Commercially, the Chinese and US will be going their separate ways. From Charles Hugh Smith at oftwominds.com:
Each party will continue to extract whatever benefits they can from the other, but the leaving is already well underway.
Beneath the euphoric hoopla of a trade deal with China is the cold reality that the divorce has already happened and any trade deal just signs the decree. The divorce of China and the U.S. was mutual; each had used up whatever benefits the tense marriage had offered, and each is looking forward to no longer being dependent on the other.
Any trade deal is like closing the barn door months after the horses left.Corporate America’s supply chains are already leaving China for lower cost, friendlier countries, and for its part China has already made its intentions to escape the grip of the U.S. dollar abundantly clear.
Indeed, China has clearly stated its plan to move up the value chain globally and rely more on its domestic consumers to fuel growth rather than exports, which have been weakening for some time (see chart below).
