A combination of the NAFTA “Fatal Flaw” & transnational Chinese shipments, was always at the heart of President Trump placing steel and aluminum tariffs on Canada and Mexico during negotiations that culminated in the USMCA trade agreement.  The goal was to block China from dumping product into the U.S. through the doors of Canada/Mexico.
Within the USMCA President Trump and Robert Lighthizer placed a specific rule Article 32:10 which grants the U.S. the right to veto (control) Canadian and Mexican purchase agreements with “Non FTA Market Countries”, ie. China.

This Article 32:10 rule is at the core of the USMCA agreement.   However, after the USMCA agreement was reached President Trump kept the Steel/Aluminum tariffs in place.  For those who don’t understand Trump (insert Chrystia Freeland here) the question was always: why?
Quite simply the answer behind the question was President Trump’s retention of leverage. Yes, in 2018 the USMCA was agreed to; however, the USMCA was not ratified by either Canada or Mexico…. it was only an agreement.  Why would Trump remove critical leverage on an initial promise.
Trump is not a politician; he’s a businessman who knows promises are paper until they become action. Additionally, President Trump is a tactician; the tariff leverage was held until such a time as removing it would generate an immediate gain in national compliance toward his trade objective… That’s the action.  Today:

(Bloomberg) President Donald Trump said the U.S. will lift steel and aluminum tariffs on Canada and Mexico, boosting efforts to encourage lawmakers to ratify a new North American trade deal.
“I’m pleased to announce that we’ve just reached an agreement with Canada and Mexico and will be selling our product into those countries without the imposition of tariffs or major tariffs,” Trump said at an event Friday. “Hopefully Congress will approve the USMCA quickly.”

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Today President Trump outlines an approach to head-off the anticipated retaliation from China over the increase in U.S. tariffs that began today. Whether this is structurally possible, or whether this is Trump’s attempt to diminish the leverage carried by Vice-Chairman Liu He, is an interesting question. However, the strategy is clear.
Overall U.S. inflation remains low relative to the economic gains from MAGAnomic policy. [Current CPI HERE].  GDP and wage growth are both exceeding inflation. As such, now is indeed the best time to confront China. President Trump notes this today in a tweet:

Inflation in the U.S. remains low overall at 1.8%…. now is the perfect time to hit Beijing with expanded tariffs.  However, President Trump knows China will retaliate through the multinationals on Wall Street.  President Trump knows China will specifically target the U.S. Agriculture sector. China will likely attempt to put pressure on Trump by refusing to buy U.S. farm product. The BIG AG multinationals will go bananas.
The BIG AG multinationals, those who control food/farm production, also control key Senators; they have been purchased through lobbyists. This is part of the Big Club approach/strategy.  Wall Street and the U.S. Senate will be aligned to support China; as a consequence President Trump needs to counteract their effort.
President Trump’s approach to counteract China’s strike against the U.S. agricultural community is visible in a series of tweets today.  I don’t necessarily agree with the proposal long-term, BUT I do understand the short-term objective…. optimum expediency.
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Director of the National Economic Council, Larry Kudlow, discusses the booming U.S. economy, the future outlook and why he supports the USMCA deal.

A tale of two contrasting sets of economic priorities. The U.S. economy continues to outpace all economic forecasts.  Recently U.S. retail sales, wage growth and housing starts have exceeded all expectations.  Tomorrows announced U.S. GDP growth is positioned to exceed all previous doomsayer predictions from the professional financial back-bench.
However, the economic results in Canada are going in the opposite direction.  The Bank of Canada cut their GDP forecast from 1.7% to 1.2% today.  A forecast drop of half a percent is a massive drop considering the prior rate of growth was meager at best.

Two full years into the advancement of America-First priorities, the international community is now admitting they can only find growth and value in U.S. investments.

(Via Reuters) […] The [Canadian] central bank now expects economic growth in the first half of 2019 to be lower than anticipated in January, when it released its last monetary policy report, due to a slowdown in Canada’s oil sector, the negative impact of global trade policies and a weaker-than-expected housing sector.

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A massive defeat for the left-wing loons in Alberta Canada now means half the Canadian provinces are aligned against Justin’s rainbow-socks coalition and disastrous climate agenda.  Apparently having a common sense approach now means ‘right-of-center‘.

CALGARY, Alberta (Reuters) – A right-of-center party swept to power in Canada’s main oil-producing province of Alberta on Tuesday and attacked Prime Minister Justin Trudeau’s efforts to fight climate change, raising tension just months ahead of a federal election.

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There’s a term called “zeroing” at the heart of this World Trade Organization decision that supports President Trump, Secretary Ross and USTR Lighthizer.
When an industry product like Canadian softwood lumber is shipped into the U.S. for sale at a lower price than exists in Canada, the U.S. Commerce department calls that “dumping“.  If the Canadian product is the same or higher in the U.S. as it is in Canada there is no dumping.  No dumping is a “zero” or normal price differential; hence “zeroing”.

The Canadian government is subsidizing their lumber industry by allowing tree removal from federal land at discounted rates so long as the lumber is exported.  This made softwood lumber cheaper in the U.S. than in Canada and set up the dumping issue.
[NOTE: This is the same issue with Steel and Aluminum from China]
U.S. lumber mills were going out of business because Canada was dumping subsidized product into the U.S. market at a discounted rate.  As a consequence, in 2017 Commerce Secretary Wilbur Ross instituted a 20% tariff on Canadian lumber to protect the U.S. lumber industry.  The tariff is a countervailing duty to offset the Canadian subsidy. ie. “zeroing”.
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National Economic Council Chairman Larry Kudlow appears on Face The Nation to discuss issues with the U.S-Mexico border and possible economic ramifications if the security issues are not addressed. Additionally, Kudlow discusses the USMCA trade deal and the status of current negotiations with China.

Political events in Canada are revealing new levels of leftist collectivism.  The fallout from the SNC-Lavalin bribery/corruption scandal continues to expose just how far the modern left will go in order to demand absolute compliance and protect their political interests.

[Backstory Here – and Here – and Here – and Here]

Yesterday Canadian Prime Minister Justin Trudeau banished former Ministers Jody Wilson-Raybould (statement here) and Jane Philpott (statement here) from the Liberal Caucus, for non-compliant behavior. Both women exposed how Trudeau demanded the Attorney General drop a criminal prosecution to serve his political interests.
Today Ms. Raybould and Ms. Philpott responded to the heavy handed tactics during a press conference.  The former Attorney General stated: “I knew something very dangerous and wrong was going to happen.”  Canada is FUBAR.

Oh boy, if you’ve been following the Justin Trudeau scandal surrounding the SNC-Lavalin bribery and corruption case, well, things just got more interesting.  Former Justice Minister, Canadian Attorney General Jody Wilson-Raybould, has stated, repeatedly, she felt pressured by Justin Trudeau to interfere in a criminal prosecution to help a business based on politics.  [Backstory Here – and Here – and Here]
Obviously Ms. Wilson-Raybould knew Trudeau was putting her in a legally precarious position because she took the unprecedented step of recording a conversation with Trudeau’s aide, Michael Wernick, while he was applying the pressure.  LISTEN:

CANADA – […] The recording shows Trudeau aide Michael Wernick telling the Justice Minister Jody Wilson-Raybould that Trudeau “is determined, quite firm,” in finding a way to avoid a prosecution that could put 9,000 jobs at risk.
It also shows Wilson-Raybould, who was also attorney general, saying she regards the pressure as “inappropriate.”

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The left-wing media in Canada is doing everything possible to shape, defend and protect Canadian Prime Minister Justin Trudeau from a corruption scandal created by his pressure to stop a criminal case against SNC-Lavalin. {Background Here} and {Update Here}.
The depth of the corruption is evidenced by the level of manipulation deployed by the Canadian state-run media, and yet they are still unable to bury the issue for him.

In the latest development….

OTTAWA (Reuters) – A Canadian cabinet minister, who had quit in protest over the government’s handling of a corruption scandal, said she and others had more to say about the matter, indicating more pain to come for embattled Prime Minister Justin Trudeau.
Trudeau has been on the defensive since Feb. 7 over allegations that top officials working for him leaned on former Justice Minister Jody Wilson-Raybould last year to ensure that construction company SNC-Lavalin Group Inc avoided a corruption trial.

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