Trump has no choice but to land a trade deal with China

Trump has no choice but to land a trade deal with China
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President Trump is playing hard to get in his trade negotiations with China, raising the stakes with new tariffs and pretending to be unperturbed by the consequences . But Trump will have to settle this dispute if he wants a serious shot at reelection—even if it means caving—and get it done by the end of summer. Trump thinks he has the upper hand with China because the U.S. economy looks strong and he believes his trade war hurts China more than America. But that’s backward-looking. The U.S. economy is probably getting weaker, not stronger, with Trump’s own trade policy part of the cause. Financial markets are swooning. And the stimulus from the 2017 tax cuts is wearing off, leaving Trump less margin for error than he probably thinks he has. The recent selloff in stocks and sharp drop in interest rates reflect investor worry over a slowing global economy. The U.S.-China trade dispute is part of that, since tariffs and other protectionist measures raise costs for everybody and reduce economic activity. Trump’s new plan to hit Mexican imports with tariffs is another drag on markets. But there are other troubling signs beyond trade, such as falling prices for key commodities, rising unemployment in Europe and the never-ending Brexit saga. The U.S. economy isn’t poised for recession, but GDP growth could slow from a solid 3.1% rate in the first quarter to 1.3% in the current one, according to the Atlanta Federal Reserve’s latest forecast . A key measure of […]

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