To: locogringo who wrote (1125942 ) 3/22/2019 12:15:33 PM From: sylvester80 Respond to of 1571040 tRump LOSER: Why A Big China Trade Win Is Slipping Out Of Trump's Grasp; Dow Jones Falls JED GRAHAM 3/20/2019investors.com The steady stream of stock-market friendly China trade deal headlines has dried up, and President Trump said Wednesday that tariffs could remain in place for a long time, sending the Dow Jones lower. New talks to seal a deal are set for next week in China and the following week in D.C. But don't count on a breakthrough. All of the recent indications about the scope and timing of a deal have been negative. The stock market closed mixed Wednesday with the Dow Jones Industrial Average falling 0.55%, the S&P 500 down 0.3% and the Nasdaq composite rising less than 0.1%. Wednesday's sell-off adds to negative sentiment on a China trade deal. On Tuesday, Bloomberg reported that Beijing is walking back some of its trade offers. News reports that the next rounds of trade talks hope to finalize a deal in April offered bulls some support. How Trump Lost China Trade Deal MojoWhile a China trade deal is still likely, it's looking like a bit less of a sure thing. Three things have happened to reduce Trump's leverage over Beijing, which feels less pressure to bend to U.S. demands. First, Trump took the threat of escalating tariffs off the table to help boost the Dow Jones and broader stock market. Second, government stimulus helped China's stock market bounce back in a big way. Third, the U.S. effort to get allies to ban gear from Huawei, the Chinese communications equipment giant, is falling flat. Britain, Germany, India and the United Arab Emirates have signaled an openness to Huawei gear in 5G networks. Trump was expected to sign an executive order banning Huawei from U.S. 5G networks, but that may have become a chip in trade talks. IBD NewslettersGet exclusive IBD analysis and action news daily. SIGN UP NOW! China Trade Deal CounterattackNow that Trump's leverage is fading, China has been pushing back. The South China Morning Post reported that Chinese President Xi Jinping is unwilling to accept a trade deal with a one-sided enforcement clause . The U.S. wants Trump tariffs to spring back to life if China doesn't live up to commitments. Alternatively, the U.S. has discussed leaving some tariffs in place, phasing them out as China complies with the deal's terms. Both of those approaches look like non-starters. Beijing is insisting on trade deal enforcement that is "two-way, fair and equal." With this big hurdle to clear, the timing of a deal-signing summit keeps slipping. After racing to get a deal signed by early March, Trump has pushed the timing to at least late April. "Probably one way or the other, we're going to know over the next three to four weeks," he said last week. Now Beijing reportedly doesn't expect a summit before June. China Trade Deal May Leave Out BoeingMeanwhile, the scope of Chinese purchases to narrow its $323 billion annual trade surplus with the U.S. seems to be shrinking. Beijing had pledged to buy an extra $1.2 trillion in U.S. goods over six years, potentially wiping out the trade gap by 2024. U.S. trade negotiators have viewed the offer with skepticism, but doubts may be growing. The deal would include an extra $200 billion in semiconductor purchases. Yet chipmakers have reportedly asked the White House to leave them out of the equation. They believe that Beijing will require them to move chip-testing and finishing facilities to China from places like Vietnam. U.S. exports to China would rise, but overall U.S. exports globally wouldn't. So there's no upside for the U.S. economy, and that would be a negative for chipmakers, who would have to boost capital spending and perhaps wages to meet Chinese government demands. Further clouding the outlook, China reportedly wants to drop the Boeing ( BA ) 737 Max jet from its list of purchases. That follows the grounding of the aircraft in the wake of the Ethiopian Airlines crash . There's still a chance this could change, if the summit is pushed back long enough for the aircraft to satisfy Beijing's safety concerns. Could Deal To Boost Dow Jones Hurt Trump?Trump's global auto tariffs could pose another hurdle to a deal. In July, Trump imposed 25% tariffs on Chinese auto imports. It's hard to see Trump reversing that while continuing to threaten auto tariffs on imports from Europe and Japan. Trump's latest outburst against General Motors ( GM ) and the United Auto Workers union tied to a plant closure in Ohio show how sensitive he is about his perceived impact on the U.S. auto sector. It's not clear how Trump's political needs can be met if China is holding out for a deal that removes all tariffs. So what happens now? Trump would face political blowback for a China trade deal that soft-peddles enforcement, goes easy on Huawei, and comes with just a moderate amount of Chinese purchases to shrink the trade gap. Trump could still bite the bullet and accept a more China-friendly trade deal than he and his advisors want. That would be positive for the Dow Jones. But negotiations may drag on, extending uncertainty, and that delays an economic acceleration out of a global soft patch.