President Donald Trump could be "playing a waiting game" when it comes to striking a trade deal with China to help his reelection bid, former U.S. Ambassador to China Max Baucus told CNBC on Wednesday.
"Let's not forget, Donald Trump is, in a certain sense, very smart. Almost brilliant. And maybe in the back of his mind he's going to wait a little bit," Baucus said. "Then the stock market is going to zoom up. It will rocket up, and maybe help him get reelected."
Trump is "playing a waiting game. I have a hunch that's in the back of his mind," contended Baucus, a diplomat during former President Barack Obama's administration. He's also a Democratic former senator from Montana.
The escalating U.S.-China trade war has sent financial markets falling and soaring on nearly every headline. Wall Street is showing increasing concern over Trump's latest plan for tariffs on more Chinese goods and higher rates on existing duties. The president's Friday tariff announcement sent the Dow Jones Industrial Average down 623 points. The Dow recovered a bulk of those losses on Monday, only to fall back again Tuesday.
Hopefully the markets begin "to understand" Trump and ease up on the volatility, Baucus said on "Squawk Box." "They're beginning to realize that all of this rhetoric from the president isn't really getting the result."
Baucus said he's not sure how long the world's two largest economies can hold off before striking a deal. "The question is how long can he wait until something else goes south?"
Anyone with a significant market in China, especially farmers, are losing share they won't get back, Baucus said. That could lead to lost votes for Trump, he also posited.
A White House spokesman was not immediately available to respond to Baucus' comments.