Commerce Secretary Wilbur Ross talks about the importance of trade “reciprocity”.  As Wilburine outlines phase-2 MAGAnomics is only just beginning the reciprocity discussion.

Additionally, Secretary Ross talks about the issues with Chinese steel trans-shipment and the reason for Steel and Aluminum tariffs to be global in order to address China’s use of proxy nation states to continue dumping.   In this interview Ross begins to outline the fine points behind the pending 2018 trade negotiations. It is going to take a lot of repeated effort to awaken the larger U.S. electorate to the issues.

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 is 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.]

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.

Additionally, with Canada now joining TPP it has become impossible for the U.S. to remain in NAFTA and simultaneously conduct trade negotiations with TPP nations.

EXAMPLE: If the U.S. remained in NAFTA all TPP nations would engage in trade discussion knowing there was a Canadian and/or Mexican option to gain access to the U.S. market.  Therefore, despite the size of our market, we could never negotiate a better trade agreement than the deal existing between Canada, Mexico and their TPP partner nations.

President Trump, Commerce Secretary Wilbur Ross, Trade Adviser Peter Navarro and U.S. Trade Representative Robert Lighthizer well understand this structural problem.  ONLY Trump, Ross, Mnuchin, Navarro and Lighthizer are willing to confront this problem.  If Trump had lost the 2016 election, Clinton would have joined the multinationals and U.S. workers would have suffered greatly.

Lastly, the issue of Canada and Mexico making trade agreements with other nations (especially China), while brokering/leveraging 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.

At the conclusion of Round #6, this was the direct issue at the heart of a very frustrated U.S.T.R. Lighthizer’s strongly worded response to Canada:

[…]  In another proposal, Canada reserved the right to treat the United States and Mexico even worse than other countries if they enter into future agreements. Those other countries may, in fact, even include China, if there is an agreement between China and [Canada]. This proposal, I think if the United States had made it, would be dubbed a “poison pill.” We did not make it, though. Obviously, this is unacceptable to us, and my guess is it is to the Mexican side also. (read full remarks)

*ahem* As if on cue…

(tweet link)

DEEP-DIVE FULL BACKSTORY

The Eagle, The Panda and The Red Dragon

Attorney General Jeff Sessions and the U.S. Department of Justice is filing an injunction to block enforcement of three California immigration laws, each enacted within the past year.

Summary of California Laws Being Challenged:

(Encapsulated from Fox News coverage)  ♦ One law offers additional worker protections against federal immigration enforcement actions. Senior Justice Department officials have said it’s prevented companies from voluntarily cooperating with Immigration and Customs Enforcement (ICE) officials.

Employers are mandated under the law to demand ICE agents present a warrant or subpoena before entering certain areas of the premises, or when accessing some employee records. Some companies have complained they’ve felt torn between trying to comply with seemingly contradictory state and federal statutes, since penalties for non-compliance can be steep from both entities.

♦ The second law also known as “the sanctuary state bill” protects immigrants without legal residency by limiting state and municipal cooperation with the feds, including what information can be shared about illegal-immigrant inmates.

♦ A third law gives state officials the power to monitor and inspect immigrant detention facilities either run directly by, or contracted through, the U.S. Department of Homeland Security.

Maria Bartiromo interviews Treasury Secretary Mnuchin to discuss Gary Cohn’s departure from President Trump’s National Economic Council (NEC).  {Deep Dive Here}  Secretary Mnuchin talks about the larger MAGAnomic objectives, and the transition of the administration into ‘policy phase-2’ with all attention now focused on Main Street.

Great Interview:

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♦Economic Patriotism – ‘America First’:
√ Unleash energy development. Drive down energy costs. Lower cost-of-living.
√ Eliminate regulatory stranglehold. Unleash free market entrepreneurial expansion.
√ Lower corporate tax burden. Position business investment ‘best bet’ domestically.
√ Generate investment expansion. Create: jobs, jobs, jobs.
√ Generate higher labor demand. Jobs, Jobs, Jobs = Higher wages, wages, wages.
√ Lower middle-class tax burden. Combine higher wages with lower taxes. 2x benefits.
==> WE ARE HERE <==
• Structure trade deals to benefit workers/companies inside the U.S.
• Leverage access to U.S. market as incitement for domestic investment.
• Economic Growth + Domestic Manufacturing Expansion =  GDP increases.
• Increased overall tax revenues from expanding economy stabilizes debt and entitlements.

MRC News has just released a study of ABC, CBS and NBC broadcast news coverage for the first two months of 2018.  The results are almost identical to the results from 2017, and highlight the extreme media bias against a republican president.

(Via NewsBusters) So far, 2018 looks an awful lot like 2017 — at least when it comes to the broadcast networks’ hostile approach to Donald Trump. A Media Research Center analysis of the ABC, CBS and NBC evening newscasts in January and February found ten times more negative comments about the President than positive statements, and found the ongoing Russia investigation once again swamped all other topics.

For this study, MRC analysts looked at all 505 evening news stories that mentioned President Trump or his administration in January and February. Out of 851 total minutes of airtime devoted to the administration, the networks spent almost one-fourth of it (204 minutes, or 24%) on the Russia investigation, eclipsing other major topics such as the economy, immigration reform, and even the gun debate. (read more)