On one hand, I guess it makes sense that the world is now looking to Steve Mnuchin for answers when it comes to averting a global trade war that, ironically, could end up negating the entire positive fiscal tailwind from tax reform for S&P earnings (according to one bank's estimates).
After all, this is an administration that's woefully short on ostensibly sane people and by comparison, Mnuchin is a model of rationality. I mean, when it comes to China, Peter Navarro is famous for making a documentary that features a bloody Bowie knife with a yuan-wrapped handle stabbing America's heartland to death on the promotional poster. And as far as the PR campaign around the tariffs, Wilbur Ross has struck out twice trying to explain what's going on, first by showing up on CNBC with a can of Campbell's soup he said he bought at a 7-11 store in Boynton Beach, Fla. and then again just days later when he promised that he and Trump weren't "trying to blow up the world." "Thanks Wilbur, but let's give someone else a shot now."
So again, it's all relative here and when the bar is set that low, even Steve Mnuchin can clear it. Markets stabilized on Monday morning after suffering through their worst week in over two years and the momentary calm was at least partially attributed to an interview Mnuchin did on Sunday with state television. Here's the soundbite everyone keyed on:
Now for one thing, there is exactly nothing confidence inspiring about the look on Steve's face when Wallace asks him if he's suggesting that none of this is going to lead to an actual trade war:
But beyond that, it's not entirely clear that what he says in that clip is conciliatory. Just because he said "cautiously optimistic" doesn't wipe away everything else he says in the interview and if you watch the whole thing, he makes it clear that Trump "isn't afraid of a trade war" and he says very explicitly that for now, Washington is moving ahead with the tariffs announced last week.
To be sure, the conversations Mnuchin mentions he's been having were documented (i.e. confirmed) by a couple of media outlets over the weekend, including the Journal. Apparently, Mnuchin and Lighthizer have sent China what amounts to a list of demands:
In a letter Messrs. Mnuchin and Lighthizer sent to Mr. Liu late last week, the Trump administration set out specific requests that include a reduction of Chinese tariffs on U.S. automobiles, more Chinese purchases of U.S. semiconductors and greater access to China’s financial sector by American companies, the people said. Mr. Mnuchin is weighing a trip to Beijing to pursue the negotiations, one of these people said.
Mr. Mnuchin on Saturday called Mr. Liu, President Xi Jinping’s top economic adviser, whose promotion as vice premier during the just-concluded annual legislative session essentially makes him the country’s economic captain.
So I guess that's a positive (?) development - in that kind of way where when you're the subject of a shakedown, the people extorting you were at least "kind" enough to tell you what you're expected to do.
But the best part is this: "Mr. Mnuchin is weighing a trip to Beijing to pursue the negotiations."
Oh, good! Because remember what happened the last time Mnuchin got off a plane and started talking about trade? Let me remind you. Here's a flashback to the moment when Steve touched down in Davos less than 48 hours after Trump started a residential washing machine war:
Again, that was on January 24. And you have to be a special kind of tone deaf to show up in Davos, as Treasury Secretary, and immediately jawbone the dollar lower two days after your boss started slapping tariffs on shit.
So ultimately, I guess the fact that Steve Mnuchin is now being held up as the guy who is going to help avert a global trade war is just further proof that irony is indeed dead in the age of Trump.
Still, as alluded to above, if you're going to send someone to Beijing you've got to think it's preferable to send Mnuchin - as opposed to say Navarro (who is still building his murder one case against the Chinese) or John Bolton (who might try to poke someone with a cattle prod).