Earlier today President Trump welcomed President Mirziyoyev of the Republic of Uzbekistan to the White House for a diplomatic meeting. Among the issues discussed were regional security issues important to Uzbekistan, and engagement in economic partnerships with U.S. companies to enhance a growing trade relationship:
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Recap video below:
It is interesting to watch the Trump Cabinet debate the Obama Cabinet (U.S. media). In this interview between White House National Security Advisor John Bolton and ABC’s Martha Raddatz the central topic is Iran; the detailed conversation is deep weeds therein.
After Bolton presents the administration position and reasoning for exiting the deeply flawed, unsigned and unenforceable Obama Iran “deal” (not treaty), essentially a JCPOA pathway to the land of broken promises, Ambassador Bolton then reaches the part of the discussion where sanctions against European companies come back into play. This is the best part. WATCH:
Massive U.S. economic leverage, and the strategic application therein, is an aspect that drives the left-wing Iranian apologists bananas. A weaponized $20 trillion U.S. economy is the unavoidable atomic sledgehammer at the foundation of the Trump Doctrine. It is far more powerful than a military weapon and drops all nations to their knees in compliance.
Everything is about the economics. E.V.E.R.Y.T.H.I.N.G. Every point of opposition; every forward MAGA policy; every initiative, including freedom; every move toward success; everything is about the economics.
Look at the immediate take-away published by Reuters.
Critical Update – Critical Update – Critical Update
Those who are watching the NAFTA negotiations must pay close attention to the activity in the past 36 hours. There is a key video at the bottom. First the backdrop:
As most are aware the NAFTA fatal flaw, the “loophole”, surrounds Mexico and Canada structuring their economic manufacturing policy -and trade deals- through the exploitation of a back-door into the U.S. Market. Understanding this key issue is paramount to understanding President Trump’s approach therein.
Remove the NAFTA “loophole” and there is no longer an incentive for U.S. manufacturers to locate their operations in Mexico or Canada. However, the removal of this loophole also means China, ASEAN nations and the EU lose the same incentive.
There have been hundreds of billions of previous investment by multinational corporations in Mexico and Canada. Every dollar spent was intended to continue this exploitation.
Then came Trump.
In terms of investment size and scale of manufacturing, the auto-sector is perhaps the primary industry attempting to position themselves to avoid any reversal of the NAFTA scheme; and it is a self-interested economic scheme. In the short term there are billions at stake; in the longer term there are trillions within the equation.
Last year during punditry discussions of North Korea, the traditional crowd were waxing philosophically about military expansionism, and the threat of nuclear war as a likely outcome.
However, all of those Gordian-knot sellers held references from a fundamentally flawed foundation; they viewed the DPRK as a separate nation from China. There were a few voices who challenged geopolitical orthodoxy and presented a different view; the DPRK as a proxy province of China.
When you think of North Korea as a proxy province of China, everything changes. Every possible action and consequence changes. If the DPRK is inherently a proxy province of Beijing, then North Korea already had nuclear weapons; or at least access to nuclear weapons as needed; the argument to stop them was moot.
Additionally, if Beijing was structurally and factually controlling Pyongyang, attaining a peaceful Korean peninsula between Kim Jong-un and his South Korean neighbor Moon Jae-in, was entirely different.
Generally speaking the corporate media have yet to have an honest outline about the fatal flaw within NAFTA that allows China, ASEAN nations and the EU to exploit previous investments in Canada and Mexico as a back-door to the U.S. market.
In a generalized aspect, the recent visit of top U.S. trade and economic policymakers to China was part of Trump’s exploration into the larger dynamic of bi-lateral trade between the U.S. and China knowing full well the NAFTA flaw remains unaddressed. Without addressing the loop-hole (aka ‘fatal flaw’) any modernized NAFTA deal is moot; and by extension the foundation for any future trade deal between the U.S. and China is too byzantine to manage.
It is in China and the EU’s interests to continue exploiting the NAFTA access. It is in Canada and Mexico’s interests to retain the subsequent investment influx.
It is in multinational corporate and Wall Street interests to continue the scheme. However, it is also entirely against U.S. Main Street interests. Hence, NAFTA loggerheads reigns supreme; and in my opinion, we are soon to see President Trump cut the Gordian knot.
WASHINGTON (Reuters) – Senior Canadian, U.S. and Mexican officials trying to rescue slow-moving talks to update the NAFTA trade pact met on Monday in a new bid to resolve key issues before regional elections complicate the process.
With time fast running out to strike some kind of deal on the North American Free Trade Agreement, the three member nations are still far apart on major points.
Commerce Secretary Wilbur Ross discusses the ongoing trade initiatives with China ahead of the U.S. delegation departing later tonight. Secretary Ross, Treasury Secretary Mnuchin, U.S. Trade Representative/Ambassador Robert Lighthizer, Economic Council Chairman Larry Kudlow and White House Trade Adviser Peter Navarro are all heading to Beijing to meet with their Chinese counterparts.
Secretary Ross is like the Babe Ruth of trade-baseball. Wilburine has a way of taking complex issues pitched to him, and knocking them out of the ballpark with an extremely fast common sense bat. He makes it look effortless. Watch:
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Two quick thoughts. First, I think this is the first time every member of Team America (Ross, Mnuchin, Lighthizer, Kudlow, Navarro) has unified into one specific set of trade negotiations. That helps understand the scale of importance of the China trade relationship.
Second, there’s no traveling parallel contingent consisting of outside government members/advisers from of the U.S. Chamber of Commerce. This is a significant change from the past 30 years of Wall Street policy manipulation by the CoC. Many people may not be aware but until President Trump the U.S. government didn’t actually write the trade agreements.
For all prior administrations the actual negotiations and agreements were willingly sub-contracted out to U.S. Chamber of Commerce delegations. This is how the multinationals took control of trade policy and eventually the U.S. economy. CoC President Tom Donohue must be apoplectic now that he is facing an administration actually writing the trade agreements.
President Trump’s MAGAnomic team have announced a 30-day extension for the Steel (25%) and Aluminum (10%) tariffs for the European Union, Canada and Mexico.
Also, after a prior agreement with South-Korea, the “KORUS” deal, team U.S.A. has also reached an agreement in principle with Australia, Argentina and Brazil which will be finalized in next 30 days.
Via Wall Street Journal – President Donald Trump has decided to postpone decisions about imposing steel and aluminum tariffs on the European Union and other U.S. allies until June 1, a senior administration official said.
In addition to announcing the delay, the White House is expected to say Monday evening that it has finalized a deal to exempt South Korea from the tariffs, mirroring details that have been previously released by the U.S. Trade Representative’s office.
There is a geopolitical strategy happening this week that is essentially under the radar.
U.S. Treasury Secretary Steven Mnuchin, USTR Robert Lighthizer, Economic Council Chairman Larry Kudlow, and the U.S. trade team are heading to China.
The outcome of their discussions connects the initiatives behind North Korea, China and NAFTA. The steel and aluminum tariffs are part of the toolbox. Only one media personality, our favorite suspicious cat, appears to understand the larger economic play and how it is being deployed.
From the U.S. perspective, NAFTA has a fatal flaw. Mexico and Canada admitted the flaw for the first time a few weeks ago. The flaw is Mexico and Canada’s exploitation of NAFTA as a backdoor into the U.S. market for Asian, mostly Chinese, manufactured products. Multinational corporations who have invested in Canada and Mexico are determined to retain the flaw.
President Trump understands that as long as Canada and Mexico can unilaterally make trade agreements with the EU and ASEAN nations, any NAFTA agreement between the U.S., Canada and Mexico is moot. The NAFTA talks are paused.
The U.S. Team now heads to China. There’s no doubt part of the objective is to begin a structural discussion that must happen for the U.S. trade team to approach closing the fatal NAFTA flaw from the source of origin. [*note* on the EU side of this issue, Commerce Secretary Wilbur Ross is leading a similar discussion. Mnuchin and Lighthizer are focused on Asia, Ross has responsibility for Europe]
President Donald Trump will be holding a joint press conference today with the chancellor of Germany, Angela Merkel. Anticipated start time 1:50pm EST
UPDATE: Video Added
Remarks by President Trump and German Chancellor Merkel earlier today in the Oval Office.