Latest from South Asia Morning News/Politico Confirms our Thesis

Dear Subscriber,

Quick note: As EVERYONE at this point understands, POTUS Trump runs his government and negotiation strategy according to the programming rules of reality TV--create drama, keep them guessing, tease the next segment, threaten to break-up and leave-- for the biggest ratings.

So no surprise from this early reporting from South Asia out this morning.

Trade war: US and China agree to a tentative truce before G20 summit

• Fresh tariffs expected to be delayed, with two sides preparing separate statements

• Source says Donald Trump’s decision to delay additional tariffs was Xi Jinping’s price for holding this week’s meeting with him

The US and China have tentatively agreed to another truce in their trade war in order to resume talks aimed at resolving the dispute, sources familiar with the situation said.

Details of the agreement are being laid out in press releases in advance of the meeting between Chinese President Xi Jinping and US President Donald Trump at the Group of 20 summit in Osaka, Japan, this weekend, according to three sources – one in Beijing and two in Washington.

Such an agreement would avert the next round of tariffs on an
additional US$300 billion of Chinese imports, which if applied would extend punitive tariffs to virtually all the country’s shipments to the United States.

A senior Trump administration official told POLITICO earlier this week that it was possible that tariffs could be delayed but cautioned that “nothing is certain. Absolutely nothing.”

It is unclear whether Trump will give any sort of deadline for the talks to reach an agreement, as he had before. Two sources suggested a deadline of six months, which would put the deadline at the end of the year.

Since the trade war started nearly a year ago, Trump has imposed 25 percent tariffs on US$250 billion worth of Chinese goods.

A Washington-based source familiar with the talks said that there were “ongoing attempts to coordinate press messaging”, but added that there was no specificity yet regarding decisions on tariffs or timing within that messaging.

The person, speaking on condition of anonymity, said that both sides would be expected to release coordinated press releases following the summit as opposed to one joint statement."

Expect to see these "surprise" announcements late tonight/early AM.

Action to take:  Both sides will attempt to reset the trade war narrative. The negative economic numbers in both US and China are accelerating--2020 Election for POTUS Trump is 90% based on Economy--without an agreement by year end, 2020 is a recession for the United States.

KEY POINT: For a guy who measures his presidency by TV ratings and the Dow 30, we should expect "a terrific agreement" before Christmas is now our base case--BUY the THREATS. 

Newsletter Part 1 out tomorrow--Update on our First Half Returns and Dividends--new Targets--a few new sectors and stocks.

Toby