Chief economist update: Foolish takeaway on US-China talks

"There's an old saying in Tennessee - I know it's in Texas, probably in Tennessee - that says, fool me once, shame on -- shame on you. Fool me -- you can't get fooled again."
- former US President George W. Bush, Nashville, Tenn., 17 September 2002.

Yes Virginia, it was the stuff that brought "Bushism" into our collective consciousness.

Of course, we all know what George W. was on about - "Fool me once, shame on you. Fool me twice, shame on me."

Most equity markets around the world rebounded following news that the trade talks between the US and China - though it won't be happening this month as expected - will happen in October.

Bloomberg reports: "Chinese Vice Premier Liu He agreed to a visit in "early October" during a telephone call on Thursday morning Beijing time with U.S. Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer, according to a statement from China's Ministry of Commerce. A cautious statement from the USTR's office confirmed that ministerial-level discussions will take place in "the coming weeks," without specifying when."

The whole universe is, in the lyrics of Dusty Springfield, "wishin' and hopin' and thinkin' and prayin'" that a deal would be done and the planet would revert to pre-Trump's tariffs and China's (and other US trading partners') retaliation.

But we've all seen this before. We've been fooled not just once, not just two or three but many times by talks that lead to expectations to a deal ... only to watch both the US and China up the ante on the trade war.

Here's a picture of the escalating US-China trade war from

Not included in the picture is the 15% tax imposed on more than US$100 billion of US imports of Chinese goods that came into effect on 1 September and Beijing's retaliation, applying 5%-25% on imports from the US.

Absent an October deal (a mammoth IF), BBC writes: "On 1 October, the US plans to raise an existing 25% tariff on some Chinese products to 30%."

"Washington then plans to deliver a wave of new tariffs on Chinese goods, ranging from footwear to telephones, on 15 December.

"China also plans to hit another 3,000 American products with tariffs by the end of the year."

While the latest developments in Sino-US talks is a source of optimism, like all talks (and optimism) before it, chances are the schedule October tete-a-tete would end the same way as its precedents.

For as Rudyard Kipling, in his Barrack-room ballads (1892): "East is East, and West is West, and never the twain shall meet."

Especially not when Trump and Xi are holding a contest on who can pee higher and farther.

Link to something bhTcelZz