One country's unemployment rate is at 4.9% headed toward 5%. Another country's unemployment rate is at 4% flirting with 3%. One country's economy slows to lowest growth rate in 28 years. Another country has the lowest unemployment claims in 40 years. One country's stock market is thought to being kept above 2500 by government buying. Another country's stock market is soaring again after a short dip downward.
One country seems genuinely worried about furloughed workers and what it means for them and the country's strength. The other country's spokesperson wants to know what all the bellyaching is about by the furloughed workers and why don't' they just get a loan rather than going to a food bank. One country seems to be worried about its companies' profits. The other seems oblivious to their entreaties.
And you wonder why I think the Chinese have more to lose by not giving in on intellectual theft and a terrible trade imbalance than the other?
All through this debate about the trade war I have had to listen to mainstream media lecture us about how the Chinese are all powerful and how we are a pitiful helpless giant when it comes to these trade talks.
I come back and say if there were ever a time to get the Chinese to play fair, it is now -- when we have a shrinking pool of workers and far more jobs wanted than we can fill and they have too many mouths to feed. Sure, our government owes too much, but does anyone dispute that their banks are all teetering while ours are the world's most solvent?
Has it hurt our companies that they have had to pay tariffs on Chinese goods? Not that anyone can tell. No company that has reported so far this earnings period has said it's an issue right now, although some are concerned about the 10% going to 25%.
More importantly, we have a president who doesn't seem to care about the profits some American companies may suffer from this trade war -- including one of our largest companies, Apple (AAPL) -- a change from what you would expect from a Republican administration. Nor is the president a globalist -- like his predecessor, who almost seems to want a lesser-developed country's workers to do better to create a better worldwide employment situation even if it means sacrificing the future of some of our blue collar -- not white collar -- but blue collar workers here.
In short, the Chinese are coming to this table and while as Wilbur "let them eat loans" Ross said, we might be miles and miles away from an agreement, that's still one more concern for what could turn out to be a teetering Chinese economy. Remember, I have only had ONE company come on Mad Money and say, given enough time, it would have no problem switching sources to another country besides China -- and that's RH (RH) , with a clientele that can afford to pay more if the tariffs go higher. All the others are almost proud about how they multi-source, which his really bad for China. And, yes, Apple's profits will be hurt if China shuts the U.S. down, and it does seem that Starbucks (SBUX) is not having the success it once had in China, but I do believe that neither Starbucks nor Apple has much pull with this White House.
In short, despite the protestations of the intelligentsia, the pitiful helpless giant has the cards -- and with a president just crazy enough to play them. This is why there should be a little more hope than people realize that China will drop its allegedly principled stand that it has a right to joint ventures that steal our technology in return for sales to a country with a lot of consumers. Oh, and the all powerful president for life Xi Jinping? Isn't that what all the Communist leaders have called themselves? And how's that been historically? Yeah, exactly.