Good discussion between Tom Friedman and Steve Bannon on the ‘big picture’ of the U.S. -vs- China geopolitical trade confrontation.   Friedman is an insufferable prog on methods, but he recognizes the President Trump approach is necessary.  Worth Watching:

.
Where academic Friedman is helplessly naive is on the key point of how a coalition approach toward China is a pipe-dream.  When it comes to economics each entity has unique self-interests.  Put fifty self-interested governments together (ie. TPP) and you end up with paralysis of analysis and no action; as each entity fights to hold their own interest over the group interest….. While China grows in the background.
(more…)

Curtis Ellis was special advisor to Secretary of Labor Acosta in the Trump administration. He is now an outside government advisor to America-First Policies, an unaffiliated economic advisory board and advocacy group. In this video Ellis walks through the big picture behind the U.S. -vs- China Trade confrontation.

(more…)

Good China -vs- Bad China

Michael Pillsbury discusses the ongoing U.S-China trade negotiation and notes the internal dynamic within China as their primary negotiator Vice-Premier Liu He was stripped of his title: “Special Envoy of Chairman Xi Jinping”.

(more…)

President Trump is executing one of the most brilliant geopolitical economic resets in the history of global trade. It really is stunningly remarkable how President Trump has controlled the entire landscape. The consequential phase now begins.
It is fascinating how the financial pundits didn’t see this coming. Perhaps one of the best indicators of where things are today comes from this quote within the South China Post:

“The Administration’s Section 301 tariffs and China’s retaliatory tariffs will now further disrupt – or even break – many thousands of supply chains in both countries.”
[Nelson Dong, a senior partner at Dorsey & Whitney]

The quote by Nelson Dong is stated *as if* shifting/breaking supply chains is a flaw in the approach. It’s not. Exactly the opposite is true; this is a feature of the strategic reset.  A specific and purposeful feature designed by President Trump.
What Dong is predicting is the deconstruction of “one-belt, one-road”.
(more…)

Looking at the retaliatory response from China today; there’s lots of great news.  China is doing exactly what President Trump quietly predicted.  They are walking directly into his trap.  Trump is a friggin’ genius…. more on that coming.
This video from Steve Hilton last night was very well presented.

(more…)

CTH was wondering how long it would take for President Trump to point out the brutally obvious…. Thanks to some advanced planning that everyone ignored, there are multiple trade alternatives to China:

Perhaps now people will reference President Trump’s long-game strategy which has been evident since his marathon Asia trip in November 2017.
Long before media pundits starting noticing/considering how serious President Trump was about structurally resetting the entire landscape of a U.S-China trade relationship,  President Trump quietly and methodically laid the groundwork with personal visits to: Prime Minister Shinzo Abe (Japan); President Moon Jae-in (S-Korea); President Tran Dai Quang (Vietnam); and President Rodrigo Duerte (Philippines).
Oh, how quickly the media forgot.
(more…)

National Economic Council Chairman Larry Kudlow appears on Fox News to debate Chris Wallace over the U.S-China trade reset.  As customary Wallace completely ignores the dynamic of communist China as a state run economy, and not a free market system; thus presenting the fictitious Wall Street position about bad tariffs.
Chairman Kudlow notes the bigger issues of President Trump confronting the enforcement mechanisms that must be in place if a trade agreement (FTA) between a free-market system (USA) and a state-run system (China) are going to work…

.
Washington, DC – U.S. Trade Representative Robert Lighthizer today released the following statement regarding additional action under Section 301 of the Trade Act of 1974:
(more…)

Giddy up… President Trump has fulfilled another campaign promise to confront China and hold firm.  As promised, three decades of Donald Trump’s intense commitment to stop the exfiltration of Amerian wealth is on display today.

When you plant your tree in another man’s orchard don’t be surprised when you end up paying for your own apples….

U.S. Trade Representative Robert Lighthizer; U.S. Treasury Secretary Steven Mnuchin; U.S. Commerce Secretary Wilbur Ross and U.S. President Donald Trump are confronting Chinese Chairman Xi Jinping and Vice-Chairman Liu He… and now consequential things get economically very serious.
There are going to see multiple geopolitical background moves now as the confrontation shifts to the painful phase…. who can outlast the economic standoff.

WASHINGTON DC – Negotiations to end the US-China trade war came to a surprisingly early close in Washington on Friday with no signs of a deal – reportedly just hours before the Chinese delegation will return to Beijing.
US Treasury Secretary Steven Mnuchin told reporters at noon that the talks had been constructive as he left the US trade representative’s office, where negotiators held their latest round of talks in an attempt to end a months-long trade dispute. (more)

(more…)

USTR Robert Lighthizer has filed the official notification with the federal register for the increase in Section 301 tariffs from 10% to 25% effective Friday (full pdf below).  Additionally Reuters has exclusive details of the collapse in U.S-China trade talks.
As most CTH readers are aware, Lighthizer has focused heavily on the enforcement mechanisms within the trade talks. [Previous Bookmark] Apparently, when the 150 page draft agreement was presented to the Chinese politburo, Beijing balked at allowing the U.S. to hold controlling enforcement over the trade agreement terms.

The fallback presentation from Vice-Chairman Liu was: we cannot put the binding enforcement mechanisms in writing, you’ll have to ‘trust us’ to honor the agreement; at which time Lighthizer said no-way.

WASHINGTON/BEIJING (Reuters) – The diplomatic cable from Beijing arrived in Washington late on Friday night, with systematic edits to a nearly 150-page draft trade agreement that would blow up months of negotiations between the world’s two largest economies, according to three U.S. government sources and three private sector sources briefed on the talks.
The document was riddled with reversals by China that undermined core U.S. demands, the sources told Reuters.

(more…)

Well, it looks like all suspicions are now confirmed. The dragon dance of 2017 and 2018 has extended into 2019. DPRK Chairman Kim fires rockets, Trump smacks Chinese Chairman Xi. Yes, we can officially put the remaining bits of skepticism to rest…
The meeting last week between Treasury Secretary Steven Mnuchin, U.S. Trade Representative Robert Lighthizer and their Chinese counterparts including Vice-Chairman Liu, was especially important.  Mnuchin and Lighthizer said they would debrief President Trump on the likelihood of whether a successful trade deal with a communist regime was structurally possible; or whether Beijing was playing a game of delay.
The ongoing dance with the dragon has been a series of cunning manuevers between the Panda mask and the Dragon face. At the conclusion of the Beijing visit by Mnuchin and Lighthizer, Chinese Chairman Xi sent a proactive response using his familiar proxy North Korean Chairman Kim. The DPRK test-fired three missiles.
Today President Trump responds:

The increase of the Round-1 tariffs from 10% to 25%, previously delayed after discussions between Xi and Trump in Argentina, will now be triggered. Additionally, the Round-2 tariffs (25% on $325 billion of different goods), originally scheduled for March 1, also postponed after the Argentina dinner, will now be implemented.
(more…)