There’s a term called “zeroing” at the heart of this World Trade Organization decision that supports President Trump, Secretary Ross and USTR Lighthizer.

When an industry product like Canadian softwood lumber is shipped into the U.S. for sale at a lower price than exists in Canada, the U.S. Commerce department calls that“dumping“.  If the Canadian product is the same or higher in the U.S. as it is in Canada there is no dumping.  No dumping is a “zero” or normal price differential; hence “zeroing”.

The Canadian government is subsidizing their lumber industry by allowing tree removal from federal land at discounted rates so long as the lumber is exported.  This made softwood lumber cheaper in the U.S. than in Canada and set up the dumping issue.

[NOTE: This is the same issue with Steel and Aluminum from China]

U.S. lumber mills were going out of business because Canada was dumping subsidized product into the U.S. market at a discounted rate.  As a consequence, in 2017 Commerce Secretary Wilbur Ross instituted a 20% tariff on Canadian lumber to protect the U.S. lumber industry.  The tariff is a countervailing duty to offset the Canadian subsidy. ie. “zeroing”.

With the 20% tariff, Canadian lumber sold into the U.S. was the same price as Canadian lumber sold in Canada.  This allows U.S. lumber mills to compete for U.S. market business on an equal basis.

Instead of removing their federal lumber subsidy (which would have removed the tariff) the Canadian government, via Justin Trudeau, went bananas and sued the U.S. at the World Trade Organization (WTO).  Trudeau was counting on prior disputes where the WTO did not side with the U.S. position on the calculations for industry “zeroing”.

However, in a departure from prior WTO opinion; and conceding to the obvious validity of the math while faced with a U.S. president who would not relent; the WTO agreed with President Trump, Secretary Ross and Ambassador Lighthizer and affirmed the 20% tariff as a valid countervailing duty.

The softwood lumber tariff was upheld by the WTO and Canada has lost its case.

This is a major victory for the U.S. with considerable ramifications for all further “anti-dumping” tariffs and/or countervailing duties.

(Reuters) […] U.S. Trade Representative Robert Lighthizer welcomed the ruling by a WTO dispute panel, which he said showed the “erroneous”, “unpersuasive” and “flawed reasoning” of Appellate Body rulings in the past.

“The United States commends this panel for doing its own interpretive analysis, and for having the courage to stand up to the undue pressure that the Appellate Body has been putting on panels for many years,” Lighthizer said in a statement.

He said the WTO rules did not prohibit zeroing, and the United States would never have signed up to WTO rules that did prohibit the practice.

“WTO Appellate Body reports to the contrary are wrong, and reflect over-reaching by that body,” he said.

Canada launched the WTO dispute in November 2017, saying it would forcefully defend its lumber industry against “unfair, unwarranted and deeply troubling” U.S. tariffs.

The U.S. Commerce Department had accused Canada of unfairly subsidizing and dumping softwood lumber, which is commonly used in the construction of homes. Its duties affected about $5.66 billion worth of imports.

There was no immediate reaction from Canada’s international trade ministry, which could appeal against the ruling. (more)

This ruling is especially important as USTR Lighthizer engages with China on the current trade discussion. Prior WTO rulings essentially allowed China to subsidize their state-run industries/companies and undermine free-market prices.  Globally this put China at a manufacturing advantage; however, moving forward, the U.S. can apply the “zeroing” analysis and offset the Chinese state subsidy with countervailing duties.

In essence this WTO ruling forces the financial principles underlying a free and fair market into the global economy.  If China wants to sell industry products into the U.S. they can no long manipulate their price to export at a lower cost than exists in China.

President Trump has a simple economic platform: “Buy American and Hire American“; toward that goal all economic and fiscal policies are now directed to assist U.S. manufacturing companies and retain U.S. workers.  This includes free, fair and reciprocal trade agreements. Period.

Once upon a time, there was an old man who used to go to the ocean to do his writing. He had a habit of walking on the beach every morning before he began his work. Early one morning, he was walking along the shore after a big storm had passed and found the vast beach littered with starfish as far as the eye could see, stretching in both directions.

Off in the distance, the old man noticed a small boy approaching.  As the boy walked, he paused every so often and as he grew closer, the man could see that he was occasionally bending down to pick up an object and throw it into the sea.  The boy came closer still and the man called out, “Good morning!  May I ask what it is that you are doing?”

The young boy paused, looked up, and replied “Throwing starfish into the ocean. The tide has washed them up onto the beach and they can’t return to the sea by themselves,” the youth replied. “When the sun gets high, they will die, unless I throw them back into the water.”

The old man replied, “But there must be tens of thousands of starfish on this beach. I’m afraid you won’t really be able to make much of a difference.”

The boy bent down, picked up yet another starfish and threw it as far as he could into the ocean. Then he turned, smiled and said, “It made a difference to that one!”

Earlier today President Trump met with Egyptian President Abdel Fattah al-Sisi in the oval office.  President al-Sisi is a key member of the regional alliance for peace.

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[Transcript] – 12:17 P.M. EDT – PRESIDENT TRUMP: Thank you very much. It’s a great honor to be with President Al Sisi of Egypt. We have many things to discuss, as you can imagine: military, trade.

And I have to say that a lot of progress has been made in a lot of different ways, in terms of terrorism and others things, with Egypt and within Egypt. It’s really incredible what’s happened, especially in certain respects that we’ve already talked about. But we will be meeting with representatives of the President and of Egypt in a little while.

Again, we have very, very important things, militarily, to talk about. And also about trade. A big trading partner. We do a lot of work together. We work together. And I think we’ve never had a better relationship — Egypt and the United States — than we do right now.

So, I want to thank everybody for being here. And, Mr. President, thank you very much.

PRESIDENT AL SISI: Thank you, Mr. President.

PRESIDENT TRUMP: My friend.

PRESIDENT AL SISI: (As interpreted.) Thank you, Mr. President. Allow me to express my thanks for your kind invitation and for providing me this opportunity to meet and talk about making a quantum leap in the strategic relationship between Egypt and the United States.

Let me emphasize, Mr. President, that the relations have not been better over the years of our bilateral relationship, and that is why I’m extending, Mr. President, to you our thanks, appreciation, and greetings for (inaudible).

All the credit goes to you, Mr. President. Thank you very much for your support on all fronts. This is what we’re seeking to promote our bilateral relations in various fields: political, economic, military, cultural, and others.

Thank you very much.

PRESIDENT TRUMP: Well, thank you. And I just have to say, before we perhaps take a couple of questions, the First Lady was recently in Egypt. She was treated beautifully.

But maybe even more importantly, what she saw with the Pyramids was — you could call it the seventh wonder or the eighth wonder of the world. She thought it was incredible. She thought it was one of the most incredible things she’s seen. And we have lots of pictures, and that was great day and a great moment to see the Pyramids — the Great Pyramids.

So hopefully a lot of people will be going and looking at them. But she’s not easily impressed; she was very impressed.

So thank you very much.

Q Mr. President, you seem to be —

PRESIDENT TRUMP: Go ahead, Jeff.

Q You seem to be cleaning house at DHS. What would you like to achieve with the new leadership there?

PRESIDENT TRUMP: Well, I never said I’m “cleaning house.” I don’t know who came up with that expression. We have a lot of great people over there. We have bad laws. We have a judge that just ruled, incredibly, that he doesn’t want people staying in Mexico. Figure that one out. Nobody can believe these decisions we’re getting from the Ninth Circuit. It’s a disgrace.

And so we’re fighting the bad laws, the bad — the bad things that are coming out of Congress. You have a Democrat Congress that’s obstructing. You talk about obstruction — the greatest obstruction anyone has ever seen. All they have to do is spend 20 minutes and they can fix this whole problem.

We have the worst laws of any country anywhere in the world, whether it’s catch and release or any one of them. I mean, I could name — I could sit here and name them, but if you got rid of catch and release, chain migration, visa lottery — you have to fix the asylum situation; it’s ridiculous. You have people coming in, claiming asylum. They’re all reading exactly what the lawyer gives them. They have a piece of paper. “Read what that is.” And all of the sudden, you’re entitled to asylum. And some of these people are not people you want in our country.

So we are building a lot of wall. It’s getting built. Some of you saw that last week, when we went — we had a great presentation of a new stretch. But we’re building a lot of wall and we’re being very strong on the border.

But we’re bucking a court system that never, ever rules for us. And we’re bucking really bad things with Congress — with the Democrats in Congress not willing to act. They want to have open borders, which means they want to have crime; they want to have drugs pouring into our country. They don’t want to act. We have to close up the borders. We’re doing it, but we’re doing it — I could do it much faster if they would act.

So it’s a terrible thing. The Democrats in Congress — what they’re doing and the obstruction — they don’t want to fix it. And we have to fix it. They want open borders. They want to have millions of people pouring into our country. They don’t even want to know who they are.

These are people coming into our country with criminal records. We have murderers coming in. We have drug lords coming in. We have gangs coming in. And we’re stopping them. And if we don’t stop them, ICE is throwing them the hell out. We’re getting them out.

But our job could be so much easier. I think Kevin is going to do a fantastic job. He’s Acting, but I think he’s going to do a fantastic job. And we’re not doing anything very big, as far as — what we need: homeland security. That’s exactly what we want. There’s no better term; there’s no better name. We want homeland security and that’s what we’re going to get. Thank you all very much. Thank you.

Thank you. Thank you very much. Thank you very much.

Q Egypt is ordering more fighter jets from Russia. How do you feel about that?

PRESIDENT TRUMP: Thank you very much, everybody.

Q Are you considering child separations, sir? Can you rule that out, Mr. President? You wouldn’t start separating the children again, would you, Mr. President?

PRESIDENT TRUMP: Obama separated the children, by the way.

Q Would you consider doing it again?

PRESIDENT TRUMP: Just so you understand, President Obama separated the children. Those cages that were shown — I think they were very inappropriate — they were built by President Obama’s administration, not by Trump. President Obama had child separation. Take a look. The press knows it. You know it. We all know it. I didn’t have — I’m the one that stopped it. President Obama had child separation.

Now, I’ll tell you something: Once you don’t have it, that’s why you see many more people coming. They’re coming like it’s a picnic because “let’s go to Disneyland.” President Obama separated children. They had child separation. I was the one that changed it.

Okay. Thank you very much.

Q But what’s President Trump going to do? Are you going to bring it back is the question. Would you bring it back?

Q Will you bring it back, though?

PRESIDENT TRUMP: We’re not looking to do that. No.

Q You’re not going to bring it back?

PRESIDENT TRUMP: We’re not looking to do that. No.

Thank you very much.

Q You’re not looking to bring it back?

PRESIDENT TRUMP: But it — it brings a lot more people to the border. When you don’t do it, it brings a lot more people to the border. We are not looking to do it.

But President Obama had the law. We changed the law. And I think the press should accurately report it. But, of course, they won’t.

Thank you all very much. Thank you.

Q Should the Muslim Brotherhood be a terrorist organization? Muslim Brotherhood?

PRESIDENT TRUMP: Thank you very much.

Q (Inaudible.)

PRESIDENT TRUMP: It’s a great honor to be with the President. It’s a great honor to be with your President.

Q Do you support his efforts to stay in power longer?

PRESIDENT TRUMP: What?

Q (Inaudible) through 2034?

PRESIDENT TRUMP: I don’t hear you.

Q Do you support his efforts to stay in power through 2034?

PRESIDENT TRUMP: I think he’s doing a great job. I don’t know about the effort; I can just tell you he’s doing a great job. Great President.

Thank you very much, everybody. Thank you.

END 2:26 P.M. EDT

Put this into the geopolitical file labeled: “Things that make other things make sense”…  You only need to watch the first minute and fifteen-seconds of this announcement to see the bigger BIG picture.  WATCH:

[Transcript Snippet] … “This is the first time that the United States has designated a part of another government as an FTO. We’re doing because the Iranian regime’s use of terrorism as a tool of statecraft makes it fundamentally different from any other government. This historic step will deprive the world’s leading state sponsor of terror the financial means to spread misery and death around the world.”

“Businesses and banks around the world now have a clear duty to ensure that companies with which they conduct financial transactions are not connected to the IRGC in any material way. It also gives the U.S. Government additional tools to counter Iranian-backed terrorism.”  (read full transcript)

The move to label members of the Iranian Revolutionary Guard as official terrorist designees’ now permits the world financial community to impose sanctions and freeze assets of any IRG members and leaders.

Of course, it would help the geopolitical effort if a U.S. official was, say, President of the World Bank or something…  Wait, wha.. huh?

Funny how that happens….

This now forces a situation where financial proxies (China, Russia) will have to be created for Iran to exploit access to capital.  Of course anyone caught acting as a proxy for the Iranian regime to escape sanctions and/or frozen assets, will run the risk of being caught by the U.S. and subsequently suffer financial (think trade outcome) consequences.

World Bank President David Malpass would hold the key to any loans needed by ancillary economies… which means countries who rely on the World Bank would be apprehensive to engage in any financial connection to Iran…. which means China and Russia would have to find a way to fill the financial gap…. which bleeds China/Russia, and impedes any advanced interest in geopolitical expansion.

We now return you to your regularly scheduled OrangeManBad crisis.

Carry on.

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House Judiciary Committee Ranking Member Doug Collins writes a letter to Chairman Jerry Nadler smartly using transparency to call his bluff.  First the letter:

(Link to Letter)

Indeed, the way to diffuse the politicization and weaponization of innuendo within the Mueller report is to specifically get Robert Mueller in front of the committee and ask him questions directly.

This is exactly the correct approach to preempt a summer of nonsense.

If Mueller is in front of the committee first, all of the downstream manipulations by those who are part of the Mueller assignment become worthless.  It is good to see Representative Doug Collins smartly deconstruct the plans and schemes of Pelosi, Schiff, Cummings and Nadler… by giving them what they say they want, but actually don’t.

Another Captain Obvious approach being generally overlooked, is the conspicuous absence of the soft-coup team in media.

Where is Lisa Page? …Peter Strzok? ….James Baker?  ….Nellie Ohr? …Etc.

Why don’t the media have them appearing for interviews to highlight just how horrible President Trump’s grand scheme was?

Why are panel discussions from high-brow Washington DC think tanks not petitioning Page, Strzok, Baker, Ohr, or any other member of the network to appear and discuss the ramifications of having to investigate Trump’s Russia conspiracy/collusion matters?

The Russian election interference efforts were horrible right?  How come we are not hearing from the front-line soldiers who were dispatched to defend our interests?

Why are the satellite trucks missing from in front of the witnesses houses?  These are key people who would be able to outline how terrible Trump plotted to usurp the election.  Why doesn’t the media have a desire to track them down for comment on the Mueller report as a precursor to the report release?

There was a grand Trump-Russia conspiracy right? ….right? …So where’s the media interest in advancing that narrative through the use of those who would have been closest to the work?

The Mueller investigation begun in May 2017 and was an extension of the DOJ and FBI team’s work that begun in July 2016 right?  …So why are we not hearing from the people who were directly on the front-lines of that investigation?  They are no longer in government; they are free to talk…

So where’s the lengthy investigative reporting on 60 Minutes with those people who are no longer inside government and completely free to tell their story of how hard they worked to protect the country from a possible Trump-Russia conspiracy?

Think about it….

Why the conspicuous absence of media?

For some funny reason they don’t seem to be interested in the story behind the DOJ and FBI’s effort to save our nation from Donald Trump…. why is that?

Why doesn’t the media embrace the available sunlight?

During a bond hearing today prosecutors say the FBI is still investigating whether a 32-year-old Yujing Zhang, the Chinese woman accused of lying to illegally enter President Trump’s Mar-a-Lago estate in Florida, is a spy.

After a search warrant, additional spy tech was found in her hotel room including: $7,500 in one hundred dollar bills; a signal detector device to find hidden cameras; nine USB drives, five SIM cards and an additional cell phone.  Sketchy… all of it.

(Via CBS) A federal prosecutor says a Chinese woman who was arrested for illegally entering President Trump’s Mar-a-Lago club had a device to detect hidden cameras in her hotel room when Secret Service agents searched it.

Speaking at Yujing Zhang’s bail hearing Monday in West Palm Beach, Florida, prosecutor Rolando Garcia said agents also found U.S. and Chinese currency in her room, along with nine USB drives and five USB cards. She’s charged with lying to a federal agent and illegal entering.

Secret Service agents arrested the 32-year-old woman on March 30 after they say she gained admission by falsely telling a checkpoint she was a member.

Inside, they say she told a front-desk clerk she was there for a nonexistent Chinese American event. She was arrested after agents say they found her carrying four cellphones, an external hard drive and a thumb drive with computer malware installed.

The purpose of the hearing Monday is to determine if Zhang should be released on bond. Federal prosecutors believe she’s a flight risk.  (read more)

A little backstory…  Long-time CTH readers will note we have been recommending since candidate Trump first announced, when Donald Trump won the presidency one of the priorities should be to put the Secret Service back into the U.S. Treasury Department.

The reasoning for our recommendations beginning in 2015 was simple: the scale of opposition to an outsider as President would be off-the-charts.  DHS is a multi-layered matrix of conflicting political interests and career bureaucrats with internal agendas.

The recently visible political bias within the FBI is an example of the same issues likely to exist within another massive bureaucracy of the DHS.  Removing the U.S. Secret Service, and putting them back into Treasury, would give them operational independence and renewed clarity of purpose.  Current structures are just too sketchy.  That said, here’s the latest…

(CNN) United States Secret Service director Randolph “Tex” Alles is being removed from his position, multiple administration officials tell CNN.

President Donald Trump instructed his acting chief of staff, Mick Mulvaney, to fire Alles. Alles remains in his position as of now but has been asked to leave.

The USSS director was told two weeks ago there would be a transition in leadership and he was asked to stay on until there was a replacement, according to a source close to the director.

Secret Service officials have been caught by surprise with the news and are only finding out through CNN, according to the source.

White House press secretary Sarah Sanders said later Monday that Trump has picked James M. Murray, a career USSS official, to replace Alles. (read more)

 

Statement from White House:

(link)

There has been something more opaque happening in the background recently…. This story is likely connected to several other elements yet to fully surface.  President Trump has excellent instincts.

According to multiple media reports, with a growing crisis at the U.S-Mexico border, Homeland Security Secretary Kirstjen Nielsen has resigned and President Trump has just confirmed via tweet:

UPDATE: Resignation letter below

(Source Link)

National Economic Council Chairman Larry Kudlow appears on Face The Nation to discuss issues with the U.S-Mexico border and possible economic ramifications if the security issues are not addressed. Additionally, Kudlow discusses the USMCA trade deal and the status of current negotiations with China.

So, Democrats and The Big Club want to play Lawfare with the border crisis?  Well, this is not an ordinary President.  In a move that is straight out of the Alinsky ‘make them play by their own rules‘ playbook, President Trump enforces the rules.

Amid a crisis of growing consequence, President Trump announces deployment of additional 750 Border Agents to U.S-Mexico specific ports of entry:

What President Trump is doing here is a process colloquially called extreme compliance. It is a strategy usually deployed by left-wing activists.  There was an example a few years ago of a group of drivers driving the speed limit, not an single MPH faster, on a six lane highway.  Every car went the speed limit and only the speed limit; not a single car broke the law, but traffic backed up for miles.

Enforcing rules/laws, and not breaking them, creates consequences.  In the example of opening up all points of entry to CBP checkpoints, well, that leads to consequences.  In a rather prescient CTH comment, the possibility of this approach was predicted:

Extreme Compliance – If the President wants to … he might have another card up his sleeve. There are interior checkpoints operated by the border patrol on the I5 and I15 (northbound) freeways. These are the only routes out of the San Diego area to Orange and Riverside counties and all points past them.

Moreover, when they are operating traffic backs up for miles. Imagine if they were operating continuously and more deliberately then normal (due to the increased border crossings). Traffic would come to a complete halt from San Diego to Orange and Riverside counties.

Republicans refuse to accept that normal political back and forth no longer applies. The political environment is a knife fight and we all know what the rules are for that.

Funny how that happens….