U.S. Relations With China Are Sinking; Trump Defeat in Georgia Tonight is Nearly Certain
Author: Greg Valliere
May 24, 2022
WE’LL FOCUS THIS MORNING on the latter two issues, since Biden gaffes — ignoring his own staff — are old hat.
AN OPPORTUNITY LOST ON TRADE: Biden’s trip to Asia ostensibly was designed to improve trade policy in the region, but the flap over his confusion on Taiwan hasn’t helped. Biden will spend much of today with trade allies who are asking: if Taiwan is so important, why hasn’t the island nation been included in a sweeping new trade pact?
THE BIGGEST UNKNOWN ON TRADE is whether Biden will ease up on the Trump-era tariffs, which are opposed by most U.S. companies (but supported by organized labor). It appears unlikely that this issue will be resolved soon; Biden’s political aides fear that a trade liberalization with Beijing ahead of this November’s election could expose the president to charges that he’s “soft on China.”
A TOUGHER CHINA POLICY in general seems to be the takeaway from the Biden visit. Beijing is “flirting with danger,” Biden said, implying a Ukraine-type backlash if China threatens Taiwan. The implied military threat prompted an angry verbal backlash in China.
IF BIDEN IS REALLY PREPAED TO TOUGHEN CHINA POLICY, he needs to beef up U.S. defense spending. A Wall Street Journal editorial points out this morning that Biden sets the Navy on a path to shrink to 280 ships in 2027 from 298 today — as China greatly expands its fleet. A credible defense of Taiwan and U.S. allies in Asia is going to require a much bigger military budget.
* * * * *
DONALD TRUMP’S ABILITY to call the shots in state primaries is likely to hit a brick wall tonight in Georgia. The former president is still furious over his 2020 loss in the presidential election there, and is on a well-publicized “vendetta” crusade to defeat officials who won’t agree that the election was fixed.
THE TRUMP-BACKED CANDIDATE for governor, David Perdue, is trailing by about 30 points against incumbent Gov. Brian Kemp, and other Trump-backed candidates are in tough races. Republican voters increasingly support a theme that elections should be about the future, not re-litigating the 2020 election — and that sends a warning to Trump.
THIS BRINGS US TO MIKE PENCE: The former Vice President, clearly running for president, is dropping the subtlety in his attacks on Trump. Pence spoke at a rally for Kemp yesterday, declaring that the election is “about the future,” an implicit shot at Trump. Kemp is narrowly favored to beat Stacey Abrams in November; she didn’t help her cause this week by declaring Georgia is the “worst state in the country to live.”
WE’LL SEE TOMORROW MORNING how badly the Trump brand was damaged in today’s elections. He’s still enormously powerful in the party, but the grass roots buzz increasingly is about Florida Gov. Ron DeSantis, who’s just as conservative as Trump — but with a less toxic personality than Trump.
The views expressed in this blog are provided as a general source of information based on information available as of the date of publication and should not be considered as personal investment advice or an offer or solicitation to buy and/or sell securities. Speculation or stated believes about future events, such as market or economic conditions, company or security performance, or other projections represent the beliefs of the author and do not necessarily represent the view of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies. Every effort has been made to ensure accuracy in these commentaries at the time of publication; however, accuracy cannot be guaranteed. Market conditions may change and AGF accepts no responsibility for individual investment decisions arising from the use of or reliance on the information contained herein. Any financial projections are based on the opinions of the author and should not be considered as a forecast. The forward looking statements and opinions may be affected by changing economic circumstances and are subject to a number of uncertainties that may cause actual results to differ materially from those contemplated in the forward looking statements. The information contained in this commentary is designed to provide you with general information related to the political and economic environment in the United States. It is not intended to be comprehensive investment advice applicable to the circumstances of the individual.
AGF Investments is a group of wholly owned subsidiaries of AGF Management Limited, a Canadian reporting issuer. The subsidiaries included in AGF Investments are AGF Investments Inc. (AGFI), AGF Investments America Inc. (AGFA), AGF Investments LLC (AGFUS) and AGF International Advisors Company Limited (AGFIA). AGFA and AGFUS are registered advisors in the U.S. AGFI is a registered as a portfolio manager across Canadian securities commissions. AGFIA is regulated by the Central Bank of Ireland and registered with the Australian Securities & Investments Commission. The subsidiaries that form AGF Investments manage a variety of mandates comprised of equity, fixed income and balanced assets.
About AGF Management Limited
Founded in 1957, AGF Management Limited (AGF) is an independent and globally diverse asset management firm. AGF brings a disciplined approach to delivering excellence in investment management through its fundamental, quantitative, alternative and high-net-worth businesses focused on providing an exceptional client experience. AGF’s suite of investment solutions extends globally to a wide range of clients, from financial advisors and individual investors to institutional investors including pension plans, corporate plans, sovereign wealth funds and endowments and foundations.
For further information, please visit AGF.com.
©2023 AGF Management Limited. All rights reserved.
