The meetings have concluded between the American and Chinese trade delegations this Sunday evening in Kuala Lumpur, Malaysia and yes, it does look like another Taco Bell Sunday. The appearance of US Treasury Secretary Scott Bessent claiming another trade victory on ABC’s Sunday morning news program notwithstanding, there’s an underlying reality which will not be reported in the western media.
For a prime example of this, the American and European financial media report this with their own typical pump the markets twist:
The headline and story that takes the cake however is from Bloomberg which has being converted into a bull market media outlet with some absolutely incredulous headlines and stories recently:
Now let’s get the Chinese version as that truly is the only one that matters and dissect what has actually occurred overseas, via Xinhua:
China, U.S. reach basic consensuses on arrangements to address respective trade concerns
This does not sound like a broad, sweeping trade deal to this author. But let us dig deeper into the article itself and what was actually said as this is reflective more of President Xi and the CCP’s interpretation.
The essence of China-U.S. economic and trade relations is mutual benefit and win-win results, and the two countries gain from cooperation and lose from confrontation, Chinese Vice Premier He Lifeng said after meeting in Kuala Lumpur from Saturday to Sunday with U.S. Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer.
This generic statement sums up the reality of what really happened. More from Xinhua:
Guided by the important consensuses reached by the two heads of state in their phone conversations since the beginning of this year, the two sides had candid, in-depth and constructive exchanges of views on important trade and economic issues of mutual concerns, including the U.S. Section 301 measures on China’s maritime, logistics and shipbuilding sectors, extension of the suspension of reciprocal tariffs, fentanyl-related tariff and law enforcement cooperation, trade in agricultural products, and export controls.
Cutting through the diplomatic speak, no real agreement has been reached beyond continuing to speak. Need more proof? The final sentence in the Xinhua story, which might as well have been a statement from the Chinese Communist Party, sums it up:
Both sides agreed that, under the strategic guidance of the two heads of state, they will make full use of the China-U.S. economic and trade consultation mechanism, maintain close communication on respective concerns in the economic and trade fields, and promote the healthy, stable and sustainable development of economic and trade relations to benefit the two peoples and contribute to global prosperity.
In summation, there was a meeting, they agreed to another 90 day extension and the discussions about the truly tough subjects and China will probably make a token purchase of soybeans with “promises” to purchase more in the future. Nothing concrete was actually accomplished other than China retaining control of the flow of rare earth minerals both raw and processed and the US maintaining existing tariff levels versus the punitive threats from the administration.
As the American financial media propaganda machine cranks up into the futures opening this Sunday night, the statements alone should be worth another 20 or 30 S&P points in a shallow rally offering foreigners and insiders a chance to distribute their holdings to the retail bagholders heading into next week.
As Yogi Berra might have said, the status quo is the same thing.