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TRUMP’S BIG MOMENT IN BUENOS AIRES — I write here about the pivotal moment that awaits President Trump when he sits down on Saturday with Chinese President Xi Jinping as the nation’s two largest economies stand on the brink of a full-scale trade war.
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The high-stakes meeting comes as Trump’s trade battles are already slamming parts of the American economy, especially in Midwestern and farm belt states that helped propel him into the White House. Automakers like GM are cutting jobs, closing plants and complaining about billions in tariff-related costs. Soybean crops are rotting in fields with China’s market now closed.
Dairy farmers hit by retaliatory are selling family businesses. And a growing list of blue chip American companies from Whirlpool to Caterpillar and Stanley Black & Decker Inc. have cited higher prices generated by Trump’s tariffs. Economists are warning that a full-scale trade war with the world’s second largest economy could tip markets into panic mode which could sap business and consumer confidence and further weaken the U.S. economy, presenting an existential risk to Trump’s re-election chances.
Allianz’s Mohamed A. El-Erian told me: “A disaster meeting in Buenos Aires would be a complete break down in negotiations and that would result in big market losses. … Tariffs are ‘stagflationary,’ that’s why economists warn about them all the time. They lower growth and they raise inflation.”
REAGAN MOMENT? — But El-Erian and others noted that Trump also has an opportunity for a “Reagan moment” in facing down the Chinese and