Jumpin’ ju-ju bones – The Trump administration via U.S. Trade Rep Robert Lighthizer and Commerce Secretary Wilbur Ross won a massive $7.5 billion award as an outcome of the World Trade Organization agreeing with the U.S. against the EU and Airbus subsidies.  The WTO arbitrators decision is final and cannot be appealed.
This win sets the stage for President Trump to deploy $7.5 billion in countervailing duties against products from the EU.  Keep in mind, a final WTO ruling means the EU cannot retaliate against any WTO-authorized countermeasures.  The downstream ramifications are very significant. Think about it: at 25% the U.S. could tariff $30 billion in EU goods.

Man, talk about serendipitous timing… But first, here’s the press release from Robert Lighthizer:

Washington, D.C.–  The United States has won the largest arbitration award in World Trade Organization (WTO)  history in its dispute with the European Union over illegal subsidies to Airbus.  This follows four previous panel and appellate reports from 2011-2018 finding that EU subsidies to Airbus break WTO rules.
Today’s decision demonstrates that massive EU corporate welfare has cost American aerospace companies hundreds of billions of dollars in lost revenue over the nearly 15 years of litigation.

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Earlier today President Trump joined in celebration with the Scalia family to deliver remarks from the Oval Office during the swearing-in of Labor Secretary Eugene Scalia.
The President also took a question from the media pool [Video and Transcript Below]

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[Transcript] – THE PRESIDENT: Well, this is a very big day. We just had the swearing-in. We just had the most beautiful ceremony. I don’t know if anybody was there, of you, but — our new head of the Joint Chiefs of Staff. And now we have Department of Labor. So, that’s big stuff. This is a big day.
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National Economic Council Director Larry Kudlow discusses the forecast for ratification of the USMCA against the backdrop of Pelosi’s announced focus on impeachment.
Additionally, Kudlow discusses the status of Chinese trade negotiations and the recently affirmed trade deal with Japan.

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 WASHINGTON (Reuters) – The U.S. House of Representatives is proceeding with efforts regarding the Trump administration’s trade deal with Mexico and Canada, U.S. House Speaker Nancy Pelosi told reporters on Thursday, saying House Democrats had discussed the pact a day earlier.
“We’re moving ahead on the U.S-Mexico-Canada agreement,” Pelosi said at a news conference. “We’re, again, hoping to be on a continuing path to ‘yes’” to approve the deal aimed at replacing the North American Free Trade Agreement (NAFTA). (link)
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Last week U.S. economic data included the Labor Department’s report on initial filings for unemployment benefits, at historically low levels. Also last week, the Commerce Department reported the U.S. housing market (new homes and permits) was the strongest since 2007. Then came the Philadelphia Fed’s index of manufacturing business activity in September, more than doubling estimates as factories continue to expand.  And if that wasn’t too much winning, the Commerce Department then announced August retail sales growth was double expectations.  Main Street USA is very strong.

None of the economic data supports the almost month-long ‘recession narrative’ pushed by financial pundits and media narrative engineers; and next week the second estimate of Q2 GDP growth will be released. Attempting to retain the smallest remaining whiff of credibility, the Bloomberg economists now announce they’re cancelling the recession.
Yes, in a piece titled “Hold That Recession – U.S. Indicators are Trouncing Forecasts“, Bloomberg admits the economy doesn’t match their gloomy narrative:

(Bloomberg) — The U.S. economy is outperforming expectations by the most this year, offering a fresh rebuttal to last month’s resurgent recession fears fueled by the trade war and a manufacturing slump.
The Bloomberg Economic Surprise Index has reached an 11-month high after four indicators released Thursday, including existing home sales and jobless claims, each surpassed expectations.

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This is interesting.  CNN’s Martin Savage traveled to the democrat stronghold in Minnesota to talk about the 2020 election.  Much to the angst of the production unit they discover thousands of Minnesota voters have switched to support President Trump.

“Thousands of people switching and changing their politics?”  ….Yes, why yes they are.

The two key issues highlighted in the interviews surround President Trump’s economic policies: “he’s the party for jobs”; and President Trump’s immigration policies: “Ilhan Omar is not popular here.”   WATCH:

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Michael Pillsbury traveled to Hong Kong recently to help explain the goals and objectives of President Trump’s U.S-China trade position.  During an interview, Mr. Pillsbury warns Beijing interests not to interpret the current U.S. position as aggressive, because the dragon has yet to see the severe side to Trump’s position.

During an interview with the South China Morning Post, Pillsbury points out there are a great many more ways that President Trump is prepared to respond if the combative trade position from China remains hostile to any concessions.  This first option was their best option.  However, should they choose further trade conflict, President Trump will happily oblige.
CTH research on Trump’s outlook, vis-a-vis China, has led us to believe there is no upper limit to the economic weapons President Trump is willing to deploy; and considering that Pillsbury can be relied upon to deliver honest, accurate and deliberate remarks about the White House position, these warnings from a close advisor to the President should be weighted accordingly.

(South China Morning Post) – The United States is set to ramp up the pressure on China if a trade deal is not agreed soon, a key White House adviser said, adding that Washington has so far imposed only “low level tariffs” on the Asian giant.

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Fox News host Maria Bartiromo had Kevin McCarthy and Larry Kudlow on Fox Business to discuss the status of ratification for the USMCA agreement.   After McCarthy outlines the politics of Nancy Pelosi intentionally holding back the ratification vote, and states if the agreement is not passed prior to Thanksgiving it will not be done, Larry Kudlow follows up with a more optimistic outlook.

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Keep in mind, Speaker Pelosi doesn’t know that close trade followers are aware of her deal with Justin Trudeau to hold back on ratification in an blatantly political effort. Here’s Kevin McCarthy’s full interview.
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Promises made – Promises Kept…

President Donald Trump delivers remarks to the media today while touring border wall construction in Otay Mesa, California.   As a builder himself, the president outlined some of the more particular details of the construction project including the difference between compressive strength and tensile strength of 5,000/lb concrete.  There is apparently some additional aspects to the wall that are kept secret (they’re wired for sound).

The President was briefed on the project by Douglas Harrison (Acting San Diego Sector Chief Patrol Agent, United States Customs & Border Protection); Kathleen Scudder (San Diego Sector Deputy Chief Patrol Agent, United States Customs & Border Protection); Scott Garrett (San Diego Sector Division Chief, United States Customs & Border Protection); James O’Loughlin (Border Wall Program Lead, Emergency Action Programs, Department of Defense), and various local officials.
[Video Below, Transcript Will Follow]

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This is a topic we have previously discussed.  The current status is unfortunately what CTH previously predicted….  The consequences here are very serious.

Representative Denver Riggleman (R-Va.), a member of the House Financial Services Committee, claims a significant number of House Democrats are ready to vote to approve the USMCA trade deal.  However, Nancy Pelosi is holding back the vote.

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Everyone agrees that passage of the USMCA would provide leverage for the U.S. position in both China and EU trade negotiations.  Representative Andy Barr says despite a likely 300+ vote of support, he believes Pelosi is stalling to block that exact leverage.
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The dance with the dragon is a complex geopolitical relationship between two large economies. China’s view within the dynamic is shaped by their own internal ideology and outlook.  The panda mask dynamic was/is strategic and has served them well for decades; but now President Trump -while engaging a structural confrontation- has used the panda strategy against Beiing’s interests.  China is flummoxed.

Each of President Trump’s trade team members have a specific role; each member also has a specific opponent within the dance:
♦Peter Navarro is the blue-collar hawk. He focuses on the the administration’s Wall Street adversaries; and the U.S. multinationals -American companies- who have aligned their interests with Beijing.  Navarro’s focus is internal to U.S. interests.  Navarro confronts  U.S. corporations, Wall Street interests, who are working against Main Street.
♦Treasury Secretary Steven Mnuchin carries the economic financial weapons (represents the dollar), and he faces toward global adversaries (IMF, World Bank, European Central Bank etc.) who have also aligned their interests with Beijing and the status quo.
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