National Economic Council Chairman Larry Kudlow appears on Fox News with swamp guardian Chris Wallace to discuss North Korea, trade, tariffs and stunningly good economic and jobs results.

Canadian Prime Minister Justin Trudeau and Foreign Minister Chrystia Freeland begin a U.S. media grievance tour to frame a narrative around the recent Steel and Aluminum tariffs.

The Canadian duo intentionally conflate a U.S. objective to secure the Steel and Aluminum industrial base into a narrative that the U.S. is targeting Canada as a security threat.  Despite this shamefully obtuse argument the majority of Canadians and the vast majority of Americans can see right through this nonsense.  Trudeau and Freeland should be ashamed (but they won’t be), watch:

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Canada and Mexico have both structured their international trade deals around their ability to provide access to the coveted $20 trillion U.S. market. Rather than fix the fatal flaw in NAFTA, which would cost them billions, both nations have doubled down with demands that their dependency model be allowed to continue. They are both about to discover the catastrophic consequences to that decision. Their economic losses will now be exponentially larger as an outcome of their entrenched ideology.

Unfortunately for the politically-minded Justin Trudeau and Foreign Minister Chrystia  Freeland what they both don’t understand is that President Trump doesn’t care about their delicate sensibilities and blame-casting maneuvers. POTUS Trump was elected specifically because he doesn’t apply a political prism in front of economic or national security decisions.

NAFTA is dead, all three countries know it, and the aspect that both Canada and Mexico have only recently become aware of is Trump is in no rush to announce it. President Trump is in no rush to announce it because the effects of withdrawal are already well underway. Investors are not going to invest in Canada and Mexico while the looming uncertainty of a U.S. NAFTA exit looms in the air.

What PM Trudeau doesn’t mention [nor FM Chrystia Freeland ] is that U.S. steel is actually U.S. auto-sector steel being shipped just across the border to be used in U.S. owned manufacturing plants in Canada. Take that away and the entire steel narrative is lost.  [Steel Statistics]

Canada doesn’t make much steel and aluminum, because the Trudeau-minded do-gooder environmentalists in Canada have killed off their heavy manufacturing industrial base. Which is exactly what President Trump is attempting to ensure doesn’t happen in the United States.

https://www.scribd.com/embeds/380893748/content?start_page=1&view_mode=&access_key=key-qpmsWOMnmq4gee6FZvrY

(pdf Link available HERE)

Learn more about World Steel Production Here

The essential problem with NAFTA was an evolution over time.  In its current form NAFTA became an exploited doorway into the coveted U.S. market.  Asian economic interests, large multinational corporations, invested in Mexico and Canada as a way to work around any direct trade deals with the U.S.

By shipping parts to Mexico and/or Canada; and by deploying satellite manufacturing and assembly facilities in Canada and/or Mexico; China, Asia and to a lesser extent EU corporations exploited a loophole.  Through a process of building, assembling or manufacturing their products in Mexico/Canada those foreign corporations can skirt U.S. trade tariffs and direct U.S. trade agreements.  The finished foreign products entered the U.S. under NAFTA rules.

Why deal with the U.S. when you can just deal with Mexico, and use NAFTA rules to ship your product directly into the U.S. market?

This exploitative approach, a backdoor to the U.S. market, was the primary reason for massive foreign investment in Canada and Mexico; it was also the primary reason why candidate Donald Trump, now President Donald Trump, wanted to shut down that loophole and renegotiate NAFTA.

This loophole was the primary reason for U.S. manufacturers to relocate operations to Mexico.  Corporations within the U.S. Auto-Sector could enhance profits by building in Mexico or Canada using parts imported from Asia/China.  The labor factor was not as big a part of the overall cost consideration as cheaper parts and imported raw materials.

If you understand the reason why U.S. companies benefited from those moves, you can begin to understand if the U.S. was going to remain inside NAFTA President Trump would have remained engaged in TPP.

As soon as President Trump withdrew from TPP the problem with the Canada and Mexico loophole grew.  All corporations from TPP nations would now have an option to exploit the same NAFTA loophole.

Why ship directly to the U.S., or manufacturer inside the U.S., when you could just assemble in Mexico and Canada and use NAFTA to bring your products to the ultimate goal, the massive U.S. market?

From the POTUS Trump position, NAFTA always came down to two options:

Option #1 – renegotiate the NAFTA trade agreement to eliminate the loopholes.  That would require Canada and Mexico to agree to very specific rules put into the agreement by the U.S. that would remove the ability of third-party nations to exploit the current trade loophole. Essentially the U.S. rules would be structured around removing any profit motive with regard to building in Canada or Mexico and shipping into the U.S.

Canada and Mexico would have to agree to those rules; the goal of the rules would be to stop third-party nations from exploiting NAFTA.  The problem in this option is the exploitation of NAFTA currently benefits Canada and Mexico.  It is against their interests to remove it.  Knowing it was against their interests President Trump never thought it was likely Canada or Mexico would ever agree.  But he was willing to explore and find out.

Option #2 – Exit NAFTA.  And subsequently deal with Canada and Mexico individually with structured trade agreements about their imports.  Canada and Mexico could do as they please, but each U.S. bi-lateral trade agreement would be written with language removing the aforementioned cost-benefit-analysis to third-party countries (same as in option #1.)

All nuanced trade-sector issues put aside, the larger issue was always how third-party nations will seek to gain access to the U.S. market through Canada and Mexico.  [It is the NAFTA exploitation loophole which has severely damaged the U.S. manufacturing base.]

This is not direct ‘protectionism’, it is simply smart and fair trade.

Unfortunately, the U.S. CoC, funded by massive multinational corporations, is spending hundreds of millions on lobbying congress to keep the NAFTA loophole open.

The U.S. has to look upstream, deep into the trade agreements made by Mexico and Canada with third-parties, because it is possible for other nations to skirt direct trade with the U.S. and move their products through Canada and Mexico into the U.S.

The issue of Canada and Mexico making trade agreements with other nations (especially China), while brokering their NAFTA position with the U.S. as a strategic part of those agreements, is a serious issue that cannot adequately be resolved while the U.S. remains connected to NAFTA.

The auto-sector is much more than just complete assembled vehicles. In many ways the core trade issues: part origination, manufacturing and assembly of multiple durable goods sectors, are represented within the auto industry process.

In essence, the auto-sector is representative of much of the manufacturing exploitation by multinational corporations beyond vehicle production. China has supported this approach because they produce the components for multiple sectors (furniture, appliances etc).

So you see, if you just look at the pure economics of the options, and you remember that President Trump is constitutionally antithetical to anyone having influence over U.S. interests other than the American people inside the United States, you can clearly see there is only one-way this entire process ends.

President Trump will end NAFTA.

Withdrawal is not a matter of “if“, it is simply a matter of “when”.

The economic reality drives the “if”, the political reality drives the “when”.

POTUS Trump knows the multinational corporations and multinational banks will trigger their CoC purchased politicians in Washington DC as soon as Trump announces.  The GOPe Republicans and Corporatist Democrats will launch everything they have against him in a public relations effort to stop the exit.  There are trillions at stake.

As the tax reform benefits gain a foothold, American workers are realizing they are getting more money in their paychecks; and as the U.S. economy continues to gain momentum, that’s the backdrop for President Trump making the announcement.

Remember, when  the U.S. team leaves NAFTA, the generally accepted hit to the U.S. stock market will be around 10%. This is due to Wall Street multinational corporations being the largest benefactors of the current status.

If Wall Street multinationals lose the NAFTA loophole benefit, they will initially make less profit until they reposition their investment assets according to the new trade structure.

However, in the past year more companies have shifted capital in preparation for the possibility of NAFTA being fundamentally restructured. So the ramifications are less now than they were mid-year 2017.  In 2018 this overall NAFTA exit possibility is more ‘factored-in’ to the overall market valuation than it was in 2017.  We saw this on June 1st when the Steel and Aluminum tariffs went into effect and the stock market barely moved.

It is common sense that Wall Street having been the biggest benefactor of NAFTA, will stand to lose the most in any NAFTA restructuring.  Conversely, Main Street was the biggest loser in NAFTA, and Main Street will stand to gain the most from NAFTA restructuring which creates equity in trade opportunity.

That ‘America-First’ approach is one of the cornerstones of MAGAnomics.

Yesterday in a discussion thread recognizing DPRK Vice-Chairman Kim Yong Chol, I noted the following: “The Trump administration is providing North Korea the first modern day opportunity to create an authentic version of itself“.  In essence, though it is difficult to describe, the Trump Doctrine has a clarity of purpose.

The nature of the Trump foreign policy doctrine, as it has become visible, is to hold manipulative influence accountable for regional impact(s), and simultaneously work to stop any corrupted influence from oppressing free expression of national values held by the subservient, dis-empowered, people within the nation being influenced.

There have been clear examples of this doctrine at work.  When President Trump first visited the Middle-East he confronted the international audience with a message about dealing with extremist influence agents. President Trump simply said: “drive them out.”

Toward that end, as Qatar was identified as a financier of extremist ideology, President Trump placed the goal of confrontation upon the Gulf Cooperation Council, not the U.S.

The U.S. role was clearly outlined as supporting the confrontation.  Saudi Arabia, Kuwait, Egypt, Bahrain and the United Arab Emirates needed to confront the toxic regional influence; the U.S. would support their objective.  That’s what happened.

Another example:  To confront the extremism creating the turmoil in Afghanistan, President Trump placed the burden of bringing the Taliban to the table of governance upon primary influence agent Pakistan.  Here again, with U.S. support.  Pakistan is the leading influence agent over the Taliban in Afghanistan; the Trump administration correctly established the responsibility and gives clear expectations for U.S. support.

If Pakistan doesn’t change their influence objective toward a more constructive alignment with a nationally representative Afghanistan government, it is Pakistan who will be held accountable.  Again, the correct and effective appropriation of responsibility upon the influence agent who can initiate the solution, Pakistan.

The process of accurate regional assignment of influence comes with disconcerting sunlight.  Often these influences are not discussed openly.  However, for President Trump the lack of honesty is only a crutch to continue enabling poor actors. This is a consistent theme throughout all of President Trump’s foreign policy engagements.

The European Union is a collective co-dependent enabler to the corrupt influences of Iran.  Therefore the assignment of responsibility to change the status is placed upon the EU.

The U.S. will fully support the EU effort, but as seen in the withdrawal from the Iran Deal, the U.S. will not enable growth of toxic behavior.  The U.S. stands with the people of Iran, but the U.S. will not support the enabling of Iranian oppression, terrorism and/or dangerous military expansion that will ultimately destabilize the region.  Trump holds the EU accountable for influencing change.   Again, we see the Trump Doctrine at work.

Perhaps the most obvious application of the Trump Doctrine is found in how the U.S. administration approached the challenging behavior of North Korea.   Rather than continuing a decades-long policy of ignoring the influence of China, President Trump directly assigned primary responsibility for a reset to Beijing.

China held, and holds, all influence upon North Korea and has long-treated the DPRK as a proxy province to do the bidding of Beijing’s communist old guard.  By directly confronting the influence agent, and admitting openly for the world to see (albeit with jaw-dropping tactical sanction diplomacy) President Trump positioned the U.S. to support a peace objective on the entire Korean peninsula and simultaneously forced China to openly display their closely-guarded influence.

While the Red Dragon -vs- Panda influence dynamic is still ongoing, the benefit of this new and strategic approach has brought the possibility of peace closer than ever in recent history.

No longer is it outlandish to think of North Korea joining with the rest of the world in achieving a better quality of life for its people.

Not only is President Trump openly sharing a willingness to engage in a new and dynamic future for North Korea, but his approach is removing the toxic influences that have held down the possibility for generations.  By leveraging China (through economics) to stop manipulating North Korea, President Trump is opening up a door of possibilities for the North Korean people. This is what I mean when I say Trump is providing North Korea with an opportunity to create an authentic version of itself.

What ultimately comes from the opportunity President Trump has constructed is entirely unknown.  However, the opportunity itself is stunning progress creating a reasonable pathway to prosperity for the North Korean people.   Chairman Kim Jong-un has the opportunity to be the most trans-formative leader within Asia in generations; but it is still only an ‘opportunity’.

Whether Kim Jong-un can embrace openness, free markets and prosperity is yet to be seen.  Freedom is a precariously scary endeavor because there’s always a danger loosening the grip on control can lead to fear, which can lead to even tighter more authoritarian, control.

The commonality in all of these foreign policy engagements is the strategic placement of responsibility upon the primary influence agent; and a clear understanding upon those nation(s) of influence, that all forward efforts must ultimately provide positive results for people impacted who lack the ability to create positive influence themselves.

One of the reasons President Trump is able to take this approach is specifically because he is beholden to no outside influence himself.  It is only from the position of complete independence that accurate assignments based on the underlying truth can be made.

A U.S. foreign policy that provides the opportunity for fully-realized national authenticity is a paradigm shift amid a world that has grown accustomed to corrupt globalists, bankers and financial elites who have established a business model by dictating terms to national leaders they control and influence.

When you take the influence of corporate/financial brokers out of foreign policy, all of a sudden those global influence peddlers are worthless.  Absent of their ability to provide any benefit, nations no longer purchase these brokered services.

As soon as influence brokers are dispatched, national politicians become accountable to the voices of their citizens.  When representing the voices of citizens becomes the primary political driver of national policy, the authentic image of the nation is allowed to surface.

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Full Speech Available HERE

“No more stupid trade deals” ~ U.S. President Donald Trump

From the G7 Mission Statement outlining the objectives of their meeting: “From May 31 – June 2, 2018, G7 Ministers responsible for development cooperation met in Whistler, Canada, to discuss their shared priorities on some of the most pressing global development and humanitarian challenges, including advancing gender equality and the empowerment of women and girls.”

However, as the G7 finance ministerial sessions wrapped up today, all the talk centered around their collective, and stunningly hypocritical, angst at new United States trade policy; specifically the imposition of Steel and Aluminum tariffs on imported goods.

France, Canada, the United Kingdom, Germany, Japan and Italy all have trade tariffs and trade barriers far higher than the U.S.  Each of the G7 nations has exploited the overwhelmingly one-sided access to the U.S. market for decades.  As President Trump demands “reciprocal and fair” trade agreements – those same nations now balk at the same rules and duties they impose on the U.S. now being imposed against them.

The European Union is a non-enumerated member of the G7, and does not chair nor hosts Summits; however, the EU head joins with the G7 in collective angst against a U.S. trade reset.   It’s hilarious to watch them going bananas.

WHISTLER, British Columbia (Reuters) – Finance leaders of the closest U.S. allies vented anger over the Trump administration’s metal import tariffs but ended a three-day meeting in Canada on Saturday with no solutions, setting the stage for a heated fight at a G7 summit next week in Quebec.

U.S. Treasury Secretary Steven Mnuchin failed to soothe the frustrations of his Group of Seven counterparts over the 25 percent steel and 10 percent aluminum tariffs that Washington imposed on Mexico, Canada and the European Union this week.

The other six G7 member countries asked Mnuchin to bring to President Donald Trump “a message of regret and disappointment” over the tariffs, Canadian Finance Minister Bill Morneau said at a press conference after the end of a three-day meeting in the Canadian mountain resort town of Whistler, British Columbia.

“We’re concerned that these actions are actually not conducive to helping our economy, they actually are destructive, and that is consistently held across the six countries that expressed their point of view to Secretary Mnuchin,” he added.  (read more)

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NBC is promoting an upcoming interview with Canadian Prime Minister Justin Trudeau surrounding the recently imposed steel and aluminum tariffs and the Canadian response.

Justin from Canada continues pushing the ridiculously obtuse narrative that tariffs to protect the U.S. steel and aluminum industry represent President Trump saying Canadians are a national security threat to the U.S.

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It’s too bad NBC’s Chuck Todd didn’t interrupt Justin from Canada after the “aluminum smelter” comment and ask: ‘well, now that you mention it, what ever happened to that smelter near the airbase you mention’?

Of course Todd couldn’t do that because Trudeau would have to admit environmental dictates of prior left-wing Canadian political leadership destroyed the aluminum smelting industry in Canada much like it was destroyed by similarly minded environmental ideologues in the U.S.

Which is exactly the reason why President Trump is reversing course and reminding everyone that Steel and Aluminum manufacturing are vital to national interests. Huh, funny that…

However, all of that said, this ridiculously absurd politicization of the reasoning for U.S. steel and aluminum tariffs, and the political narrative now being pushed by Trudeau is further evidence that NAFTA is now a “dead-man-walking” trade deal. Stick a fork in it, and conduct your financial affairs accordingly, because NAFTA is dead.

If there was any possibility of a renewed deal, and/or if Justin from Canada wasn’t told of the pending doom by his advisers therein, he would never get himself so far out in direct opposition to U.S. President Donald Trump.

The only thing missing is the official U.S. announcement withdrawing from NAFTA… But don’t worry, that announcement is coming. Both Canada and Mexico are fully aware #NAFTA is dead. Their political positioning is now entirely framed around blame casting.

Unfortunately for the politically-minded Justin Trudeau and Foreign Minister Chrystia  Freeland what they both don’t understand is that President Trump doesn’t care about their delicate sensibilities and blame-casting maneuvers. POTUS Trump was elected specifically because he doesn’t apply a political prism in front of economic or national security decisions.

NAFTA is dead, all three countries know it, and the aspect that both Canada and Mexico have only recently become aware of is Trump is in no rush to announce it. President Trump is in no rush to announce it because the effects of withdrawal are already well underway. Investors are not going to invest in Canada and Mexico while the looming uncertainty of a U.S. NAFTA exit looms in the air.

As previously shared, prior to joining the administration NEC Chairman Larry Kudlow knew businessman Donald Trump tangentially. However, now that Kudlow’s got a front row seat to Trump’s trade and economic policy, he too has realized President Trump means what he says.

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What PM Trudeau doesn’t mention [nor FM Chrystia Freeland ] is that U.S. steel is actually U.S. auto-sector steel being shipped just across the border to be used in U.S. owned manufacturing plants in Canada. Take that away and the entire steel narrative is lost.

Canada doesn’t make much steel and aluminum, because the Trudeau-minded do-gooder environmentalists in Canada have killed off their heavy manufacturing industrial base. Which is exactly what President Trump is attempting to ensure doesn’t happen in the United States.

Did you see the list of items the dynamic duo Justin Trudeau and Chrystia Freeland selected as targets for their counter-tariff position? Check it out here. What do: “felt pens”, “rubber boats”, “orange juice” and Tomato Ketchup have to do with the U.S. steel and aluminum tariffs?

See The Answer HERE.

Politics.

….And when Justin and Chrystia from Canada get all done with their U.S. media tour, guess what?

NAFTA is still dead.

Need-More-Winnamins

North Korean Vice-Chairman Kim Yong Chol, the second most powerful political official in the DPRK, visited President Trump at the White House today to deliver a letter from North Korean Chairman Kim Jong-un.  The topic was the ongoing dialogue between the U.S. and North Korea in advance of a meeting scheduled June 12th in Singapore.

It is important to note the body language, and the messages conveyed therein, between Kim Yong Chol, the emissary group and the U.S. leadership headed by President Trump and Secretary of State Mike Pompeo (video below).  After their two-hour meeting, President Trump and Secretary Pompeo delivered remarks to the press pool:

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Keep in mind, Kim Yong Chol also participated in meetings between Chairman Kim Jong-un and the primary influence agent, Chinese Chairman Xi Jinping.

President Trump described the session with Kim Yong Chol as a positive, introductory session.”I think that we’re going to have a relationship and it will start on June 12,” the president said.

President Trump also said he did not discuss human rights Friday with Kim Yon Chol, but said he “probably will, and in great detail” during his upcoming meeting with Kim Jong-un.  Trump said North Korean officials asked about sanctions, which Trump said will remain in place.  However, in typical diplomatic form, POTUS Trump also softened the tone toward North Korea, saying “I don’t want to even use the term maximum pressure anymore, because we’re getting along.”  President Trump said the relationship between the U.S. and North Korea “is as good as it’s been in a long time.”

Extended video from Fox10 News shows the exit and body language in greater detail:

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More footage:

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President Trump is providing the first opportunity North Korea has ever encountered in the modern era to establish an authentic version of itself.

Against the backdrop of President Trump’s unapologetic economic muscle flexing, National National Economic Council Director Larry Kudlow appears on CNBC to discuss the latest stunningly positive jobs and economic reports.

The Bureau of Labor Statistics released the May Jobs Report earlier today (pdf here) and has stunned forecasters and economic analysts with incredible results.  Over 223,000 jobs were created in May, and the unemployment rate drops to 3.8%.

As the New York Times is forced to admit, there are not enough words to describe just how good these results are amid the continued growth of the U.S. economy. Accepting the BLS heavily manipulated jobs numbers during the Obama years, the BLS is forced to attempt to reconcile the scale of monthly job gains (223k) and an unemployment rate that has seemingly dropped below the floor of reasonable possibility.  As a result 3.8% is the lowest unemployment rate since April 2000; and if the unemployment rate drops another 0.1% it will be the lowest unemployment number since the 1960s.

Average monthly employment growth in 2018 now averages a whopping 207,000 jobs per month.  These monthly average gains are faster than gains in both 2016 and 2017.  Collectively, the U.S. economy has added nearly 3 million jobs since President Donald J. Trump took office.

White House:  “Job growth has been strong across the board during the first 16 months of this Administration, and the gains in the goods-producing industries (manufacturing, construction, and mining and logging) have been especially robust. After averaging gains of 27,000 jobs per month during President Obama’s second term, these industries have almost doubled the pace of hiring to 46,000 jobs per month since January 2017. Manufacturing gains have picked up even more speed: Monthly gains have averaged 19,000 per month since President Trump took office after increases of only 8,000 per month, on average, during the second term of President Obama.

Increases in manufacturing employment since January 2017 reflect increased confidence among America’s manufacturers, but they also reflect changes in the investment decisions of other American businesses. The Morgan Stanley measure of capital expenditure investment plans shows that these plans are at historically high levels, in part due to the incentives emerging from the Tax Cuts and Jobs Act. According to the second estimate of Q1 real GDP released earlier this week, real business fixed investment grew 9.2 percent at an annual rate during Q1, with strong growth in structures, equipment, and intellectual property investment.  (more)

Total nonfarm payroll employment increased by 223,000 in May, compared with an average monthly gain of 191,000 over the prior 12 months. Over the month, employment continued to trend up in several industries, including retail trade, health care, and construction:

♦In May, retail trade added 31,000 jobs, with gains occurring in general merchandise stores (+13,000) and in building material and garden supply stores (+6,000). Over the year, retail trade has added 125,000 jobs.

♦Employment in health care rose by 29,000 in May, about in line with the average monthly gain over the prior 12 months. Ambulatory health care services added 18,000 jobs over the month, and employment in hospitals continued to trend up (+6,000).

♦Employment in construction continued on an upward trend in May (+25,000) and has risen by 286,000 over the past 12 months. Within the industry, nonresidential specialty trade contractors added 15,000 jobs over the month.

♦Employment in professional and technical services continued to trend up in May (+23,000) and has risen by 206,000 over the year.

♦Transportation and warehousing added 19,000 jobs over the month and 156,000 over the year. In May, job gains occurred in warehousing and storage (+7,000) and in couriers and messengers (+5,000).

♦Manufacturing employment continued to expand over the month (+18,000). Durable goods accounted for most of the change, including an increase of 6,000 jobs in machinery. Manufacturing employment has risen by 259,000 over the year, with about three-fourths of the growth in durable goods industries.

♦Mining added 6,000 jobs in May. Since a recent low point in October 2016, employment in mining has grown by 91,000, with support activities for mining accounting for nearly all of the increase.

The economic engine is firing with seemingly unstoppable momentum. Today started off with a payrolls report showing a gain of 223,000, well above market expectations of 188,000 – and with the unemployment rate hitting an 18-year low of 3.8 percent, things only look better.

The ISM Manufacturing Index registered a 58.7 reading — representing the percentage of businesses that report expanding conditions — that also topped Wall Street estimates. Finally, the construction spending report showed a monthly gain of 1.8 percent, a full point higher than expectations.  This data is helping to fuel expectations the GDP growth in the 2nd, 3rd, and 4th quarter will defy all expectations.

CNBC – Already, the Atlanta Fed’s GDPNow tracker sees the second quarter rising by 4.8 percent. […] Andrew Hunter, U.S. economist at Capital Economics, said the ISM number alone is consistent with GDP growth of better than 4 percent, though he thinks the second quarter will be in the 3 percent to 3.5 percent range. (link)

The pundits are gobsmacked:

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