Fail in Hanoi, Win in Beijing

Media stories Sunday claim a US/China trade deal is imminent, that its terms will not be especially favorable to the US, and that it will face stiff resistance at home in both nations. If a deal is any more imminent than before, it is because Trump escaped a Chinese diplomatic trap in Hanoi, by walking away from negotiations with Kim. Such resolve suggests China would have to make more concessions to get a deal, not fewer. Xi faces no public nor hierarchical resistance to a deal, because the Communist Party has no choice but to make one. Because a deal would be a settlement of a Section 301 action, Trump does not need Congressional approval -- and he needn’t worry about public opinion, because he will be vilified anyway no matter what the deal looks like. China has the most to gain in a post-deal relief rally, and long-term by becoming less protectionist. Short term, a deal will lift confidence globally, and long-term even an imperfect deal will lift global growth.