Syria Uproar Divides GOP, Obscures Modest Trade Deal
Author: Greg Valliere
October 14, 2019
THE USUAL TRUMP HYPERBOLE over a “tremendous” piecemeal trade deal began to fizzle even before the stock market closed on Friday. Three major take-aways:
First, The Oval Office announcement of a “phase one” trade deal was “contingent on it being written,” Trump said, with no apparent irony.
A big agriculture deal, long expected, will help the president in the Midwest, but there was less than met the eye — no lifting of sanctions that are already in place, and no agreement on big issues like technology transfers. An agreement in principle on intellectual property theft was vague, hardly an agreement in fact.
China trade hawks scoffed at the deal. Even if there’s a “phase one” agreement by winter, no one we talked with on Friday anticipates a “phase two” deal until well into 2020, if then.
Second, the tentative trade agreement was pushed to the back pages almost instantly as the worst crisis in Trump’s presidency gripped this city. A “who’s who” of Republicans blasted his abandonment of the Kurds and the message this sends to allies and adversaries.
Usually docile Republicans immediately demanded harsh sanctions on Turkey, which should win approval in Congress within a week. But the damage has been done; the Mideast has been re-arranged, with Turkey and Russia the big winners.
The political impact in Washington was clear — Republicans realized they could harshly criticize Trump with little blow-back. Even Lindsey Graham and Kevin McCarthy ripped the president. In private, the criticism was scathing from the Pentagon and demoralized troops in the field.
The GOP now faces an enormous rift, with foreign policy hawks pitted against isolationists like Trump, Sen. Rand Paul and commentator Tucker Carlson. Trump reads public opinion brilliantly, and he thinks voters want to get out of the Mideast immediately, regardless of the consequences. So once again, it’s Trump against the GOP establishment.
Third, the Ukrainian hearings will heat up this week, with potentially explosive testimony from former EU ambassador Gordon Sondland, a major Trump campaign donor, who reportedly will concede that there was a quid pro quo with Ukraine on probing Joe Biden’s son in exchange for military aid.
House impeachment is now very likely, and Trump is furious — but his profane threats to sue members of Congress or impeach them are toothless. The Democrats, meanwhile, have made this all about Rudy Giuliani, and virtually every Republican we’ve talked with in recent days thinks Giuliani is un-hinged, inflicting tremendous damage on Trump.
BOTTOM LINE: We’ll stick with our call that there’s a 25% chance the Senate could convict Trump, but that number may creep higher — there are widening cracks in his support from Republicans. They’re willing to overlook Trump’s telephone calls to Ukraine, but they’re not willing to overlook his abdication in the Mideast.
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.