As mentioned in my frequent comments in my Diary over the last six months, I have strongly believed that the president's deal with China was virtually "dead at birth."
Despite suggestions otherwise - on Real Money Pro and elsewhere - it was never likely that tariff pressures were ever going to force China to succumb and altar deep rooted policy and the country's "evolution" and planned economic growth strategies.
As written previously, President Trump constructs hastily crafted policy (on the back of a napkin) and delivers through the timeframe of a tweet - while China thinks in terms of decades and even a century.
The president characteristically believes that the power of his personal relationships will serve as a successful catalyst to deal making around the world.
Unfortunately, (many investors/traders and) he may now be learning that complex policy issues are far different than conducting a New York City real estate deal.
Trump's approach failed to comprehend the magnitude of the tough structural issues (that were never going to be resolved with China) and, instead, leaned on a focus of the bilateral trade deficit.
Technology transfer, state sponsored industrial policy, cyber issues and intellectual property theft were likely never on the table of serious negotiation from China's standpoint and despite Trump's protestations that discussions were going well.
As I have suggested for months, the unilateral imposition of tariffs will cause more economic disruption than the Administration recognizes (in our flat and interconnected economic world):
* China's role in world trade is important - the country is the third largest exporter in the world.
* Specifically, China is a prime source of cheap, imported goods for American consumers.
* China is the largest owner of U.S. debt.
Last night at a political rally in the Panhandle of Florida the president said that "we don't have to do business" with China.
Trump's statement is short sighted and Friday's trade negotiations outcome is not likely to be a market friendly development.