Does anybody in the U.S. covet Greenland? More importantly, do the three people living on Greenland want us? (NB: a joke. I know there are more than three people in Greenland.)

Surprisingly, President Donald Trump’s reported interest in the U.S. buying Greenland isn’t dominating the news at week’s end. The focus remains on the ongoing trade war between the nation and China, and interest rates and how the Federal Reserve Board may react to the rate inversion that took place last week (see page 6).

While the President has been insisting that China, not US consumers, pay tariffs; he did take a step back from the brink with his announcement there will be a delay in the implementation of the new 10% tariff on many big-ticket consumer goods.

Just a few days after Trump announced his 10% tariff on $300 billion of Chinese imports to be effective September 1, he announced a delay until December 15 on approximately $200 billion of the proposed $300 billion. The products delayed included electronic products such as laptops and cell phones that are purchased both for back-to-school and holiday gift seasons.

The sometimes violent troubles in Hong Kong have added to the complicated decision making process for Trump Administration trade policy. The President in some Tweets has broached the idea of linking trade talks to the outcome of protests in the Chinese city with its special relationship to the mainland. Even without the Hong Kong wildcard, China has announced that it would retaliate on September 1.

The $100 billion of new tariffs, when combined with the existing 25% tariff on $250 billion of Chinese goods, will subject nearly 70% of all Chinese imports to some level of tariff. While the President tried to soften the blow, many consumers will still be hit with the new tariffs, and farmers anticipate more bad news from China.

On the Fed front, next Friday, Aug. 23, could be a major opportunity for the central bank to send a signal on policy. That’s when Fed chair Jay Powell speaks at the annual meeting of central bankers at Jackson Hole.

So, while the rate inversion shook markets, at the same time the US posted stronger than expected retail numbers. Powell has been adamant about Fed independence, yet markets are anticipating a September cut. It will be a critical time for the Fed Chair to set the tone for the September meeting.

Trump Delays Some China Tariffs; Hong Kong Protest Muddles Talks
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