On the eve of G20 global economic talks in Argentina, the dominant question for both Wall Street and Main Street is: When it comes to trade, can the U.S. and China get along? A lot rides on the answer.
In a new IBD/TIPP poll of 900 adults — conducted last week before President Trump and Chinese President Xi Jinping were scheduled to meet about trade and other issues — Americans were largely optimistic that a deal to ease trade tensions between the two countries could be reached "in the near future." Of those queried, 64% said it was "very" or "somewhat" likely that the U.S. and China would soon strike a trade deal. Just 31% said it was "not very" or "not at all" likely. That leaves ample room for disappointment.
With a new round of U.S. tariffs on China scheduled to go into effect by the end of December, the stakes are high. And yet, despite that, Americans are somewhat ambivalent about the trade dispute so far.
The IBD/TIPP Poll asked Americans whether "any potential negative impact on the U.S. economy due to the ongoing trade dispute with China will be offset by tariffs, which will protect U.S. jobs and make trade more fair for the U.S."
On this, Americans split right down the middle. Of those answering, 46% agree that tariffs would help protect the U.S. economy from the negative fallout of the U.S.-China trade dispute by saving jobs and making trade more fair for the U.S. But an equal 46% disagreed, while 6% said they were "not sure."
Markets Want U.S.-China Deal
As IBD has noted elsewhere, a trade deal between China and the U.S. is a big deal for Wall Street. Many, if not most, of the market's recent stumbles can be traced to the ups-and-downs of the U.S.-China trade dispute. And yet, Americans seem ambivalent at best.
And it's not out of the question that a deal can be reached. As IBD's Jed Graham noted Friday, "the sides were pretty close to a deal in May, when China reportedly offered to buy $70 billion worth of American goods over a couple of years to modestly narrow the U.S. trade deficit." With the president facing greater political pressure and a new Congress coming in, Trump might feel the need to show some flexibility on trade — especially with the possibility of future Fed rate hikes looming.
A trade war and tariffs serve no one's long-term interests. Tariffs are taxes on consumers. Period. And trade wars shrink global markets, and thus potential economic growth. Neither of those things is good. Let's all hope that both Ji and Trump are tired of battling over trade and that a reasonable, fair deal can be concluded. Good for us, good for China, good for the world.
Please click here to read the original article on the Investor's Business Daily website.