MILES KENT WRITES– The G20 Summit, an annual gathering of 20 established and developing economies that took place, has been called an American automaker win by the Trump administration. Following a meeting with Chinese President Xi Jinping, President Trump tweeted about Chinese plans “to reduce and remove tariffs on American cars coming into China from the U.S.”
Many news outlets, including CNN and Fox News, were quick to point out the ambiguity in the President’s tweet, as there was no established cut-off time for the tariffs. In addition, some believe that the tariffs might not help American automakers as much as the President thinks. As CNN Business points out, they won’t help companies like GM or Ford, which still plan on closing plants in the Rust Belt—that series of midwestern states largely dependent on manufacturing.
Voters in these states, who largely voted for Trump in 2016, have yet to see much improvement in employment opportunities. With automation on the rise and the “make it where you sell it” business strategy, this announcement will have very little impact on sales or production.
Despite all the national back and forth on the issue, President’s Trump announcement caught the eye of several global players. Following his tweet, investors actually responded positively; NASDAQ, Dow Jones, and S&P 500 futures indexes saw wide-scale gains throughout Monday. In fact, many companies with interests in China are expected to benefit from this impending de-escalation, including Apple and Deere.
Future trade talks, then, will have a new focus, in areas such as intellectual property theft and cybersecurity. Many companies stand to benefit from this change in policy relations, if in fact it does come to pass.
While Trump’s tweet may not have been that informed or even accurate, both he and President Xi of China considered their meeting highly successful. On the other hand, the 90-day tariff truce may not last even that long, given the lack of a timeline or firm commitment from the Chinese…yet.
Like kids on a seesaw, Trump and Xi just might, in the end, find their balance, come to an agreement and stop this child’s play.