Keep an eye open for information related to President Trump shifting the economic dynamic in the late summer and fall as he takes a more intense approach toward those who have acted against U.S. interests. One such example is a restart of 10% tariffs on Canadian aluminum effective August 16th.
WHITE HOUSE – […] The Secretary has now advised me that imports of non-alloyed unwrought aluminum from Canada, which accounted for 59 percent of total aluminum imports from Canada during June 2019 through May 2020, increased substantially in the twelve months following my decision to exclude, on a long-term basis, Canada from the tariff proclaimed in Proclamation 9704.
Imports of non-alloyed unwrought aluminum from Canada during June 2019 through May 2020 increased 87 percent compared to the prior twelve-month period and exceeded the volume of any full calendar year in the previous decade. Moreover, imports of these articles from Canada continue to increase, reaching in June of this year the highest level of any month since I decided to adjust imports of aluminum articles in Proclamation 9704.
The increase in imports of these articles from Canada is principally responsible for the 27 percent increase in total aluminum imports from Canada during June 2019 through May 2020.
[…] In light of the Secretary’s information, I have determined that the measures agreed upon with Canada are not providing an effective alternative means to address the threatened impairment to our national security from imports of aluminum from Canada. Thus, I have determined that it is necessary and appropriate to re-impose the 10 percent ad valorem tariff proclaimed in Proclamation 9704, as amended, on imports of non-alloyed unwrought aluminum articles from Canada, commensurate with the tariff imposed on such articles imported from most countries.
[…] The modifications made by clause 1 of this proclamation shall be effective with respect to goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern daylight time on August 16, 2020, and shall continue in effect, unless such actions are expressly reduced, modified, or terminated. (full details)
In addition to Canada (prior NAFTA exploitation) the decoupling with China continues within a process of economic death by a-thousand paper-cuts. The Tik-Tok/WeChat move not only hits big tech, but hits hard at Beijing’s tentacles.
BLOOMBERG – U.S. President Donald Trump’s decision to ban dealings with ByteDance Ltd., owner of video-sharing sensation TikTok, appears to codify what his administration has already been warning. A second edict targeting messaging app WeChat and its parent, Tencent Holdings Ltd., seems weirdly overdue.
The executive orders issued by the White House go beyond stopping average Americans from becoming unwitting spies for the Communist Party through their postings and data. The implications could hurt not only the Chinese targets, but the U.S. companies they work with, including Apple Inc. and Alphabet Inc.’s Google.
Though TikTok and WeChat have been getting all the recent attention, the orders state that American companies cannot work with ByteDance or Tencent (though an unnamed U.S. official later stated that Tencent transactions were still OK). That clarification notwithstanding, the wording of the orders does imply that regardless of intention such bans could extend further, to include Americans advertising on dozens of products offered by either Chinese company, or to selling them cloud-storage services, or perhaps the most nuclear option: distributing their apps, even within China.
The preambles address the apps in question and the security threats they supposedly present, but let’s take a look at the orders themselves. Here’s the one for TikTok:
The following actions shall be prohibited beginning 45 days after the date of this order, to the extent permitted under applicable law: any transaction by any person, or with respect to any property, subject to the jurisdiction of the United States, with ByteDance Ltd.
The order doesn’t outline actions against TikTok, just its current owner. So if Microsoft Corp. is successful in its negotiations to buy the business, we might expect things could go back to normal for the app and its millions of users in the U.S. But ByteDance might continue to suffer, for reasons not enunciated. (read more)
Remember, by disposition President Donald Trump is a disruptor… his outlook on economic moves is tied to his overall goal and objective while holding office as President. He will go full wolverine as an ordinary part of his campaign strategy.
It’s not because he senses he might lose the election; it’s because this is the approach where Donald Trump is most confident. Unlike 2016 Trump is now in a position of power to use his office to advance against those who oppose U.S. economic interests. He will wage this war while campaigning because this war represents his objective for winning the campaign.
Look for a lot of economic confrontation to surface as President Trump advances Main Street policies and hits our economic enemies as part of his re-election campaign.