The Takeaway:

President Trump's statement that he has tariffs on yet another $267 billion in Chinese imports ready to go "on short notice" is the latest example of Trump's tactic of negotiating via threat. Presently, the Administration is still working to finalize tariffs on an additional $200 billion in Chinese imports and, per Larry Kudlow, will not move forward on that until they evaluate public comments received over the last month. In short, Trump is shifting to his next threat before he follows through on his current one, doing so out of a desire to hit China while he thinks they are weakest. Before any additional tariff threats become viable, we believe the Administration will need to work through finalizing and implementing the $200 billion round, which we currently expect will take until late September. The fact that Trump made his threat of additional tariffs on Air Force One, while traveling to a campaign rally, offers important context for his comments. He intended for this threat to appeal to his base as much as he meant it to pressure China. Moving forward, we expect increasingly aggressive rhetoric from Trump as he looks to bolster his core supporters ahead of the midterm elections.