People, people, people. Why is this happening?

On Thursday, President Donald trump announced he had a trade deal with China, and stocks soared. All was well in the wall street universe. The administration gave itself a Pat on the back.

A few hours later, however, everyone realized that this “phase-one deal” sounded a lot like the trade war detente the US and China came to last December. In this latest “mini-deal,” like the agreement from nine months ago, the two sides agreed that China would buy some agricultural goods here and there, and in exchange for the U.S. tariffs would not rise for the time being.

(There are more details we have to assume, but they are hard to understand since the agreement was not recorded or anything this time.)

Surely this deal leaves intact the deep structural differences between the US and China? issues that include significant changes in China’s business practices and law enforcement? Unresolved. These are the questions at the heart of the trump administration’s justification for starting a trade war.

And so, in the days following the announcement of this “phase one deal,” the cracks began to show:

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Let me tell you a story about the President. From 1986 to 1988, trump reportedly made millions betting on the stock market. His strategy was to leak to wall street that he was going to take on the company like a real corporate raider. He then quietly sold his shares before everyone realized he was bluffing.

It ended with wall street realizing two years later that trump’s bark was far worse than his bite.

How long will it take this time?

President Pump-and-Dump

Meanwhile, as trump reaches his trade deal and wall street foolishly gets its hopes up, the rest of us-China diplomatic relations are in crisis mode.

So while trump may say the trade war with China is on track to be resolved, the rest of the relationship is in chaos.

And according to Sam Bresnick and Paul Haenle on foreign policy, there are some in China who like it that way.

For them, Donald trump, who is willing to let democracy falter in Hong Kong (and the rest of Asia), who does not trust his allies, who are easily fooled, is a President who can create the kind of opening that will allow China to gain ground on the rapidly tilting pla Net. One Chinese thinker called it “the greatest strategic opportunity since the end of the cold war.”

Of their piece, which is very much worth reading:

In the course of numerous handwritten discussions with Chinese government officials and academics, we find that a growing number of people are hoping for trump’s re-election next year. At a time when China’s political clout and military capabilities are growing, they argue that despite its anti-China hype, trump has given Beijing space to expand its influence across Asia and, more importantly, comprehensively weaken Washington’s Global leadership. In terms of zero sum, many Chinese have concluded that trump’s policies are strategically very good for China in the long run.

On top of all these complications is a simple matter of trust. Last month, a special forum on China’s development was held in Beijing, attended by politicians and technocrats around the world. The message from that, according to Susan Thornton, former assistant Secretary of state for East Asian and Pacific Affairs, was that the Chinese did not think trump was acting in good faith.

“They think trump wants the fight with China to be part of the election,” she said during a phone call with Business Insider. “They think he doesn’t want to make a deal.”

Thornton told us that the American and Chinese sides have difficulty understanding each other. Chinese diplomats tend to be subtle in their dealings; the US President is not a subtle person.

“Trump is presiding over a bleeding of U.S. confidence,” Thornton said. “There is no way the Chinese believe in the US … and having seen trump’s antics on the world stage, how is anyone going to make a deal with us?

If we’re stuck in phase one

Now, you can think to yourself: at least the trade war isn’t getting any worse. If we’re stuck in phase one, we’re stuck in phase one.

The problem is that the first phase is already causing chaos in the world economy. Up until September, the American consumer was the undisputed champion, holding things together in a world of negative interest rates, slumping trade and manufacturing data, and declining business investment.

But last month, U.S. retail sales began to SAG. And now the Federal reserve’s Beige book? a quarterly survey of businesses across the US released last week? rife with complaints about how the trade war is holding back sales and driving up input prices.

Then there’s what’s happening in China, the world’s second-largest economy. Last quarter, GDP growth slowed to its lowest level in three decades, 6%. Trade, production, industrial production? everything goes down. One bright spot is infrastructure investment, which is backed by the government and widely considered a platform for dangerous shadow banking.

The world needs a real us-China trade deal if economic growth is to return to the planet, not the fake deals the trump administration continues to serve. Wall street? the so-called masters of the universe and the rising ones who serve them? must be smart enough to know the real deal when they see one. But no. So far they have bought almost every pump the President has sold them. We hate to see it.