A trade truce between the U.S. and China sent the S&P 500 (^GSPC) to a record high Monday, but as investors rejoiced, one Democratic presidential candidate questioned President Donald Trump’s long-term plan.
“What's the larger strategy that's going to help us with our relationship with China? What are we doing to help us compete with China? And the answer is nothing,” Ohio Congressman Tim Ryan told Yahoo Finance’s On the Move, adding that tariffs is just a tactical move and has not been a part of an overall strategy “that’s going to help us with our relationship with and compete with China.”
Trump took to Twitter over the weekend to boast about his meeting with Chinese President Xi Jinping and the the trade truce:
I had a great meeting with President Xi of China yesterday, far better than expected. I agreed not to increase the already existing Tariffs that we charge China while we continue to negotiate. China has agreed that, during the negotiation, they will begin purchasing large.....— Donald J. Trump (@realDonaldTrump) June 29, 2019
....amounts of agricultural product from our great Farmers. At the request of our High Tech companies, and President Xi, I agreed to allow Chinese company Huawei to buy product from them which will not impact our National Security. Importantly, we have opened up negotiations...— Donald J. Trump (@realDonaldTrump) June 29, 2019
....again with China as our relationship with them continues to be a very good one. The quality of the transaction is far more important to me than speed. I am in no hurry, but things look very good! There will be no reduction in the Tariffs currently being charged to China.— Donald J. Trump (@realDonaldTrump) June 29, 2019
Despite the trade truce, both the U.S. and China made no plans to reduce the current tariffs on one another’s goods. Now with the president back in Washington, Ryan questioned the tit-for-tat moves.
“The tariffs are on, the tariffs are off, the tariffs are on, the tariffs are off. He's backing off on Huawei, which I think is a real national security issue. What's the plan for us to win the 5G battle? What's the plan for us to win the 6G battle?” said Ryan.
Shares of big name chipmakers, including Micron (MU) and Qualcomm (QCOM), jumped Monday after Trump said the U.S. plans to lift the ban on Huawei, allowing U.S. companies to do business with the Chinese telecom giant.
Ryan, who warned that the U.S. is behind China, said the government has a responsibility to work with the private sector in education, research and infrastructure so the U.S can dominate these industries.
“What's the plan for us to dominate the electric vehicle market, which China dominates about 40% to 50% now? What's the plan for us to dominate the solar panel market, which China dominates about 60% now?” said Ryan. “They're cleaning our clock right now, and we have no plan.”
“He’s so distracted. And I think he's more concerned about getting on TV and dominating the news cycle than he is having a long-term plan,” he said. “And to me that's the biggest issue in facing the country right now is that China has a 10-year plan, a 30-year plan, a 50-year plan, a 100-year plan, and our president is operating in a 24-hour news cycle.”
Kenneth Underwood is a senior producer for Yahoo Finance. Follow him on Twitter @TheKennyU.