Are markets getting used to Trump tactics?

Since the start of his presidency, Donald Trump has made it his mission to be the great disruptor.

He despises the political establishment in Washington, so his response has been to attack it and ignore it. He also despises trade deals that he believes have compromised US interests and influence through consensus negotiations. His response? Rip them up and bully his opponent to the table on his terms. All potentially very worrying. But is this genuine disruption or simply something we, and the markets, need to get used to?

At the end of last year, the noise coming from Trump’s administration was outwardly very worrying for investors. Trump and co had apparently lined up trade wars with the US’ largest trading partners, China and the European Union, and an actual war with North Korea’s “rocket man”.

Skip forward to now, and Trump has announced he’s sending a delegation to China in search of a trade deal, has given his blessing to an end to the war between the two Koreas and spent last week buddying up to French president Emmanuel Macron – the English-speaking critic of virtually all of his foreign policies. Not the results we expected from this most un-establishment of presidents.

There is a pattern to all of this, and instead of being disruptive, it’s predictable. Trump now notes his team have “a very good chance of making a deal” with his “friend” Xi Jinping’s government in Beijing.

After weeks of tit-for-tat unilateral measures between the world’s two largest trading nations – with hundreds of billions of dollars’ worth of tariffs being threatened – the meeting will be the most substantial step forward we’ve seen since Trump took office. For all the China-focused ire we’ve seen from Trump during and since his presidential campaign, it looks more and more as though his ‘stoking the fire’ tactics are working.

And so, to North Korea, where Trump went as far as to call leader Kim Jong-Un “honourable” and wax lyrical on the prospects for negotiations. A far cry from the button-measuring and “little rocket man” name calling we saw a few months ago.

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