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Will China Tariffs Sink the Stock Market?

You are overreacting. These deals always get done. That is what the critics would say. That is all you hear at CNBC. The answer to the title of this piece is yes. If a deal doesn't get done this weekend it will sink the markets more than likely. Wall Street acts as if they have seen this play before. Politics always gets resolved. Always?


Just this morning, Trump sent out a tweet stating that the Chinese are coming to town this week "to get a deal done." This wouldn't be the first time or the last time that President Trump attempts to spin the optics. 


This is what I think Wall Street might be missing.  


Just go to www.scmp.com which is the South China Morning Post website. There you get the reality at what is at stake. By the way, you won't find any of this on CNBC's website.


"Although Beijing will still send its chief negotiator, Vice-Premier Liu He, to Washington on Thursday and Friday for talks, the way forward is shrouded in uncertainty, with Chinese state media reporting that Beijing will not respond to Trump’s threats with more concessions."


"Chinese party heading to Washington for talks but state media reports that Beijing is unwilling to back down in the face of the US president’s threat."


The Chinese also believe that trade war would effect the US economy more than the Chinese economy. They also fully believe that even with a trade war they would still achieve their economic growth numbers. They have time to let this play out. President Trump on the other hand is staring at an election cycle and is probably in a hurry to get something done.  So, get your popcorn out. This should get interesting.


I think his ability to pull this off should be one of the defining moments of his office. The reality is that there is no President who has had the courage to take something like this on.  Just remember, boom or bust - that is how he rolls. Lets just hope it is boom.