China blaming US for breakdown in trade talks

Channel: Fox Business
Published: 05/22/2019

Description
The Cow Guy Group Principal Scott Shellady on the potential impact of the mounting trade war with China and the outlook for Federal Reserve policy. FOX Business Network (FBN) is a financial news channel delivering real-time information across all platforms that impact both Main Street and Wall ...



Transcript
China now contradicting the trump administration saying the u. s. is to blame for the breakdown in trade talks, scott shellady principle, the cow guy group. A tjm joins us now from the cm e good morning to you, scott brighten early morning, well at least early unless you're about bite but listen. I guess the question people are asking you who's gon na blink first, but as this drags on, how much of ...
how much pain is the us economy gon na feel? Well, it's a it's a decent size, the us economy, but the us economy can overcome it. The real problem here ash is that what we have to worry about is the longer and more protracted. This thing lastsyou're gon na have the the best way to put it is: how long could? How would a business come back from having their customers go elsewhere? For two years right right i mean we might open up and be ready for business and have some sort of agreement a year and a half down the two years down the road. But are you gon na get all your customers back and i think, while this takes longer, china's gon na get used to buying from other suppliers and that's the big problem? There'S gon na be a degradation you're not gon na get out those customers all to come back, and i know that that's definitely something that small business is worried about andabsolutely the farmers. So i think that he's gon na try to wait. President trump out. I think that he doesn't have any cnn polls he's got nothing to worry about the worry about over there. So he's just gon na sit there and i think he's gon na give that a shot so they're gon na.

Do this back-and-forth thing we're gon na get close and get it far away, but i think it's gon na take a lot longer than people think, and you know, we've just gotten some some of the latest earnings from some of the retailers you know: kohl's jcpenney home Depot they were little disappointing and this is without the tariffs really starting to bite. So is that a concernyeah there's a concern? I mean look. We, if you take the total amount of the tariffs that the us consumers gon na, have to pay this year, roughly 65 billion dollars, that's about a third of the tax cut that trump gave taxpayers. So we can, we can see, you know, handle it, but at the end of the day, that's still going to be a big chunk, and you know we'd like to see gas prices to help offset that too, so we're gon na be able to get through it. It'S probably gon na cost us about a half percent in our gdp, which is not good, especially when we might be on the downhill side of this expansion. Butthe us economy is still doing well enough that we'll be able to survive it. It'S just a problem as once we do open the doors and we do get a deal. Are all your chinese customers gon na come back or are they gon na get used to buying from somebody else? I think that's the biggest worry. I i think you're right. I just want to switch gears a little bit talk about the fed. We get the fed minutes later today from their last meeting. Do you get the sense that, because inflation has been so stubbornly low, that the door is still open for a rate cut yeah? I do and i think that bullard said something onthe tapes overnight - that i thought maybe they overdid it with that rate rate hike in december.

Yes, i here's my here's, where i think i think we're gon na start talking about that ugly word! Deflation! If we don't see any inflation from the higher tariffs coming into the us, if we don't get any inflation out of that, that's gon na start to spook a little bit and then we're gon na start worrying about deflation and that's definitely a problem. And that's when i think you start to see the rate hike, a rate cut to kind of get more and more louder yeah. We do not want to be japan bottom line. Scott. Thank you. So much again, forjoining us this morning really appreciate it. No problem!.


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