Another TACO Deal? Trump and Vance Soften Their Words About China
China's series of trade retaliatory measures last week, including heavy rare earths, super-hard materials, and lithium batteries, completely threw the Trump administration off balance. Two days after emotionally restarting the tariff extortion against China, Trump on October 12, local time, again sent signals that he was willing to reach an agreement with China to ease tensions.
He posted on social media, "Don't worry about China, everything will be fine," after which U.S. stock index futures rose that night. On the same day, U.S. Vice President Vance said in an interview with Fox News that he hoped China would "choose a rational path."
TACO is the acronym for "Trump Always Cowers Back," often used to mock Trump's tendency to be capricious and eventually compromise in policy implementation.
Bloomberg reported on the 12th that Trump and Vance's statements indicate that the United States wants to continue pressuring China to revoke its recent trade retaliatory measures, while also trying to calm the market, showing that the escalating confrontation between the U.S. and China is not inevitable.
"Don't worry about China, everything will be fine!" Trump wrote on social media, saying that the U.S. wants to help, not harm, China.
Analysts say that Trump is hinting at providing a way to solve the issue between the two countries, while also sending an implicit threat that full-scale trade conflict would cause damage.
American cable news network CNN believes that Trump's statements have changed from before, suggesting that he may not fulfill the threat of increasing tariffs.
On the same day, Vance, during an interview on Fox News, said that if the dispute continues, Trump has more leverage, and he urged China to "choose a rational path."
"This is a game that must be handled carefully, largely depending on how China responds," Vance said. If China is willing to remain rational, the U.S. will too.
He also added that he had spoken with Trump over the weekend, and Trump "values" the friendship with China, and both he and Trump hope there is no need to use more leverage against China.
He did not forget to pressure, saying that if China "chooses to cut off the world's access to some of its products," this good relationship would be threatened.
On October 10, after Trump restarted the tariff extortion against China, the U.S. stock market faced another "Black Friday," experiencing the worst sell-off in six months.
That day, the three major U.S. stock indices all closed lower, with the Dow dropping 878.82 points, a drop of 1.9%; the Nasdaq falling 820.20 points, a decline of 3.56%; and the S&P 500 index falling 182.60 points, a drop of 2.71%. The Nasdaq and S&P 500 indexes recorded their largest single-day declines since April.
The combined market value of the seven major U.S. technology giants fell by approximately $770 billion overnight, with Tesla down over 5%; Amazon down nearly 5%; Apple and Meta down over 3%; Microsoft and Google down over 2%; and Nvidia down 4.89%.
Following Trump's signal to ease the situation, U.S. stock futures increased. As of 6:32 p.m. Eastern Time, the Dow Jones Industrial Average futures rose 0.8%, the S&P 500 Index futures rose 1.04%, and the Nasdaq Composite Index futures rose 1.34%.
Regarding Trump's tariff threats on October 10, Dennis Wild, a former CIA expert on China, said that Trump's response exactly met China's expectations, which is an emotional response.
Nazak Nikahkhtah, a partner at Willi Rayn Law Firm and a former senior official at the Department of Commerce during Trump's first term, said that regardless of Trump's decision, China is unlikely to back down.
"Some people think it's just a negotiation, but they completely misunderstand China," Nikahkhtah said, "this time, China will not compromise under threats. Moreover, watching the U.S. market fall, China will see that the U.S. is kicking itself."
Original: www.toutiao.com/article/1845835460740107/
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