The U.S. and China Are Nic Cage and John Travolta, Basically

Today's Agenda

• The U.S. and China aren't playing their usual roles early in their trade war.
• The U.S. economy is holding up fine so far.
• There's a reason Trump keeps hiring Scott Pruitts.
• Politics after Roe v. Wade could look very different.

Begun, the Trade War Has

(Bloomberg Opinion) -- In the ridiculous/great Nicolas Cage/John Travolta classic “Face/Off,” two enemies fight each other by literally wearing each other's faces. The U.S.-China trade war that formally began at midnight is kind of like that.

Led by President Donald Trump, the U.S. is behaving much as China has in the past, as a trade aggressor, slapping tariffs on Chinese goods, upending the global order and probably violating trade rules the U.S. helped write, say Bloomberg's editors. China, meanwhile, is playing America's typical role of free-trade defender, writes David Fickling: Its consumers aren't boycotting American goods, nor are they burning them in the street, as they have in past trade spats. 

Of course, it's early days in the war, with only angry words and opening shots exchanged so far (though Trump has threatened further escalation). China, as far as we know, hasn't overnight morphed into a capitalist democracy. It behooves it to be reasonable for now, but its underlying values are still opposed to those of the liberal West, writes Christopher Balding. Unfortunately, Trump's seem to be too, meaning America loses a) its typical moral high ground, along with b) most of its allies.

The U.S., as the aggressor, should end this foolishness now before any real damage is done, Bloomberg's editors write. Many in the market seem to think the U.S. can win a trade war with China because it imports so much more. But China has many weapons in its arsenal, including those powerful consumers and some nuclear options. 

But no matter the outcome of this particular spat, it's bad news for the global order if America under Trump continues to abandon its leadership role in trade, foreign policy and more, writes Hal Brands. The world's next leader – China and Russia being the likeliest candidates – will reveal its true face in the long run, and it might not be pretty.

The Economy's Pre-War Vital Signs

So far the U.S. economy has suffered no measurable harm from trade tensions. Jobs grew at a pretty healthy pace last month, and even a jump in unemployment can be read as a positive, writes Mohamed El-Erian: “The rise in the unemployment rate was also ‘healthy' because it reflected an uptick in the labor participation rate (to 62.9 percent from 62.7 percent), raising hopes that the labor force can overcome some of its structural headwinds.” 

Notably, though, in the stock market, cyclical stocks have tumbled lately, while defensive stocks have risen. This seems bad? But Stephen Gandel argues there's no basis for such moves in the economic data, and maybe some reasons to dismiss them as a head fake. Still, it's early days.

Scott Pruitt 

Scott Pruitt – who more or less declared himself God's gift to the environment yesterday – no longer runs the Environmental Protection Agency, meaning he no longer gets all the earthly gifts (cheap condo rentals, jet travel, soundproof booths, etc.) he managed to wrangle from that job. But Trump – God's gift to America, per Pruitt – encouraged him to be ethically fast and loose through his own example, writes Tim O'Brien: “Trump has a boundless interest in making money, and as long as he continues ignoring the financial conflicts of interest that tar his presidency, others on his White House team are likely to follow suit.” 

Click here to read the rest.

Imagining Politics After Roe V. Wade

Nothing's certain, but a more-conservative Supreme Court will probably soon overturn the Roe v. Wade decision. Aside from the impact this will have on people's lives, it will also be a tectonic shift in American politics, points out Ramesh Ponnuru. For one thing, the Republican coalition that has slowly consolidated power at all levels of government might crumble. “If the overturning of Roe makes traditionalists less inclined to vote for politicians based on social issues, it could undo some of the party's gains.”

Click here to read the whole thing.

Chart Attack

Big tech IPOs offer only a narrow, exclusive window for quick gains, writes Tim Culpan:

From almost out of nowhere, Lululemon Athletica Inc. is on the rise, giving rivals reason to tremble – and some lessons, writes Sarah Halzack.

Weekend Reading

Trump hiring Bill Shine is yet another in a series of administration fiascoes. – Jonathan Bernstein

Barack Obama needs to get off the sidelines and get involved politically – to help control Democrats. – Al Hunt

One big World Cup winner is online gambling – and that makes society a loser – Lionel Laurent

Working on Wall Street just keeps getting more stressful. – Jared Dillian 

Robots may not take all the jobs, but they will probably make working-class people more miserable. – Noah Smith

ICYMI

Stocks rallied. Wall Street says to sell Tesla Inc. shares. The Trump administration needs more time to reunite immigrant families. Zuckerberg is richer than Buffett.

Kickers

More recycling won't solve plastic pollution.

Want your kid to make a bunch of money in sports? Make them play video games, not tennis, writes Shuli Ren. 

Two strangers met cute on an airplane – and then the stupid Internet ruined it.

Why did humans start writing? It's complicated.

We're still not sure how long humans can live.

Vulture's best albums of 2018 so far.

Note: Please send robots, suggestions and kicker ideas to Mark Gongloff at mgongloff1@bloomberg.net.

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To contact the editor responsible for this story: Timothy L. O'Brien at tobrien46@bloomberg.net

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