A big day for geopolitical moves.
Earlier today President Donald Trump, Secretary of State Mike Pompeo and North Korean Minister Kim Yong Chol held a 90 minute meeting at the White House discussing ongoing talks and negotiations between the U.S. and North Korea.
Following the meeting the White House announced there would be a second summit between President Trump and Chairman Kim Jong-un:
“President Donald J. Trump met with Kim Yong Chol for an hour and half, to discuss denuclearization and a second summit, which will take place near the end of February. The President looks forward to meeting with Chairman Kim at a place to be announced at a later date.” (link)
(Via Fox News) […] The face-to-face came after Secretary of State Mike Pompeo met with Kim Yong-chol, North Korea’s lead negotiator, in the nation’s capital early Friday morning to negotiate terms that could lead to a second nuclear summit between Trump and Pyongyang leader Kim Jong-un.
Pompeo and Kim Yong-chol didn’t shake hands or respond to reporters’ questions but did smile during a photo opportunity ahead of their meeting at a hotel in Northwest Washington. (more)
Secretary Pompeo noted earlier in the week that substantive progress in discussions between the U.S. and DPRK had stalled.
The surface explanation for the slow-down in progress between the U.S and North Korea is generally attributed to a lack of follow-through on the North Korea side to deliver a full list and detailed accounting of its nuclear and missile facilities that would be used by inspectors for verification. However, the deeper explanation goes toward the ongoing U.S.-China trade discussions and how Beijing, the driver of all activity within the DPRK, uses North Korea as a foil to gain leverage.
Two weeks ago Chinese Chairman Xi Jinping called Chairman Kim to Beijing for talks. The influence of China over the DPRK nuclear issues is unmistakable. As an outcome the denuclearization process is inherently linked to the U.S-China trade talks.
Chairman Xi is simply controlling and using North Korea as a proxy province to achieve a better economic outcome over President Trump. This is the cunning dance behind the dragon mask of China that is not completely visible unless you follow and watch closely. President Trump has been strategically winning this geopolitical contest for more than a year; however, the biggest challenges continue.
President Trump is leveraging many geopolitical tools simultaneously.
Europe, particularly Germany, wants a favorable trade deal with the U.S. where they will not face tariffs on exported autos (BMW, Mercedes, VW, etc.). The EU sees the U.S. China contest as an opportunity for a quid-pro-quo.
Yesterday the EU announced they would make tariffs on Chinese steel permanent. This mutually aligned tariff position helps President Trump in the Chinese trade conflict by putting more pressure on the Chinese economy.
However, in exchange for that favorable position, today the EU announced their requestedterms for a U.S. and Europe trade agreement:
(Bloomberg) The European Union unveiled a blueprint for a free-trade deal with the U.S. that would cut tariffs on a wide range of industrial goods including cars in a bid to heal commercial ties.
European Trade Commissioner Cecilia Malmstrom asked EU governments on Friday in Brussels for the go-ahead to start negotiations on lowering trans-Atlantic commercial barriers, prodding U.S. President Donald Trump to reverse his protectionist stance.
Her draft mandate includes the politically sensitive — and economically important — question of autos even though the U.S. has signaled resistance to having them covered by market-opening talks. Washington is investigating whether foreign vehicles pose a national-security threat and should face higher American duties.
[…] The current trans-Atlantic trade truce has held as U.S. commercial tensions with China have grown. Nonetheless, the cease-fire has appeared fragile because the Trump-Juncker accord includes ambiguities that have led to contradictory statements by officials on each side and signaled the underlying risk of a sudden escalation.
Trump administration representatives have pushed to include agriculture in the scope of any agreement — a stance rejected by the EU. Meanwhile, the European side has made the case for an accord that would cover cars.
“When Juncker and Trump met, they said there is no scope to discuss agricultural goods and even at the time the talk was regarding industrial products,” commission Vice President Jyrki Katainen told reporters on Friday in Helsinki. “We’re also OK with negotiating over auto tariffs.” (continue reading)
The starting point for the EU request outlined above is not going to win favor with President Trump. As the global trade alliances are being reset, it is the strength and scale of the U.S. market, and unfettered access to that market, that is the pot-of-gold. President Trump is not going to give the EU such an economic advantage; it would be against his fundamental goal of reciprocity.
If you remove China from global analysis, the U.S. economy is the only economy with significant growth. This global economic status is not accidental, and is completely connected to the policies behind Trump’s ‘America First’ program. It is helpful to President Trump for the EU to collaborate on trade issues against China, but he’s not going to take back economic benefit from China only to give it away to the EU.
That EU demand is not going to go anywhere with Trump, Ross and Lighthizer.
Help with China is good; however, in addition to market access (and a strong economy) President Trump holds other tools in the deal with the European Union: ♦NATO (funding and participation); ♦the Nord Stream 2 gas pipeline; ♦treasury sanctions against Iran; and ♦deepened trade relations with the Baltic alliance. Add to this the Steel and Aluminum tariffs and auto tariffs that Trump *did not* take away when he met with Junker.
The dance continues…
Have you ever seen that guy on television who spins plates on sticks?….
Dozens of simultaneous plates?
President Trump is a geopolitical equivalent.
His ability to locate leverage in the most unsuspecting locations is truly remarkable.
President Trump is one guy, but he consistently shows how he has them surrounded.
Centinel2012 