President Donald Trump welcomes Japanese Prime Minister Shinzo Abe for a summit at Trump’s Mar-a-Lago estate in Florida. The President and PM Abe have a long-standing friendship.
Among the topics for the summit will be ongoing U.S./Japan trade initiatives, and important discussions about security for Japan as talks continue between South Korea (Moon Jae-in) and North Korea (Kim Jong-un).
There was a possibility widely discussed and debated a year ago, where President Trump’s geopolitical doctrine of using economic leverage for national security would create the “leverage” for a denuclearized North Korea. And eventually the “economic” value for a unified Korean peninsula.
Seven months ago we wrote: “Turning rockets into ploughshares is a good strategy.”
Stunningly today, a significant step in that direction is being outlined.
(Via CNBC) North and South Korea are in talks to announce a permanent end to the officially declared military conflict between the two countries, daily newspaper Munhwa Ilbo reported Tuesday, citing an unnamed South Korean official.
Ahead of a summit next week between North Korean premier Kim Jong Un and South Korean President Moon Jae-in, lawmakers from the neighboring states were thought to be negotiating the details of a joint statement that could outline an end to the confrontation.
In retaliation for $50 billion in U.S. trade tariffs against Chinese imports, China laughably hits back with $3 their own billion tariffs against the U.S. According to most reporting Beijing has selected U.S. pork and scrap aluminum as targets for a 25% tariff, along with wine and fruit tariffs around 15%.
It should be emphasized the approach by China is rather ridiculous considering the Chinese government purchased the largest U.S. pork manufacturer Smithfield in 2013 for $5 billion; at the time the purchase price was 30% more than the company was worth. Smithfield, now a Chinese company, represents 25% of all U.S. pork products.
Do you really think China is going to not import it’s own pork products… or subject them to a domestic tax? Think about it. It’s ridiculous. China knows they have ZERO leverage in a trade-dispute with the U.S., they cannot afford to lose access to the U.S. market.
The example of Smithfield foods is exactly what we have outlined in how China cannot sustain itself and needs to control the assets of foreign countries. Hence, their one-road/one-belt program for securing products and raw materials. China is a dependent economy, they need to exploit global trade to survive. China cannot feed itself. This is the inherent flaw within their short-sighted authoritarian government-controlled economic model.
Again, for emphasis, the Chinese government underwrote the purchase of Smithfield foods in 2013. They paid 30% more than the company was worth because they were securing access to food just like they would any other raw material (uranium, minerals, etc). China also purchases U.S. politicians to retain their ability in this regard.
Now look at the cartoon from the unofficial Chinese state-run media today:
It was only six months ago when the international media and U.S. left-wing pundits were proclaiming how we were on the cusp of thermonuclear war with North Korea. As outlined HERE there was almost no-one paying attention to the approach taken by President Donald Trump to creating the “Magnanimous Panda” outcome.
Well, today those same media are reporting on North Korean leader Kim Jong-Un meeting with Chinese President Xi Jinping and committing to a denuclearized Korean peninsular:
SEOUL, March 28 (Yonhap) — North Korean leader Kim Jong-un has visited China at the invitation of President Xi Jinping and reaffirmed his commitment to denuclearization during their first summit, the two countries’ media said Wednesday.
The North’s leader made an “unofficial” visit to China from Sunday to Wednesday, accompanied by his wife Ri Sol-ju and key officials, including de facto No. 2 figure Choe Ryong-hae, according to the North’s state-run radio.
Commerce Secretary Wilbur Ross appears on Fox Business News for an extensive interview with Maria Bartiromo. The interview covers a wide spectrum of important topics attached to the U.S. economy and ongoing trade deals. Two great video segments for the interview will get you up to speed on ongoing initiatives:
♦Segment #1 outlines the upcoming announcement of KORUS, the South Korea and U.S. trade deal. Additionally, Secretary Ross discusses the steel and aluminum tariffs and how they enmesh in the larger objective of the ongoing trade negotiations with China:
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♦Segment #2 outlines more on the aluminum and steel tariffs; ongoing trade talks with Europe; efforts to renegotiate NAFTA, and the possibility of a deal being reached; Saudi Arabian investment in the U.S. and the Commerce Department plans to bring back a citizenship question in the 2020 Census.
Perhaps as early as this week we should anticipate hearing about completion a significant trade agreement with South Korea. The deal is known as “KORUS” (KOR+U.S.), and has been in negotiations for over a year.
Part of the recent agreement within the auto-sector of the deal, between Moon Jae-in and President Donald Trump, via Lighthizer and Ross, is an exemption of U.S. steel tariffs for South Korea in exchange for a doubling of U.S. auto exports; from 25,000 to 50,000 American made cars, per U.S. automaker, per year. (link)
The results within KORUS exhibit the intended outcome of the global tariff proposal from President Trump as leverage to enhance the administration policy of reciprocity. The world is taking notice, and China is now beginning to signal their understanding of President Trump leading the international discussion of reciprocal trade.
The unspoken background is that all nations, who have acquiesced to the overwhelming demands of China’s trade position, are now beginning to reassess the value of President Trump confronting the equation head-on. Ultimately it is beginning to sink-in that all nations can benefit from correcting a trade imbalance within their own position. In essence, U.S. President Trump is moving the entire global trade dynamic.
Author of “The Coming Collapse of China”, Gordon Chang, discusses the effect of President Trump’s tariffs on China and the epic battle ahead. Last night China announced their feeble retaliatory actions – SEE HERE. A professionally nervous Maria Bartiromo, frames a series of questions from the perspective of Wall Street.
Fortunately Gordon Chang understands the Red Dragon, and more importantly understands Chinese Chairman Xi Jinping’s geopolitical goals through economic conquest. Mr. Chang is one of the few people who appear regularly in media and know the truth behind the Panda Mask.
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People often talk about the ‘strength’ of China’s economic model; and indeed within a specific part of their economy -manufacturing- they do have economic strength.
However, the underlying critical architecture of the Chinese economic model is structurally flawed and President Trump with his current economic team understand the weakness better than all international adversaries.
China is a central planning economy. Meaning it never was an outcropping of natural economic conditions. China was/is controlled as a communist style central-planning government; As such, it is important to reference the basic structural reality that China’s economy was created from the top down.
This construct of government creation is a key big picture distinction that sets the backdrop to understand how weak the economy really is.
It is going to take a heck of a lot of deep-weed education to cut through the economic gaslighting of the multinational corporations, Wall Street and their purchased institutional media. However, I give the White House team (Secretary Ross, Secretary Mnuchin, Ambassador Lighthizer and Adviser Peter Navarro) a measure of strong credit for beginning:
WHITE HOUSE: Measurement of trade flows is usually an uncontroversial topic relegated to macroeconomic classrooms and government technocrats. Recent debates about trade policy have brought the topic out of the shadows, and we hope to clarify how economists measure trade.
Every day there are international transactions for tens of thousands of different products. Physical goods, interchangeably called merchandise, are what usually comes to mind first. However, an increasing share of international trade is in services that are not physically transported between countries—think about financial insurance, licensing of trademarks, or services like consulting.
Secretary of State Rex Tillerson did an excellent job representing the professional and deliberate diplomatic approach of the U.S. and President Trump administration. His personal view toward foreign service on behalf of the U.S. was exemplary, and deserves high praise.
Having said that, as President Trump stated earlier today, there was also more than a tinge of disunity between the advocated views of Tillerson and the views of the Commander in Chief toward economic national security. At times the fractures between policy perspectives were visible. Over time those differences became more obvious.
As Secretary of the DoS Rex Tillerson supported the Paris Climate Treaty; the President did not; Secretary Tillerson supported the Obama administration’s Iran deal; the President did not; Tillerson was more apologetic toward lax immigration policy; the President is not; and there were other visible departures visible surrounding the use of economic leverage to achieve national security advancements, specifically on the issue of China and North Korea policy.
This is just too rich. Seriously.
From the insufferable Iran deal… to the appeasement “Russian Reset”… to the Libya fiasco… to the rise of ISIS… to installing the Muslim Brotherhood in Egypt… to the explosion of terrorism in Yemen… to civil war in Syria… to the crisis in Ukraine… to the 2010 State Department apology tour (WikiLeaks cables scandal)… to their inability to stop North Korean nuclear ambitions and the rise of China as an influential power… there were/are zero foreign policy successes in eight years of the Obama administration.
There was not a single Obama foreign policy initiative that had any success. Every single place where the prior administration put their attention, the results were complete failure, crisis, chaos and worse conditions in the aftermath. That’s the 2009-2017 reality.
Today it is discovered that fifty of the most well known Obama foreign policy officials have come together to form a think-tank group called “National Security Now“. Their singular mission is to be the “resistance” to the Trump administration’s foreign policy. You have to see the names to recognize how bad these people were at policy:
♦Ben Rhodes ♦Susan Rice ♦Samantha Power ♦Denis McDonough ♦Tom Donilon ♦Tony Blinken ♦Jen Psaki and more. The list is a veritable ‘who’s-who’ of short-sighted foreign policy, ineptitude and diplomatic failure. There’s literally not a success between them, and they are uniting together to advocate against President Trump.