After weeks of broadcasting that they were close to a trade deal and how “good” it will be for the China and the US, then expressing that he wants to have a meeting in Florida at Mar-a-Largo, the President`s home away from home, by the end of March, now almost nothing is happening and the Chinese negotiators who are assigned to the talks are wondering what to do.
In fact, there have not been any in-person talks between negotiators from China and the US in over two weeks. It seems that Mr Trump is still playing a complex four-dimensional gave of chess and as we have studied in the past, using advanced game theory techniques.
Please see our audiovisual presentation on Trump Foolishness, Crooked Hillary, Trade Wars and Game Theory.
While many are looking at Trump for a much-awaited solution to the trade war, it makes sense for him not do anything. It is important to point out that Trump took a big step when he left Hanoi without a deal. He walked out on Kim Jong-un before anything was signed. He sent a clear message to Kim saying that if he does not like a deal, he just walks away.
However, he may have been sending a message to the Chinese leadership as well. He may be saying to the Chinese negotiators and President Xi Jinping that he will walk away from any deal that seems to be going well – walking out can be embarrassing for Kim or Xi but is this Game Theory? What is odd is that they US negotiators are not reaching out to the Chinese.
Injecting instability into a stable system is what one would do in Game Theory. This would make all talks that seem to be going well, suddenly “at risk” and specifically for President Xi, will encourage his Party supporters to pressure him.
We at Classiarius still believe that a trade deal is impossible now, as there are too many structural problems that prevent a meaningful solution – it will take years to fix. Until then, look for more disappointments and more equity selling into strength the US, and Japan.