Too funny… this is what we would call a win/win.   President Trump delivering remarks to the media aboard Air Force One on the flight back to the U.S.

(Via Associated Press)  President Donald Trump says he will shortly be providing formal notice to Congress that he will terminate the North American Free Trade Agreement, giving lawmakers six months to approve the replacement he recently signed.

Speaking to reporters aboard Air Force One while returning to Washington from Argentina, Trump says: “I will be formally terminating NAFTA shortly.”

Seeking to gain leverage with skeptical lawmakers to approve the revised trade pact, Trump says Congress “will have a choice” as it considers the agreement he signed with the leaders of Mexico and Canada on Friday during the Group of 20 summit.

He says they can choose between the United States-Mexico-Canada Agreement or “pre-NAFTA, which works very well.”

Trump has made renegotiating NAFTA a centerpiece of his presidency.  (link)

The USMCA is structurally more beneficial to the U.S. and Mexico than Canada.

Factually, it was the U.S. and Mexico who wrote the agreement, and Canada joined in only to mitigate their losses after the majority growth architecture was constructed.  There is almost nothing inside the USMCA agreement which structurally expands the Canadian economy; it is a very weird trade-dynamic.

It was the exploitative nature of the NAFTA construct that benefited Canada and Mexico to the detriment of the United States.  As a result, President Trump is OK with the final USMCA result which removes the majority of the parasitic benefits; and he is ok with no USMCA and no NAFTA, and a return to pre-NAFTA trade structures.

Like NAFTA the USMCA is a “trade agreement”, with various opt-out initiatives for any party; it is not a trade “treaty” – and therefore only requires a simple majority vote.

President Trump and USTR Lighthizer really have created a Win/Win.

…”He says [congress] can choose between the United States-Mexico-Canada Agreement or “pre-NAFTA, which works very well.””..

Damnedest thing ever.

You could hope it passes; or hope it fails – the end result is similar.

Statement from the White House Press Secretary Regarding The President’s Working Dinner With China:

“The President of the United States, Donald J. Trump, and President Xi Jinping of China, have just concluded what both have said was a “highly successful meeting” between themselves and their most senior representatives in Buenos Aires, Argentina.

Very importantly, President Xi, in a wonderful humanitarian gesture, has agreed to designate Fentanyl as a Controlled Substance, meaning that people selling Fentanyl to the United States will be subject to China’s maximum penalty under the law.

On Trade, President Trump has agreed that on January 1, 2019, he will leave the tariffs on $200 billion worth of product at the 10% rate, and not raise it to 25% at this time. China will agree to purchase a not yet agreed upon, but very substantial, amount of agricultural, energy, industrial, and other product from the United States to reduce the trade imbalance between our two countries. China has agreed to start purchasing agricultural product from our farmers immediately.

President Trump and President Xi have agreed to immediately begin negotiations on structural changes with respect to forced technology transfer, intellectual property protection, non-tariff barriers, cyber intrusions and cyber theft, services and agriculture. Both parties agree that they will endeavor to have this transaction completed within the next 90 days. If at the end of this period of time, the parties are unable to reach an agreement, the 10% tariffs will be raised to 25%.

It was also agreed that great progress has been made with respect to North Korea and that President Trump, together with President Xi, will strive, along with Chairman Kim Jong Un, to see a nuclear free Korean Peninsula. President Trump expressed his friendship and respect for Chairman Kim.

President Xi also stated that he is open to approving the previously unapproved Qualcomm-NXP deal should it again be presented to him.

President Trump stated:

“This was an amazing and productive meeting with unlimited possibilities for both the United States and China. It is my great honor to be working with President Xi.”  (Link)

The U.S. delegation headed by President Trump and the Chinese delegation headed by Chairman Xi Jinping attended a much anticipated bilateral dinner at the conclusion of the G20 summit in Argentina.  The dinner lasted for two and a half hours:

.

Immediately following the dinner the U.S. delegation went straight to Airforce-One for the flight home.

(Reuters) […] With the United States and China locked in an economic dispute that has unnerved global financial markets and weighed on the world economy, Trump and Xi sat down with their aides for a working dinner at the conclusion of a two-day gathering of world leaders in Buenos Aires.

Trump told Xi at the start of the meeting he hoped they would achieve “something great” on trade for both countries. The leaders finished their talks after about 2-1/2 hours and Trump departed for his scheduled flight back to Washington.

While neither side issued any immediate statements on the outcome, White House chief economist Larry Kudlow told reporters as he boarded Air Force One that the talks went “very well.” He offered no specifics.

The editor of a major Chinese state-run newspaper also said the talks went well.

“Based on information I received, talks between Xi and Trump went well and consensus was reached,” Hu Xijin, the editor of the Global Times, published by the ruling Communist Party’s official People’s Daily, wrote on Twitter, without giving details.  (Read More)

It is likely the tariffs will continue until reciprocity improves.

The Big Club will go bananas next week.

There is no doubt in my mind that President Trump has a very well thought out long-term strategy regarding China. President Trump takes strategic messaging toward the people of China very importantly. President Trump has, very publicly, complimented the friendship he feels toward President Xi Jinping; and praises Chairman Xi for his character, strength and purposeful leadership. Trump knows how to play their panda/dragon games.

Each time China takes aggressive action (red dragon) China projects a panda face through silence and non-response to opinion of that action;…. and then the  action continues. The red dragon has a tendency to say one necessary thing publicly, while manipulating another necessary thing privately. The Art of War.

President Trump is the first U.S. President to understand how the red dragon hides behind the panda mask. Chairman Xi and President Trump are scheduled for a dinner on Saturday night; their first face-to-face meeting in a year.

The entire planet is focused on the dynamic of Chairman Xi and President Trump.  Billions waged on the position of an eyebrow, or the hint of a smile.  Epic stuff.  In the multinational finance world this is bigger than the moon landing, world cup and Olympics combined.  Every nuance and inference to be reviewed in slow-mo replay by hedge-fund managers looking for any indication of hope.

The funniest thing is Donald Trump doesn’t care about all that.  He has the desired ‘America First’ outcome gamed out; POTUS is only looking to see which direction Xi is leaning.  From there Trump puts the instructions to the team (Mnuchin, Pompeo, Ross, Lighthizer and Navarro); yet even they don’t know the full plan, no-one does except President Trump… for a reason.

The Wall Street global financial crowd is on pins-and-needles hoping desperately the confrontation between China and the U.S. doesn’t escalate.

Meanwhile, blue-collar Main Street USA is hoping ‘bull-in-a-china-shop-Trump‘ punches Xi in the nose; diplomatically of course.

The bamboo forest is shrinking…

People from the White House are scheduled to talk to Merkel’s bosses on Tuesday December 4th, so it’s likely Chancellor Merkel wants to know what the conversation will be about.

.

[Transcript] Buenos Aires, Argentina – 1:41 P.M. AST – PRESIDENT TRUMP: Well, thank you very much everybody. It’s a great honor to be with Chancellor Merkel, who is my friend. We have a great relationship and a great working relationship, I think very important. And we are talking trade. We’re talking defense. We’re talking about many things.

We have a tremendous trade imbalance, but we’re going to get that straightened out. It’ll be better and better, I think, as time goes by. Our military relationship is very good. I think we all understand each other.

And it’s an honor to be with the Chancellor. She’s done an incredible job. Highly respected by everybody, including me. So I just want to say it’s a great honor, Angela. Thank you very much.

CHANCELLOR MERKEL: You’re welcome.

(As interpreted.) Well, let me say I’m very glad we have the opportunity for this bilateral meeting. We shall address issues related to trade, multilateral issues, and also fair trade and the World Trade Organization. We will also talk about bilateral relations, Ukraine, Syria, and the violations of the INF treaty by Russia.

So there’s quite a lot to do, quite a lot on our plate for this relatively short time.

PRESIDENT TRUMP: Good. Thank you very much. Thank you very much everybody. Thank you.

Q Mr. President, have you spoken to President George W. Bush?

PRESIDENT TRUMP: Yes, I have. And Jeb also. And I expressed deepest sympathies. Angela and I were just talking about it. He was a wonderful man. And you may want to just explain your little meeting with him. I found it very interesting.

CHANCELLOR MERKEL: Yes. I was in (inaudible), in the White House, visiting George Bush. And he’s the father, or one of the fathers, of the German unification, and we will never forget that.

THE PRESIDENT: I found that very interesting.

So we extended our best wishes. And he was — he was a very fine man. I met him on numerous occasions. He was just a high-quality man who truly loved his family. One thing that came through loud and clear, he was very proud of his family and very much loved his family. So he was a terrific guy and he’ll be missed. And he led a full life, and a very exemplary life too, I will say.

And we’ve decided — as you know, we were going to have a big press conference today, which I actually looked forward to because we’ve made tremendous progress at the G20 with many nations. And we were going to have a very big press conference, and out of respect for President Bush, we’ve cancelled it here and we’ll have it back in Washington at some time in the near future. Sometime after the funeral service. Okay?

Q Do you regret any of your comments about Bush or his family in the past?

THE PRESIDENT: Thank you very much, everybody. Thank you.

Q Mr. President, are you still planning to meet with President Xi today?

THE PRESIDENT: We will be meeting with President Xi tonight. I will be, and my group — small group. And he will have a small group of representatives and we’ll be talking about a thing called trade, and probably other things also. But primarily trade.

And it’s a very important meeting. But again, the fact that we lost a President who truly was a wonderful person, a wonderful man, a great man, it really puts a damper on it, to be honest with you.

So we’re going to have the meeting tonight, and then I’ll be going back to Washington. And we can all meet sometime during the week or shortly thereafter.

Thank you all very much. Thank you.

END – 1:45 P.M. AST

Here’s a treat.  The G20 in Buenos Aires, Argentina, allowed an actual broadcast of the cultural performance for all dignitaries at the Colón Theater.

.

You can also see pictures of the beautiful dinner and cultural performance HERE.

President Trump and First Lady Melania arriving:

.

More Pictures – Click Here

U.S. President Donald Trump meets with the Prime Minister of a nation who used their intelligence network in an effort to defeat him in the 2016 campaign…  Weird.

.

[Transcript] Buenos Aires, Argentina – 3:08 P.M. AST – PRESIDENT TRUMP: Thank you very much, everybody. It’s an honor to be with the Prime Minister of Australia, Prime Minister Morrison. And we’ve just gotten to know each other, and so far, so good, I have to tell you. I think it’s going to be a great relationship. And we certainly anticipate having a fantastic relationship — always — with Australia.

I know you’ve done a fantastic job in a very short period of time. You’ve done a lot of the things that they’ve wanted over there and that’s why you’re sitting right here. And so I congratulate you.

But it’s an honor, and we will be with Australia and you all the way.

PRIME MINISTER MORRISON: Well, thank you. Thank you very much, Mr. President. Australia and the United States have always been the greatest of friends — not just in periods of strategic cooperation, but economically. And the people-to-people relationships — well, there’s none better.

PRESIDENT TRUMP: Thank you very much, everybody. Thank you. Appreciate it.

Q Mr. President, will you be exchanging pleasantries with Putin? Will you be exchanging pleasantries with Putin?

PRESIDENT TRUMP: I don’t know. Not particularly. I don’t know.

END – 3:10 P.M. AST