Counsel of Economic Advisers Chairman Kevin Hassett appears on CNBC to discuss his decision to leave the White House; the purposeful importance of President Trump’s tariff threat on Mexican imports; and why overall trade reform is important.

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When Kevin Hassett notes best models without interest rates, and the perplexing discussion centers the appearance of two distinct economies, they are talking ABOUT THIS.  MAGAnomics is what happens in “the space between” Wall St and Main St.
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The hypocrisy and ideology of the Mexican position would indicate the tariffs are certain to take place.  Factually, after Mexico has made their “red line” position clear, one could argue there’s no reason to go through the graduated timeline; the U.S. might as well just start applying the full 25% tariff amount on June 10th.

WASHINGTON/MEXICO CITY (Reuters) – Mexico said on Monday it would reject a U.S. idea to take in all Central American asylum seekers if it is raised at talks this week with the Trump administration, which has threatened to impose tariffs if Mexico does not crack down on illegal immigration.
[…] Mexican Foreign Minister Marcelo Ebrard said the country was committed to continuing to work to keep migrants from Central America from reaching the U.S. border.

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Acting chief-of-staff Mick Mulvaney appears on Fox News to answer Chris Wallace question about whether President Trump is serious about punishing Mexico with tariffs for their lack of action on illegal central American migrants.
Mulvaney skewers Wallace and predicts the tariffs will hit. Additionally Mulvaney sets the record straight on the impact of tariffs on consumers.
Generally, watching a Chris Wallace segment is worthless; however, Mulvaney’s linguistic Ginsu delivery is so good, this one is worth watching:

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Well, this doesn’t come as a surprise.  Hoping to keep the borders open and fend off the Trump tariff’s on Mexican imports, Mexico’s President Lopez-Obrador (AMLO) enlists the help from Tom Donohue and the U.S. Chamber of Commerce.

MEXICO CITY (Reuters) – Mexico’s president and the top U.S. business lobbying group called on President Donald Trump to back down from a threat to impose punitive tariffs on Mexican imports, in a dispute over migration that could shock Mexico’s economy.
[…] The ultimatum from Trump is the biggest foreign policy test to date for Mexican President Andres Manuel Lopez Obrador and a tall order for Mexican security forces struggling not only to combat migrant flows but also to fight a record level of gang violence and homicide.

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As Wall Street’s Big Club politicians go bananas over the pending tariffs on Mexico, House Judiciary Committee ranking member Doug Collins appears on Fox morning to discuss his own visit to the border, the growing crisis and the political intransigence in DC.

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The White House gave some advanced information about President Trump and First Lady Melania Trump’s upcoming state visit to the United Kingdom; which includes trips to Ireland and France.  [Trip Date: June *3rd, 4th, 5th and 6th.]

[*Anticipate Pelosi announcing “impeachment inquiry” on Monday June 3rd]

[White House] PRESS OFFICER: Good afternoon, everyone. Thank you very much for joining us for this background call on the President’s upcoming trip to the UK, Ireland, and France. This will be on background, attributable to a senior administration official.
Joining us today is [senior administration officials]. They will provide a brief trip overview at the start, and then we’ll be able to take your questions.
So at this point, I’ll turn it over to [senior administration official].
SENIOR ADMINISTRATION OFFICIAL: Thank you so much. I’ll just make a couple of brief remarks and then turn over to my colleague for some of the details.
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Jumpin’ ju-ju bones, President Trump has just announced an emergency tariff program on all Mexican goods that begins on June 10th at 5% and continues to increase monthly until Mexico takes action to halt illegal Central American migration.
Tariff Schedule: ♦5% effective June 10th ♦10% effective July 1st ♦15% effective August 1st ♦20% effective September 1st ♦25% effective October 1st, and continuing therein until Mexico takes action to stop the flow of Central American migrants.

Details from the White House: As everyone knows, the United States of America has been invaded by hundreds of thousands of people coming through Mexico and entering our country illegally.
This sustained influx of illegal aliens has profound consequences on every aspect of our national life—overwhelming our schools, overcrowding our hospitals, draining our welfare system, and causing untold amounts of crime. Gang members, smugglers, human traffickers, and illegal drugs and narcotics of all kinds are pouring across the Southern Border and directly into our communities. Thousands of innocent lives are taken every year as a result of this lawless chaos. It must end NOW!
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Vice-President Mike Pence traveled to Canada today as an emissary of the Trump administration to support Canadian passage of the USMCA trade agreement.
According to Reuters media reports the vice-president was focused on the importance of a strong North American economic alliance, and how a united tri-lateral agreement can form a geopolitical hedge against influence from communist China and socialist ideologies in Cuba and Venezuela. Justin from Canada expressed his perspectives over diminished women’s rights, U.S. abortion laws, the important contributions of a transgender workforce, climate change and the NBA championship playoffs…. Yes, really:

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Meanwhile in Mexico: “The Senate, controlled by Lopez Obrador’s National Regeneration Movement (MORENA) and its allies, should approve the United States-Mexico-Canada Agreement (USMCA) once it has passed through congressional committee, the president said.” (link)
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Today is a very good day.  Despite the professional punditry and their doomsayer predictions of Trump tariffs driving up costs for consumers, exactly the opposite is happening.
Despite large growth in the Main Street USA economy; and despite large wage gains by U.S. blue-collar workers; inflation remains low and mysteriously detached from the Fed monetary policy.

WASHINGTON (Reuters) – U.S. inflation was much weaker than initially thought in the first quarter amid a sharp slowdown in domestic demand, which could cast doubts on the Federal Reserve’s view that the benign price pressures were largely because of temporary factors.
The personal consumption expenditures (PCE) price index excluding the volatile food and energy components increased at a 1.0% rate last quarter, the government said. The so-called core PCE price index, which is the Fed’s preferred inflation measure, was previously reported to have risen at a 1.3% pace.
The increase last quarter was the smallest in four years and pushed inflation further below the Fed’s 2% target. (read more)

They just don’t get it.  For over three years CTH has been explaining how President Trump’s maganomic policy will reverse three decades of stagnant Main Street economic growth.  Today the Bureau of Economic Analysis (BEA) once again confirms our earlier predictions, and releases the data showing inflation is essentially nonexistent.
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Steve Bannon is in Paris, France as the nationalist wins in the EU parliamentary election results fill the headlines.  Additionally, Bannon gives his opinion on the strategic importance of President Trump’s recent state visit to Japan.

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“Economic security is national security“… I would emphasize the strategy within the multi-layered geopolitical economic reset is all President Trump.  The restoration of a sovereign U.S. economy, and the increases in Main Street American wealth, is Donald Trump’s primary agenda item.  The President listens to advisers on a variety of economic and trade matters, but the America-First policy strategy is all his.
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