National Economic Council Chairman Larry Kudlow appears on Fox News immediately following the announcement that President Trump and Chairman Xi will have an “extended meeting” at the G20.
While previously pledged support for the Northern Triangle region related to Homeland Security and combating organized crime will continue, the State Department suspends any further financial assistance ($200 million) until the migration crisis is resolved.
Charles Payne, filling in for Maria Bartiromo, interviews White House Manufacturing and Trade Policy advisor Peter Navarro. Unfortunately the interview begins with a discussion of tariff polling…. The vast majority of Americans have no understanding of the impact of tariffs and/or MAGAnomic policy; they only know the economic outcomes they can feel.
Mr. Navarro walks through how tariffs interact with global supply chains and the financial manipulation by multinational corporate interests.
WHITE HOUSE – President Donald J. Trump will welcome Prime Minister Justin Trudeau of Canada to the White House on June 20, 2019. The visit will reaffirm America’s deep partnership with Canada, and allow the two leaders to address opportunities and challenges related to expanding bilateral cooperation.
President Trump and Prime Minister Trudeau will discuss the shared economic interests of their countries, including the United States-Mexico-Canada Agreement and opportunities to drive more growth and create jobs in both the United States and Canada. The two leaders will also discuss the upcoming G20 Summit, which will take place from June 28 to 29 in Osaka, Japan. (read more)
Last month, Manny Montenegrino had a good discussion with Ezra Levant about the current issues with the relationship between Justin from Canada and President Trump. Against the backdrop of this upcoming visit, it’s worth revisiting:
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If you’ve got the time this is well worth watching. Larry Kudlow is Chairman of the National Economic Council and delivers a strong voice amid the economic team of assembled by President Trump.
Kudlow provides value because he comes from the Wall Street economic punditry networking group that just doesn’t understand MAGAnomics, or ‘America First’ Main Street policy. President Trump has taught Kudlow a great deal. So Kudlow’s value is heightened by his ability to explain Trump’s Main Street policy to his old Wall St. tribe; who genuinely have no concept of Main Street policy (hence, they’re always puzzled).
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.
There’s always a larger geopolitical dynamic when you assess the economic alliances that President Trump puts together…. Always and underlying plan… Sometimes it just takes time to surface.
As we have noted, even going back to 2017, Japanese Prime Minister Shinzo Abe always appeared to be the fulcrum for President Trump’s Indo-Pacific strategy.
Remember the trip to Japan as honored guests of Emperor Naruhito and Empress Masako at the Imperial Palace? Remember last month’s (May 25th) unprecedented reception with the titans of Japanese business? Remember the private reception set up by a very nervous U.S. Ambassador William F. Hagerty? A reception with the most influential business CEO’s in Japan and Southeast Asia?
Well…
TOKYO (Reuters) – Japan’s Tokyo Electron, the world’s No.3 supplier of semiconductor manufacturing equipment, will not supply to Chinese clients blacklisted by Washington, a senior company executive told Reuters.
The decision shows how Washington’s effort to bar sales of technology to Chinese firms, including Huawei Technologies, is ensnaring non-American firms that are not obliged to follow U.S. law.
Earlier this morning President Donald Trump called in to CNBC to discuss a variety of subjects including: the ongoing trade negotiations with China; the threat of tariffs on Mexico over illegal immigration; the federal reserve; the status of the economy; the duplicity of the U.S. Chamber of Commerce; collusion by democrats; the upcoming G20 summit in Japan, and much, much, more.
During the interview President Trump directly calls out the U.S. Chamber of Commerce for their anti-American position and self-interested advocacy for Wall Street multinational corporations. Additionally, President Trump pushes back against the claim that tariffs lead to higher U.S. prices, citing examples of China subsidizing their exports and low U.S. inflation. Must Watch:
Appearing on Fox News Sunday acting Homeland Security Secretary Kevin McAleenan discusses the approach by President Trump to impose import tariffs on Mexico if the administration of President Lopez-Obrador does not fulfill their pledge.
Along with outlining the Mexican agreement, McAleenan notes President Trump is absolutely willing to impose the tariffs on Mexico if there is no substantive and immediate improvement to stem the flow of Central American migrants.
The border and migration “agreement” with Mexico is a smart move by President Trump. If you worry that Mexico won’t take any action, well, don’t underestimate the dynamic President Trump just put into play.
Financial investment flows based on expectation, probability and risk management. If you don’t think Mexico will follow-up with their end of the bargain; then you are predicting the tariffs will reappear in 90-days.
Overlooked by most of the financial pundits President Trump has pre-positioned risk management actuaries with the basis for their analysis and internal investment advice. In a similar move last year, President Trump suspended tariffs against China based on an agreement (G20 summit in Argentina). After several months and a 150 page initial agreement of principle, China walked away from their prior promises and terms. The tariffs against China were immediately implemented at the previous rate.
That China example with tariffs is now the baseline for all multinational investment to consider as they review their current exposure in Mexico. If any financial investor (bank or corporation) believes Mexico will not adhere to the border/migration agreement, then by extension they are accepting/predicting the Mexican tariffs will take effect in 90-days.
Put another way… President Trump has just given notice to all global business interests to organize their financial affairs toward Mexico within 90 days.
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