China Strikes Back
Donald L. Luskin
Monday, June 1, 2020
Trump’s Hong Kong response was refreshingly weak, and China will make it even weaker.
US Macro
Asia Macro
As we predicted, Trump’s policy initiatives Friday to punish China for imposing a “security law” on Hong Kong were vague, weak and deferred. Behind China in conquering Covid-2019 and reopening its economy, the US is still fragile, and Trump doesn’t dare reignite the US-China trade war. China knows this, and has announced suspension of some soybean purchases as a shot across the bow designed to weaken Trump’s policy initiatives as their details are formed. Trump’s announcement Friday was brimming with the usual China-bashing bluster, and China paid him back over the weekend by trolling him for the US urban riots. This bluster is welcome, because the tougher they talk, the less tough they need to act.