Trump Folds: Offers To Cancel New China Tariffs, Will Cut Existing Tariffs By 50% In Exchange For Pledges

And just like that, confirming weeks of media speculation, Trump has folded with the Dow Jones/WSJ reporting that not only will Trump not impose the new tariffs set to come into effect on Dec 15, but will cut existing tariffs by up to 50%.

• U.S. Negotiators Offer to Cut Existing Tariff Rates by up to 50% on $360 Billion of Chinese Imports – Sources
• U.S. Negotiators Also Offer to Cancel New China Tariffs Set to Take Effect on Dec. 15 – sources
• U.S. Tariff Offer Made in Recent Days as Both Sides Seek Trade Deal – Sources
• President Trump will Hold Meeting Thursday to Discuss China Trade – Sources

So what does Trump get in return for folding like a cheap chair? Why pledges to buy more agri products, pledges which apparently are not even enforceable as they are merely “firm commitments”, in other words taking China for its word:

• U.S. Asking China For Firm Commitments on Increased U.S. Products – Sources
• U.S. Would Reimpose Original Tariff Level if China Fails to Carry Out Pledges

In continuation of the move launched by Trump’s earlier tweet, stocks have extended their record breaking surge, with the Dow and S&P both now up nearly 1%.

30Y yields are surging, making lives for GSIB facing high year end scores even worse…

…. and the Yuan is soaring by 9 big handles, with the USDCNH down to 6.97.

Just one last thing before everyone gets carried away…

“China talks are going very well” – Trump, 12/7/18

“We’re getting into the final laps” – Mnuchin, 4/29/19

“We are coming down to the short strokes” – Kudlow, 11/15/19

“Getting VERY close to a BIG DEAL” – Trump, 12/12/19

— Carl Quintanilla (@carlquintanilla) December 12, 2019

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