Posted originally on Feb 4, 2025 by Martin Armstrong
Panama was presented with an ultimatum to control foreign Chinese influence in the Panama canal or face retaliatory measures. While retaliatory measures were not specified, the State Department said that Panama was violating the Treaty Concerning the Permanent Neutrality and Operation of the Panama Canal, and the US would move to protect itself. Secretary of State Marco Rubio met with Panamanian President José Raúl Mulino on Sunda,y and Panama caved to US pressure.
Panama is terminating standing agreements with the Chinese government before their initial end dates in 2027 and 2028. The “Belt and Road Initiative” (BRI) will not be renewed. Panama became the first Latin American nation to join the BRI in 2018 after cutting all diplomatic ties with Taiwan the year prior. China invested around $1.4 billion on infrastructure for the canal and port expansions. Panama said it will look into leaving the BRI earlier if possible.
Panama’s president said he is focused on strengthening ties with the United States and attracting new US investments. Some believe Panama heeded to Trump’s warnings swiftly to avoid the US taking back the canal. The US president long accused Panama of overcharging US vessels despite 66% of traffic being linked to US ports.
The Panama Canal was an engineering masterpiece that changed world trade. Theodore Roosevelt called the canal a “highway of civilization.” Prior to the canal, trade from the Atlantic to the Pacific Ocean would be routed around South America, a trip that could take up to two months. The US found the thinnest strip of land to create a shortcut for trade. The area of the Panama Canal was technically controlled by Colombia at the time, but Colombia was not interested in the project and permitted the French to build a shortcut in 1882. The French failed to build a successful canal and the project went bankrupt before completion.
America intervened and helped Panama form a new government and reclaim its impudence in 1903. Panama gifted the US that much-desired strip of land in 1904, and the US paid the French $40 million for the remainder of the canal. It took $375 million ($12 billion) to complete the canal, but the return was admissible. This is no simple passage but a series of locks and water chambers that slowly fill to permit ships to pass through the artificial river. The project, completed in 1914, was hailed as a massive success. Shipping time between New York and San Francisco was cut by 8,000 miles. Investors rushed to back the remainder of the project, and about 5% of all world trade began passing through the Panama Canal.
Trade through the canal continued to increase each year, providing the US with notable revenue. The passage also provided a strategic military channel during World War II.
The Torrijos-Carter Treaties of 1977 led to Panama regaining full control of the canal by 1999. Former President Jimmy Carter wrote in his personal diary that it was “obvious we cheated Panama out of their canal.” Yet, the US not only funded the project but assisted Panama in gaining independence. Carter believed the US would viewed as less imperialistic by “returning” what never belonged to Panama. Panama vowed to maintain a neutral stance on the canal but part of the treaty did permit America the right to defend the canal.
This treaty was one of the worst deals in modern US history. Carter gave away a crucial economic and military asset, weakening America’s global position, and still agreed to help Panama maintain the canal. America now must pay to use the very canal it built, with 40% of US container traffic passing through the canal and paying ever-increasing tolls. Panama was not maintaining their end of the bargain by entering the BRI. This comes down to a broader issue of the disastrous 1977 Torrijos-Carter Treaty that cannot be easily or legal undone.
Posted originally on Feb 4, 2025 by Martin Armstrong
The Mexican peso and Canadian dollar both saw notable declines right before the 25% tariffs were implemented. The US markets fell in early trading as CONFIDENCE rapidly declined with these tariff threats. We saw the Dow drop over 650 points early Monday, only to turn around after it was stated that tariffs on Mexico would be postponed. The Dow dropped so quickly simply because foreign capital began leaving the US markets. Canada and China plan to take matters to international court. Mexico has decided to placate Trump to buy time, sending 10,000 Mexican troops to secure the US southern border.
“It was a very friendly conversation wherein she agreed to immediately supply 10,000 Mexican soldiers on the border separating Mexico and the United States,” Trump said in a social media post on Truth Social. “These soldiers will be specifically designated to stop the flow of fentanyl, and illegal migrants into our country.” Mexico’s President Claudia Sheinbaum has asked Trump to delay tariffs by one month.
The same exact situation happened under the last Mexican administration of Andrés Manuel López Obrador. Trump threatened tariffs and Obrador sent the National Guard to the border. Yet, this president seems less likely to work alongside Trump for long.
Now in 2024, Mexico sent 78% of ALL their exports to the United States. That’s an astounding 37% of Mexico’s GDP. One may think that Mexico would be forced to agree to anything presented by Trump but that is not the case. Mexico dethroned China to become the top exporter of goods to the US in 2023, exporting $475.6 billion to the US in 2023, a 5% YoY uptick. Mexico had stated that they would implement retaliatory tariffs but never laid out an exact plan. Could they be using this month to buy time?
Trump has not addressed the reason that US manufacturers are moving to Mexico. Now there are new challenges. So you can make it in America, but who will you sell to when everyone is paying a markup? Nations once lined up to sell to Americans, but rest assured they will look to offload their goods elsewhere with such stiff penalties. They sold to Americans and were forced to use the dollar. And who will buy? Consumers hide their wallets amid uncertainty and this entire debacle is causing massive volatility internationally.
As I mentioned in an earlier post, Trump and his administration fail to comprehend that asset shortages lead to inflation. We will have shortages or a speculative boom, causing currency declines and leading to more inflation. Everything is connected. Creating unemployment outside the US will lead to fewer consumers and declining business, and the US companies will be forced into layoffs. The US economy will shrink as the world economy shrinks and this entire tariff debacle will be remembered in history for igniting the global recession if not outright depression in some nations.
Posted originally on the CTH on February 3, 2025 | Sundance
On January 20, 2025, President Donald J. Trump issued an Executive Order addressing what it means to be “subject to the jurisdiction” of the United States. See Exec. Order No. 14160, Protecting the Meaning and Value of American Citizenship (Citizenship EO or EO). That EO recognizes that the Constitution does not grant birthright citizenship to the children of aliens who are unlawfully present in the United States or the children of aliens whose presence is lawful but temporary.
Immediately, Washington State applied for an emergency injunction which was granted by a judge. The DOJ, now under the Trump administration, has filed a response to the court requesting the injunction be removed. [SEE Response HERE]
With everything going on I have not yet had time to sit down and read the full response. However, I am told by people close to the issue that the response is well articulated, grounded in constitutional law and solid.
Due to the subject matter, this case is likely on track to reach the Supreme Court for a historic ruling. The timing will depend on how the DOJ responds to further litigation and judicial decisions. Inevitably, this is going to be a case that Attorney General Pam Bondi will have to engage with.
The issue of birthright citizenship is somewhat of an uphill battle for the Trump DOJ. However, the core issue is not complicated, can a child gain citizenship through the process of birth to illegal alien parents simply by being located in the USA at time of birth?
Can national citizenship be granted despite non-legal status of the parents and despite non-approval of the nation state? That’s the core issue behind birthright citizenship.
Posted originally on the CTH on February 3, 2025 | Sundance
Oh, this is a little funny. The vertically challenged Ukrainian president who dresses like a UPS driver, is now likely to make a deal with President Trump where Ukraine puts up their “rare earth minerals” as collateral for taxpayer funds received by the United States.
Previously President Trump remarked that U.S. leadership were “stupid” for not securing Afghanistan future mineral contracts in exchange for U.S. military operations. Talking about the Ukrainian expectation from the oval office earlier today, President Trump outlined his expectations that Volodymyr Zelenskyy put up the rare earth minerals as collateral for continued financial support. WATCH:
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WASHINGTON (AP) — President Donald Trump on Monday indicated that he wants to reach an agreement with Ukraine to gain access to the country’s rare earth materials as a condition for continuing U.S. support for its war against Russia.
Speaking to reporters in the Oval Office, Trump complained that the U.S. had sent more in military and economic assistance to Ukraine than its European partners, adding, “We’re looking to do a deal with Ukraine where they’re going to secure what we’re giving them with their rare earth and other things.”
Trump suggested that he’s received word from the Ukrainian government that they’d be willing to make a deal to give the U.S. access to the elements critical to the modern high-tech economy.
“I want to have security of rare earth,” Trump added. “We’re putting in hundreds of billions of dollars. They have great rare earth. And I want security of the rare earth, and they’re willing to do it.”
Trump, who had previously said he’d bring about a rapid end to the war, said talks are ongoing to bring the conflict to a close.
“We made a lot of progress on Russia, Ukraine,” Trump said. “We’ll see what happens. We’re going to stop that ridiculous war.” (read more)
Always keep in mind, the U.S. spent trillions of dollars in Afghanistan with no strings attached. We withdrew and China paid a couple billion to the Taliban government, locked in contracts, then took everything. Essentially, China hitched a free-ride on the US-led efforts to stabilize Afghanistan, then locked down all the natural resources.
Fast forward to the era of Trump-T2, and there’s always a possibility President Trump may leave Zelenskyy with his coat, a bible and $200; however, nothing is certain as the Ukraine-Russia negotiations are soon to get underway once the ground starts to thaw.
“Complicated business folks, complicated business”…
Posted originally on the CTH on February 3, 2025 | Sundance
Both Canadian Prime Minister Justin Trudeau and Mexican President Claudia Sheinbaum have agreed to terms established by President Trump to combat drug trafficking and secure their perspective borders.
Mexico agrees to put 10,000 troops on the USA border to immediately begin security efforts. Canada agrees to bolster their 10,000-border patrol and security officers, establish a joint task force to combat organized crime, create a new intelligence directive on organized crime and fentanyl, and appoint a Fentanyl Czar.
Between the time of President Trump’s call with Mexico and President Trump’s call with Canada, Peter Navarro, President Trump’s Senior Trade Counselor, spoke to reporters outside the White House.
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