The Farce Of The Deal: Terms Of 'Phase One' Trade Deal Will "Never Be Made Public"; There Will Be No Signing Ceremony
There was much rejoicing and buying of stocks when Trump tweeted, to much fanfare and bombast early this morning, that he is "Getting VERY close to a BIG DEAL with China. They want it, and so do we!." Sure enough, just a few hours later, there was a deal. Or was there? Because whereas we now know that the US & China have agreed to a Phase One deal on Paper, and Trump signed off on it… nobody will ever know what's in the actual deal, even once we pass it!
Here's what we do know: according to Fox Business correspondent Edwards Lawrence, China "verbally agreed to buy $50b in agriculture, but that will not be in writing." In fact it appears that nothing will be.
Also, the deal supposedly includes intellectual property protections, something the US has been asking for as a core demand.
Needless to say, a Chinese IP concession will most certainly not be in writing too.
Other parts of the deal include "increased access to the financial services market. There is language where the Chinese agree not to manipulate their currency. There is enforcement written into the agreement. Dec 15th tariffs do not go forward."
Perhaps most important for traders is that this is the end of the overnight "trade deal optimism" rally: phase two of the trade deal will "begin after 2020 elections." Which means a whole year without Trump tweets that a deal is very close and that China is dying to do it.
Yet for all of the above, here's the most mindboggling part. Lawrence said that the Chinese have requested that the language of the trade deal will never be made public.
That's right - there is (supposedly) a "deal", written on paper somewhere, specifying certain terms, and signed by certain US and Chinese presidents. And nobody will ever see what that deal actually states.
Effectively, the Phase One trade deal "could" be nothing more than a market manipulating blank piece of paper, and since China has only pledged to do something - which nobody will know as it is not written - and since China has not committed contractually in the court of public opinion, it will have absolutely no incentive to abide by the Phase One "deal>"
And just to confirm that it is all a farce, the source said there would be no signing event between President Trump and President Xi, confirming that a a probably never actually happened.
https://www.zerohedge.com/markets/art-secret-deal-terms-phase-1-deal-will-never-be-made-public