The third day of the G7 Summit in Biarritz, France, has more bilateral discussions between U.S. President Donald Trump and international leaders outside the traditional ‘group of seven‘ construct.  The topics of Macron’s selected G7 group discussion include planetary sustainability, climate change, biodiversity, oceanography and aquatic justice.
Additionally, President Trump will be holding bilateral economic meetings with President Abdel Fattah al-Sisi (Egypt) and Prime Minister Narendra Modi (India) from outside the G7; and then German Chancellor Angela Merkel from inside the G7.

At the conclusion of the summit, 9:30am EDT, President Trump will hold a joint press conference with French President Emmanuel Macron where it is likely Macron will exhaust his remaining pre-staged effort to advance the cause of multinational globalism; with customary assistance from rude left-wing American journalists.
♦ 2:30am EDT / 8:30am CEST – THE PRESIDENT participates in a bilateral meeting with President Abdel Fattal al-Sisi of the Arab Republic of Egypt, Biarritz, France
♦ 3:05am EDT / 9:05am CEST – THE PRESIDENT departs the Hotel du Palais en route to the Centre de Congrès Bellevue, Biarritz, France
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It does not take a deep geopolitical weed-walker to see the background for inviting the African delegation to the Biarritz summit.  Here we see the the G7 working session group on ‘partnerships with Africa‘:

What we don’t see in this picture is the main reason for the meeting, the 800lb panda in the room. All of these non-G7 members and meeting participants have been previously exposed to the One-Belt One-Road influence of Chinese Chairman Xi Jinping.
Combine World Bank President David Malpass into the equation, a direct U.S. nomination by President Trump now in place; mix in the visibility of Australian Prime Minister Scott Morrison; and then recognize the sudden appearance of Sebastian Pinera from Chile and Prime Minister Narendra Modi from India; and the picture of a multi-continental meeting to discuss the potential downstream ramifications of President Trump confronting China becomes visible.
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President Trump and First Lady Melania Trump depart tonight for an overnight flight to Biarritz, France to attend the G7 summit.  The first couple will arrive at 1:00pm Saturday / 7:00am Eastern.  Biarritz is 6 hours ahead of U.S. Eastern Timezone.
The original function of the G7 was to focus on economics and world trade.  President Trump and the U.S. delegation are returning the emphasis toward that original intent during this G7 summit.  At the request of President Trump, there is a G7 Sunday morning session dedicated to global economics, international trade, and economic security.

(Background Details from White House)  SENIOR ADMINISTRATION OFFICIAL: Sure. Thank you so much, [senior administration official]. And I guess it’s morning or good afternoon there, everyone. I am now in Biarritz, France. I’m the [redacted].
So what I wanted to do is start by outlining the schedule of events and various sessions that are taking place over the next few days. And then I will go through and highlight some of the key themes that the President is going to be talking about and pushing out while he is here over the weekend.
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The financial media still doesn’t get it… Obviously! Transfixed and jaw-agape at seemingly at-odds aspects to a new engagement with Beijing, the MSM financial media are clueless. They are genuinely disconnected, and have no idea what is going on.
The majority of financial pundits are perplexed at what they can see on the surface. USTR Robert Ligthizer and Treasury Secretary Steven Mnuchin are beginning discussions with Beijing. Meanwhile President Trump’s tweets seem to dismiss the potential of the deal-making. The media call this mixed-messaging; however, that’s not what this is.

Secretary Wilbur Ross was very insightful last week when he also spoke of the current U.S. perspective toward the U.S-China trade negotiation.  If you have followed the basic road-map of America-First trade policy, there’s was a very clear picture. However, as we expected, most pundits and trade analysts ignored the administration message.
Commerce Secretary Ross warned the professional investment class when he said the current objective for Mnuchin and Lighthizer was to find out if Beijing is willing to re-engage from the starting point where they left-off when talks collapsed.
That was a big tell.
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We had to wait a few weeks to see how the Beijing communists and Xi Jinping hardliners were positioned for new trade talks; and now things make sense.
Initially it seemed at odds with Beijing’s prior position to restart U.S-China trade negotiations with Vice-Premier Liu He.  The prior three months of negotiation came to a collapse when Beijing resoundingly rejected the trade terms organized by Liu He.  If the Red Dragon was so opposed to conciliatory terms, why would team Xi restart with the same negotiator?  Now it makes sense, they didn’t.

China’s Commerce Minister Zhong Shan has been assigned the role to harden the position of the communist regime and override any panda presentations by Liu He.  Vice-Premier Liu retains the panda mask, but Zhong is the ultimate control agent.  The message within Zhong’s placement tells the true nature of the Chinese position: Trade War !
Beijing attempts to downplay the position of their hard-line commerce addition, but the reality of the re-started trade discussions tells a more fulsome story.  Chairman Xi took the strategically presented bait and is going to engage in full confrontational trade war with President Trump and the U.S. team.

SCMP – The participation of China’s Commerce Minister in the latest trade discussion with the United States was “normal”, China’s Ministry of Commerce said on Thursday, playing down the eye-catching change in Beijing’s negotiating team.

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During an earlier G20 discussion of technology in a fast digital age, President Trump highlighted the potential security compromises with the new 5G communication network.  This was an indirect shot toward China and the controversy surrounding Huawei with China’s Chairman Xi Jinping only separated from Trump by Prime Minister Shinzo Abe.

It would appear President Trump is in full confrontation mode, albeit diplomatically, as the highly anticipated meeting between Trump and Xi is going to take place at 10:30pm tonight.  We are likely, heck, almost guaranteed, to see a complete reversal in position between the two leaders as President Trump wears the panda mask to cover the Eagle glare.  This truly is the dance with the dragon.
After several years of background strategy, President Trump now has Chinese Chairman Xi Jinping in a tenuous position while the ramifications of the U.S-China trade dispute unfold around him and seemingly begin to collapse the One-Belt/One-Road supply chain Beijing has carefully planned.  Actual manufacturing and investment is now retreating from China as the U.S. President continues to use access to the U.S. market as leverage to retract the tentacles of Chinese economic expansion.
President Trump has a quiver full of economic arrows that are available to him; not the least of which is the possibility of enhanced tariffs toward even more Chinese products. Beijing cannot keep subsidizing industry to keep position, they are bleeding cash and the threats against Western corporations have only made matters worse.
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There will be more detailed summaries coming later; however, here’s some of the more interesting aspects so far.   The G20 Osaka, Japan Group Picture:

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As expected the schedule of President Trump’s first set of bilateral discussions seems structured around the Indo-Pacific strategy to counter China’s expansion.  In this strategy within Southeast Asia geopolitics Japanese Prime Minister Shinzo Abe is the fulcrum for a shifting economic dynamic.
President Trump hosts a bilateral with Prime Minister Abe, and then again hosts a rather unusual trilateral meeting between himself, Abe and India’s Prime Minister Modi.  The three leaders met in a trilateral discussion at the Buenos Aires G20 in 2018.
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The G20 begins in Osaka, Japan, against the MASSIVE backdrop of the U.S-China geopolitical and economic confrontation.  As the barking spiders jump stupid in Miami, the real center of world focus is on Osaka, Japan and President Trump -vs- Chairman Xi Jinping.   There are tens-of-trillions at stake. – G20 Website –
The schedule for President Trump reflects a history of some serious background work that has led to this moment in time. Two years after the original ‘golden ticket’ tour of Asia, President Trump is reaffirming with strategic partners (PM Abe) and delivering key messages to those who yet have a role to play (PM Modi).

It is worth paying close attention to the economic nationalist coalition that President Trump has carefully assembled. [Watch Abe, Modi and Bolsonaro.] Remember, Osaka is 11 hours ahead of U.S. Eastern Time Zone.
8:25am Friday JDT / 7:25pm Thursday EDT – THE PRESIDENT arrives at INTEX Osaka, Osaka, Japan
♦8:30am Friday JDT / 7:30pm Thursday EDT – THE PRESIDENT participates in a bilateral meeting with the Prime Minister Shinzo Abe of Japan. Osaka, Japan
♦ 9:15am Friday JDT / 8:15pm Thursday EDT – THE PRESIDENT participates in a rare trilateral meeting with the Prime Minister Shinzo abe of Japan and Prime Minister Modi of the Republic of India, Osaka, Japan.  This is the second trilateral with Modi and Abe.
♦9:35am Friday JDT / 8:35pm Thursday EDT – THE PRESIDENT participates in a bilateral meeting with the Prime Minister Modi of the Republic of India, Osaka, Japan.
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~ Dance With The Dragon ~

Amid the furor from hundreds-of-thousands -perhaps millions- of protestors, Hong Kong leader Carrie Lam announces a ‘suspension‘ of the proposed extradition law that would have permitted extradition of Hong Kong residents to Chinese law enforcement.

Lam apologized on Sunday, for the way the Hong Kong government handled the proposal but she did not fully take the controversial law off the table.  The ripple effect of the proposal itself now calls into question the autonomy of Hong Kong, and many observers foresee it is now only a matter of time before China takes a tighter grip.
Currently Hong Kong is not subject to the same economic consequences within the U.S-China confrontation.  As long as Hong Kong is considered ‘autonomous’ they remain detached from U.S. tariffs and other measures targeted to China.  However, if China breeches the increasingly unclear barriers, judicial and legal systems intended to provide that autonomy – well, then the situation could change.  Hong Kong is tenuous at best.
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Against the intense leverage being applied by President Trump, last week Beijing doubled-down and threatened punishment against any company that would leave China and begin manufacturing elsewhere.
The totalitarian response was predictable and expected.  However, also predictable was the corporate response to the threats.
As we shared:  “China is counting on prior western investment being so significant that a corporation will be reluctant to withdraw. However, in this outlook Beijing seriously underestimates the free market because communist controlled China doesn’t understand the action of a inherently free market.
The first loss is the best loss. If walking away from an investment provides more financial security and stability than attempting to retain a grip on a tenuous position – corporations will walk away.” (more)
Now today – “Nintendo Moves Some Switch Production Out of China”:

TOKYO— Nintendo Co. is shifting some production of its Switch videogame console to Southeast Asia from China to limit the impact of possible U.S. tariffs on Chinese-made electronics, said people who work on Nintendo’s supply chain.
It is another example of manufacturers adapting to the tariff threat. Taiwan’s Foxconn Technology Group said Tuesday that it was ready to move assembly of Apple Inc.’s iPhones out of China if necessary, and Japan’s Sharp Corp. , which is controlled by Foxconn, said last week that it planned to move production of personal computers to Taiwan or Vietnam.

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