You knew it was going to happen… The U.S. Chamber of Commerce (President Tom Donohue) begins having apoplectic fits at the thought of even stronger Trump administration policies that might undercut their Chinese manufacturing investments.

The U.S. CoC is the biggest stakeholder of U.S. multinational companies doing business in China.  The Trump administration has been warning them for years to put America First in their business plans; and now with the Chinese Pandemic showing just how dangerous it is for critical manufacturing to be made in the U.S.A, chamber President Tom Donohue is pleading to keep the U.S. dependent on China.

Keep in mind, this is the EXACT SAME group who said the steel and aluminum tariffs were going to cause massive inflation driving up the price of all consumer goods and cars by thousands of dollars… It never happened; because the CoC are manipulative liars.

WASHINGTON (Reuters) – White House plans to expand “Buy America” mandates to the medical equipment and pharmaceutical sectors could worsen shortages of urgently needed medicines and delay discovery of a vaccine for the new coronavirus, over 80 business groups warned.

(more…)

Former White House Council of Economic Advisers Chairman Kevin Hassett is returning to the administration as a senior economic advisor to President Trump during the COVID-19 response.

Kevin Hassett is very sharp and a happy warrior by disposition.  Hassett was excellent as CEA Chair and no doubt his rejoining the economic team with an advisory position to President Trump will bring a great voice back to the crew.

(more…)

…there had to be a point where the value of the Wall St economy surpassed the value of the Main St economy… Part I Here

We now look forward, and consider the question: How would the multinational underwriters, the multinational financial systems, reset all transactional tables (the bookkeeping systems underneath the valuation) if the U.S. stock market was ever forced to re-value economic nationalism over multinational globalism?

To first answer the “how” question, we must visit the “why” question. Why would the multinational financial underwriters want to reset their valuations?

Obviously, the global financial system does not act altruistically. What would motivate the global wealth valuation authority (various market investment indexes) to want, or need, a reset.

The answer to the “why” question might not be as challenging as it appears.

First, there has been a seismic shift in how the world looks at the economic exploitation of multinational systems, or globalism.  See Bernie Sanders?  See those yellow vests in France?  See what happened with the U.K. Brexit referendum?  See the shrinking EU influence?  See the open/public confrontation and push-back against China? See Trump? All examples are consequences of the rise of economic nationalism.

Secondly, the original Wall Street corporate motive (during decades of mergers and acquisitions) to shift product manufacturing to Southeast Asia (ASEAN nations) was driven by a lower cost of overall business, higher profit margins and greed.

As a direct outcome economic wealth was shifted from the U.S. to ASEAN nations, and particularly China. Low wages, low regulation, cheap operational costs, incentives and subsidies from Asia equals cheap TV’s, sneakers, furniture and durable goods.

Even with high fuel prices and overseas shipping costs, there was a big difference between U.S. and ASEAN manufacturing costs.  As hundreds of U.S. Wall Street multinationals chased profits the rust-belt was created.

(more…)

A very big picture discussion requires a considerable baseline.

The stock market is not the U.S. economy; the stock market is an investment instrument that determines valuations of economic activity company by company. The valuation is considerably arbitrary, based on the determinations of the arbiters (investors). This is empirically true.

However, that said, how would the multinational underwriters, the multinational financial systems, reset all transactional tables (the bookkeeping systems underneath the valuation) …if the U.S. stock market was every forced to re-value economic nationalism over multinational globalism?    Enter “Coronavirus”.

Four years ago CTH first explained a new way to look at the U.S. economic system and how Main Street was/is disconnected from Wall Street.  We presented a metaphor to explain. Before going deeper into the discussion of tomorrow; and at the request of several people who now accept the era of “deglobalization” is upon us,  I first present that prior reference & then will use this as the baseline to describe what could come next.

There is a key phrase at the fulcrum of everything past:

…there had to be a point where the value of the second economy (Wall Street) surpassed the value of the first economy (Main Street).

What we are going to outline in part II is the possibility what happens when this natural truism is reversed.  The objective is to answer: How, specifically would Wall Street reset its evaluative systems if Main Street once again emerged as the priority?

But first, a baseline revisit is needed.

(more…)

White House trade adviser Peter Navarro outlines some of the ongoing supply chain initiatives to meet ongoing demands of the corovirus effort.  Navarro highlights the cooperation between US government and private enterprise.  WATCH:

(more…)

White House trade and manufacturing advisor Peter Navarro discusses the administration effort, a possible executive order, to shift U.S. dependency for critical health sector and pharmaceutical products back to domestic production.  [Important Discussion]

(more…)

Canada completes the North American cycle with their ratification of the USMCA to replace NAFTA. Mexico and the U.S. ratified the new trade agreement last year and January respectively.  The Canadian parliament did so yesterday.

CANADA – Canada on Friday formally approved the United States-Mexico-Canada Agreement (USMCA), taking the last legislative step to implementation of the deal to replace the 25-year-old North American Free Trade Agreement (NAFTA).

The trade deal, ratified by the Mexican legislature last June and by Congress in January, was formally ratified by the Canadian Senate Friday, and shortly thereafter received royal assent, the Canadian governor general’s approval.

The deal was passed through the legislature before Parliament shut down for five weeks in response to the coronavirus pandemic.

(more…)

The level of media opposition and snark against President Trump is simply so ridiculous at this point there’s a desperation to it.  So let us consider…
From the outset of Donald Trump’s entry into the world of politics he espoused a series of key tenets around what he called his “America-First” objectives:

1. The U.S. needed to have control over our borders, and a greater ability to control who was migrating to the United States.  A shift toward stopping ‘illegal’ migration.
2. The U.S. needed to stop the manufacture of goods overseas and return critical manufacturing back to the United States.  A return to economic independence.
3. The U.S. needed to decouple from an over-reliance on Chinese industrial and consumer products.  China viewed as a geopolitical and economic risk.

Donald Trump was alone on these issues.  No-one else was raising them; no-one else was so urgently pushing that discussion. In 2015, 2016 and even 2017, no-one other than Trump was talking about how close we were to the dependence point of no return.
Given the status of very consequential issues stemming from the Chinese Coronavirus threat; and the myriad of serious issues with critical supply chain dependencies; wasn’t President Trump correct in his warnings and proposals?
In early 2017 President Trump and his administration coined the phrase: “economic security is national security”, and the economic team set about starting a very complex process to ensure the past three decades of trade policy was reversed.
(more…)

The White House provides some background material on the purposes of the working dinner tonight between President Trump and President Bolsonaro of Brazil.
[White House Transcript] – […] SENIOR ADMINISTRATION OFFICIAL: Thank you so much. So let me put this working dinner, which is what it’s going to be tonight, in context. Obviously, President Trump will welcome President Jair Bolsonaro to Mar-a-Lago for a working dinner, along with a group of advisors in this dinner.

To put it in kind of a greater context, you know, last year, we welcomed — President Trump welcomed President Bolsonaro to the White House for a working lunch at that time. And there’s a historic list of deliverables that was announced at that time, many of which have now been followed up upon in this new historic relationship that the United States has with Brazil and the historic relationship, frankly, that President Trump and President Bolsonaro have.

(more…)

Most people are aware the Wuhan coronavirus has become an economic contagion within China. However, the scale of the contraction is only now being quantified and the data doesn’t match the visible reality.
When evaluating the data showing drops in exports from China is worthwhile to consider the lack of visible supply-chain disruption formerly predicted by global economic “analysts”.  According to Reuters; to the extent data can be gathered from within a closed communist system; total exports from China dropped 17.2% in January and February.

The lack of factory production has cut the estimated growth rate within China by half.  However, is that a cause?  – or – Is that a cover?  For decades corporations have moved to a supply chain process known as Just-In-Time (JIT) inventory.
If Chinese component manufactured goods were part of a critical corporate supply chain, and with more than 30-days of source disruption quantified, there would be impacts by now. Where are the crippled customers?  There are no measurable, demonstrable, citations for missing component parts making downstream finished goods impossible.  There are lots of anticipatory declarations, but no shortage has materialized.
(more…)