Peter Navarro, Mr. Trump’s tariff henchman, told the press phase one is in the bag. Navarro said the chief negotiator for China, Liu He, plans to sign the deal, and President Xi will sign it in January when Trump puts on a victory performance for the press. Navarro also told the press the stock market will hit 32,000 in 2020, but Wall Street economists think Peter’s been drinking too much of Trump’s snake oil.
Several economists think the phase one deal is an attempt to keep the president’s voter base happy. China has a history of not following agreements. Buying $40 to $50 billion worth of farm products over the next two years may be hard to do since Chinese importers now have a relationship with farmers in Brazil, Mexico, and Argentina. The Chinese only bought $9 billion worth of soybeans from U.S. farmers in 2019.
The tech part of the trade war will continue in 2020. Mr. Trump wants to destroy China’s quest to dominate the global 5G business. Trump’s plan includes ruining Huawei’s reputation around the world. But Huawei just released its 2019 financial numbers, and the company had an 18 percent jump in revenue despite Trump’s plan.
Huawei’s new Pro 30 series and the upcoming Pro 40 series of smartphones with China’s Harmony operating system will give Samsung executives a few sleepless nights. Huawei is the number two smartphone vendor in the world. If the demand for Huawei’s new smartphones continues, Samsung might lose its top spot in the smartphone world.
The International Monetary Fund’s new report claims global GDP growth continues to erode thanks to the Brexit situation and the China-U.S. trade war. China’s economic growth in 2019 was 6.0 percent. That amount of growth should hold in 2020 thanks to the People’s Bank of China injecting subsidies in all sectors of the Chinese economy.
Economic growth in the U.S. hit 2.1 percent in 2019, according to the Commerce Department. But the 2020 GDP growth projection is only 1.9 percent, according to the IMF report. U.S. manufacturing orders are in the toilet and consumer confidence continues to erode.
Consumer spending accounts for 70 percent of Gross Domestic Product growth. Consumers stopped buying big-ticket items in November, and holiday retail sales didn’t hit projections. Most consumers know the uncertainty and the chaos that exists in the Trump White House will only exacerbate their economic concerns in 2020.