Dow futures fall after President Trump tweets ‘absolutely no need to rush’ on China trade deal

“Wall Street is set to open lower on Friday as President Donald Trump said there’s ‘absolutely no need to rush’ on a trade agreement with China and tariffs will make the United States ‘much stronger,'” CNBC reports. “Futures on the Dow Jones Industrial Average fell about 120 points Friday morning, implying a lower open of about 113 points. The S&P 500 and Nasdaq were also set to open lower.”
“Trump signaled in a Twitter post Friday morning he could stick with China tariffs for a long period of time,” CNBC reports. “The comments came after he slapped higher tariffs — from 10% to 25% — on $200 billion worth of Chinese goods.”
“There’s still hope that the U.S. and China could hatch a deal, however,” CNBC reports. “‘A ‘grace period’ was included on these tariff increases, so that goods currently in transit to the U.S. from China aren’t subject to the new 25% tariffs, just the old 10% tariff,’ Tom Essaye, founder of Sevens Report, said in a note on Friday. ‘That grace period was not included in previous rounds of tariffs and is likely an olive branch of sorts to the Chinese side. Given shipping times, goods sent from China today will take two weeks or so to reach the U.S., so if a trade deal is stuck in that time frame, the pain of the 25% tariffs will never be felt,’ he added.”

Talks with China continue in a very congenial manner – there is absolutely no need to rush – as Tariffs are NOW being paid to the United States by China of 25% on 250 Billion Dollars worth of goods & products. These massive payments go directly to the Treasury of the U.S….
— Donald J. Trump (@realDonaldTrump) May 10, 2019

Tariffs will make our Country MUCH STRONGER, not weaker. Just sit back and watch! In the meantime, China should not renegotiate deals with the U.S. at the last minute. This is not the Obama Administration, or the Administration of Sleepy Joe, who let China get away with “murder!”
— Donald J. Trump (@realDonaldTrump) May 10, 2019

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MacDailyNews Take: Again, as we’ve said throughout: No pain, no gain. Short-term pain leads to longterm gain.
We continue to expect the two sides to reach a trade deal eventually, but this is unlikely to happen in the short term as the war is not painful enough for either side. — Zhiwei Zhang, Deutsche Bank’s chief Asia economist, in a note to clients on Friday
I’m cognizant that in both the U.S. and China, there have been cases where everyone hasn’t benefited, where the benefit hasn’t been balanced. My belief is that one plus one equals three. The pie gets larger, working together. — Apple CEO Tim Cook, March 24, 2018

The United States is insisting that all countries that have placed artificial Trade Barriers and Tariffs on goods going into their country, remove those Barriers & Tariffs or be met with more than Reciprocity by the U.S.A. Trade must be fair and no longer a one way street!
— Donald J. Trump (@realDonaldTrump) June 24, 2018

At least half of the popular fallacies about economics come from assuming that economic activity is a zero-sum game, in which what is gained by someone is lost by someone else. But transactions would not continue unless both sides gained, whether in international trade, employment, or renting an apartment. — Thomas Sowell, June 14, 2006
SEE ALSO:
China overplayed its hand with U.S. President Trump on trade, and it could cost them dearly – May 9, 2019
Apple CEO Tim Cook optimistic about U.S.-China trade talks – February 12, 2019
President Trump says U.S. doing well in trade negotiations with China – January 23, 2019
China’s 2018 growth slows to 28-year low, more stimulus seen – January 22, 2019
Apple CEO Tim Cook: I’m very optimistic about U.S.-China trade talks – January 8, 2019
Advisor to President Trump: Apple’s sales should pick up when U.S.-China strike trade deal – January 3, 2019