If you take and take and take and take, when you simply stop taking it's a big win.
That's the stage I think these trade talks have gotten to.
In the last couple of months President Trump has:
1. Added multiple schedules of tariffs with hikes becoming seemingly ineluctable
2. Put restrictions on visas for anyone connected with repression
3. Stopped key parts from going to one of the world's largest telecommunications companies to make it so 5G leadership is lost
4. Put incredibly onerous sanctions on Cosco, their largest shipping company
5. Encouraged American companies to no longer build or manufacture anything new in China
6. Forced our companies to switch supply chains out of China as fast as possible or face tariffs that they can't pass on to consumers
7. Hinted about the possibility of capital constraints and blocking new IPOs here from Chinese companies, in part because they have been ruinous to investors
It's been an endless assault. On top of that comes the dramatic face-losing weekly confrontation with freedom-seekers in Hong Kong, something that the Communist Party seemingly doesn't know how to handle. Right now no large European company has joined "the fight" against China, in part because most of the European leaders prefer President Xi to Trump, but also because they do much too much business with China to risk joining Trump.
If the Party takes strong action to quell the dissent, though, it is possible that the Europeans may be a little less craven. That's why every weekend the Communist Party seems to weaken its resolve. If it goes all-in to stop the protestors, then the United States will most certainly encourage the protestors, something that hasn't happened yet.
In other words, hate him or like him, it's becoming clear that Trump has a kind of Dr. Strangelove upper hand where the Party seems totally befuddled. Unlike, say, NBA owners, Trump doesn't really care about opening new Chinese markets to capitalist entities based here.
What does it all mean for the market?
I think it means that the president can win some sort of concessions from the Chinese simply by NOT raising tariffs any more than they are.
I urge you to think of the issue like this: If I had told you that tariffs could ever get to 25% against the Chinese, you would be astonished that they could be that high and we didn't have roaring inflation and a recession.
Now all Trump has to do is say "we won't take them up again" in response to anything positive the Chinese give him and he can parade it as a win.
Alternatively, he can allow the tariffs to go up to 30% next week.
That's a win.
Either way Trump wins. Either way China loses.
That's exactly how he has always wanted it.
And, again, hate him or like him, that's where we are.