"We have all the cards!" Trump told a crowd on Thursday, in reference to the ensuing trade war with China.

Wall Street is well conditioned to ignore the often hyperbolic words of US President Donald Trump, and on Friday investors shrugged off comments that his administration is ready to massively escalate a tariff battle that began in earnest on Friday.

Speaking to reporters late Thursday en route to a campaign-style rally in Montana, just before tariffs on U$34 billion worth of Chinese imports were set to go into effect, Trump said there are more to come.

“Then you have another 16 [billion] in two weeks and then as you know we have 200 billion in abeyance and then after the 200 billion we have 300 billion in abeyance. OK? So we have 50 plus 200 plus almost 300,” Trump said, per reports from CNBC and Reuters.

On Friday, markets largely ignored the bombast, focusing instead on another strong jobs report.

Main US benchmarks are headed for the first weekly gain in several weeks, with a consensus view that this round of tariffs, even if combined with taxes on another US$16 billion in Chinese products, will have a minimal impact on the economy.

The initial tariff threat was once considered by many analysts to be merely a negotiating tactic. Now that they have gone into effect, the same view is being taken of across-the-board tariffs on autos or of steeper tariffs on Chinese products.

At the rally in Montana, Trump relished in his defiance of Republican challenges to his trade policy in front of a massive, raucous crowd of supporters.

“We have all the cards! We’re the bank that everybody’s stealing from!” the president exclaimed.

“You saw with China, 50 billion dollars – and another 200 billion dollars, frankly, is waiting. Nobody’s ever seen this before. ‘Cause China – and I have great respect for President Xi, and for China – they’ve been killing us.”

“The war was lost, but now we’re going to win it because we have all the cards,” Trump reiterated to great applause.

China has been measured in their response, as we noted earlier today, reluctant to play some of the cards it has up its sleeve. But both sides have dug in, and it is unclear what the offramp is for leaders in either country. The Trump administration has already rejected a deal for China to enter into long-term contracts to increase purchases of energy and agricultural products from the US.

So long as the US economy and financial markets continue to chug along, there is little indication that Trump would accept a deal that doesn’t include some sort of explicit guarantees related to forced technology transfers, or other industrial policies cited by the US administration. With such policies being employed as a key element of Beijing’s strategy to become a leader in high-tech industries, it is unlikely they would make such a concession.

Trump will also listen for the volume of crowds attending his rallies. If getting tough on China is a crowd pleaser, there is little reason to doubt he will double down.

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