- Trump has said that it does not matter if he meets his Chinese counterpart Xi at the G20.
- The president's about-turn came after around 640 retailers led by Walmart warned about tariffs' economic damage.
- A defusion of trade tensions may push stocks higher and the USD lower.
US President Donald Trump has said on Friday that it does not matter if Chinese President Xi Jinping comes to the G20 meeting in Japan at the end of the month. The president and his advisor Larry Kudlow have previously threatened to slap tariffs on China – "immediately" – if the meeting is not held.
The 180-degree shift by the president represents a softer approach despite adding that China will eventually make a deal and that it is manipulating its currency.
The president's comments in an interview with Fox News came less than a day after a significant domestic pushback against his tariffs. A group of no less than 500 companies and 140 groups representing retailers, energy firms, and manufacturers sent a letter to Trump warning him that the escalation in the tit-for-tat tariffs has a negative long-term impact on American farmers, families, and businesses.
The umbrella group – "Tariffs Hurt the Heartland" has commissioned reports that calculate the ongoing damage of duties to Americans. Wal-mart, Target, and Macy's are the most prominent members.
IS Trump's climbdown on a meeting with Xi related to the pressure from Wal-mart? The Trump administration – like its predecessors – is not immune to pressure from business interests.
If Trump's latest remarks represent a detente in trade wars, stock markets – which Trump cares about – have room to rise. In currencies, the Japanese yen and the US dollar are both safe-haven currencies that may fall. The biggest beneficiaries may be commodity currencies such as the Australian and Canadian dollars. The euro and the pound may also gain.
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