasurys began to invert—which can mean trouble. The economy is still strong enough to survive some uncertainty, but Tariff Man shouldn’t go to war with the laws of economics. He’ll lose.https://www.wsj.com/articles/i-am-a-tar ... 1543965558