Exciting news: “Getting VERY close to a BIG DEAL with China,” President Trump tweeted on Dec. 12. “They want it, and so do we!”
Except that trade talks are always going well, according to Trump—even when they’re going terribly.
A Yahoo Finance tally of Trump statements on China this year shows a consistent, though perhaps unsurprising, pattern of exaggeration and outright fabrication. Trump has claimed a trade deal with China is imminent at least 38 times this year, starting in January. He has said talks are going “well” at least 91 times. And he has expressed optimism about trade talks roughly 150 times this year.
Meanwhile, the U.S. trade war with China has only escalated—the opposite of what Trump has been predicting. The trade war began in 2018, with Trump imposing new tariffs on about $250 billion worth of Chinese imports, while demanding a long list of economic reforms as a condition of repealing the tariffs. There have been more than a dozen rounds of negotiations between U.S. and Chinese officials. But the only tangible outcome so far has been an escalation of punitive measures, on both sides.
On May 10 of this year, after talks broke down, Trump raised the tariff on $200 billion worth of Chinese imports he first tariffed in 2018, from 10% to 25%.
A much-hyped meeting with President Xi of China in late June produced no breakthroughs, so Trump imposed new tariffs on $112 billion worth of Chinese imports on Sept. 1. Tariffs on another $160 billion worth of Chinese imports are due to go into effect on Dec. 15, unless Trump delays them. If those tariffs do arrive, Trump will have raised tariffs on nearly all Chinese imports.
Yahoo Finance’s Ben Werschkul and Sarah Paynter tallied Trump’s statements on China by scouring transcripts of Trump’s briefings, interviews and public rallies, along with his Twitter feed, for all of 2019. They searched for specific characterizations of the trade talks, such as “going well” or “nicely,” to count up specific references of generalized optimism about negotiations. If Trump made several optimistic statements in one set of remarks, they counted that just once.
A few samples of Trump’s upbeat China remarks:
January 31: “It will be, by far, if it happens, the biggest deal ever made—not only the biggest trade deal ever made. It will be the biggest trade deal by far, but it’ll also be the biggest deal ever made.”
May 2: “We are very close to a deal with China.”
June 6: “I'll definitely get a deal with China. They want to make a deal now.”
August 26: “I think we’re going to have a deal because now we’re dealing on proper terms.”
On October 11, Trump announced he had struck a “phase one” trade deal with China, saying, “I just made a great China deal today.” Except the two sides hadn’t worked out the final terms. Two months later, they still haven’t worked out final terms, and there is, in fact, no phase one trade deal.
Trump’s blustery style and dishonesty are well understood, yet his statements on China still move markets. The S&P 500 jumped nearly a full percentage point on Dec. 12, in the minutes after Trump tweeted about the BIG DEAL with China that was VERY close. If the pattern holds, markets will end up disappointed, as no deal materializes. But there will always be another happy prediction.
Rick Newman is the author of four books, including “Rebounders: How Winners Pivot from Setback to Success.” Follow him on Twitter: @rickjnewman. Confidential tip line: firstname.lastname@example.org. Encrypted communication available. Click here to get Rick’s stories by email.