There will obviously be another media cycle decrying crisis at the White House with the announcement that National Economic Council Director Gary Cohn is departing.

However, for those who follow the administration closely, this was a foregone conclusion; the MAGAnomic “America First” policy has a specifically timed exit ramp for just this purpose.

We have previously outlined the relationship between President Trump and Gary Cohn HERE – Along with what each of them brings to the perspectives of the other.  In addition, the larger Trump economic policy always held two distinct aspects:

1. The financial aspects – taxes and monetary policy stability; or perhaps more succinctly the Wall Street aspect.
2. The trade, jobs and manufacturing aspects – trade policy; or perhaps more succinctly the Main Street aspect.

The implementation of Trump’s economic policy involves those two elements: Taxes and Trade. Inside the Trump administration there are economic policy advocates who agree on the tax element, but disagree on the trade element. Economic adviser Gary Cohn is an example.

The Wall Street crowd align with Trump on taxes, but fundamentally split from him on trade. The combined Trump policy is part of the larger America-First initiative, but some within the economic team only agree with half of the aggregate policy. This is why there is a split.

As previously noted, with the tax reform proposals in place (the basis for domestic economic investment), the focus of Trump’s economic platform turns specifically to Main Street. This policy split is what makes President Trump so stunningly unique amid politicians. POTUS Trump splits from the traditional republican economic outlook on matters surrounding Main Street’s best interests.

Inside this dynamic, and the goal to restore a ‘balanced’ U.S. economy, is where the importance of Gary Cohn diminishes and the role of Commerce Secretary Wilbur Ross elevates. Secretary Ross is the person creating the fulcrum in the balanced economy reset.

POTUS Trump and Secretary Ross always knew they would need to jettison part of the administrations’ economic team once they accomplished, and moved past, tax reform.

Their focus now is laser targeted policy toward Main Street. Consider this ‘Phase-2’

We are now inside phase-2 of the total policy execution. Secretary Ross outlined how the ‘America First’ economic policy and phase-2 platform engages with the global community during a panel discussion at the World Economic Forum in Davos, Switzerland in January.

The corporate media, even the financial media, never highlighted the severity expressed by Wilbur Ross at Davos – because the Main Street policy he was explaining is directly against their interests. During the Davos World Economic Forum, Ross conveyed to the larger multinational interests an explanation of the high-level shift in U.S. trade policy, and reinforced the Trump Doctrine of economic nationalism.

Secretary Ross told the panel: “The Chinese for quite a little while have been superb at free-trade rhetoric and even more superb at highly protectionist behavior. Every time the U.S. does anything to deal with a problem, we are called protectionist.”

“Protectionists” the opposition was predicted to shout by Ross in January. Well, cue the audio visual demonstrations over the past few days surrounding Steel and Aluminum tariffs.

Also at Davos in January, after three decades of President Trump outlining his trade views, secretary Ross accurately said President Donald Trump has a forceful leadership style that some people don’t like. “We don’t intend to abrogate leadership, but leadership is different from being a sucker and being a patsy. We would like to be the leader in making the world trade system more fair and more equitable to all participants” Ross said.

Secretary Ross also challenged the panelists, including World Trade Organization Director-General Roberto Azevedo and Cargill Inc. CEO David MacLennan, to name a nation that’s less protectionist than the U.S. – – – He got no responses.

Not taking any guff, Secretary Ross then cited a study of more than 20 products that showed China had higher tariffs on all but two items on the list, and Europe all but four. The panel sat jaw-agape at Ross’s delivery of irrefutable facts to the audience. “Before we get into sticks and stones about free trade we ought to first talk about, is there really free trade or is it a unicorn in the garden,” said Ross. Again, no response from the panel.

Despite the tariffs Trump imposed in January on solar panels and washing machines; and despite the proposition of Steel and Aluminum tariffs, China is planning for a “bumper year” for new trade deals, according to China’s own Commerce Ministry.

For the past 30+ years, DC politicians have been selling out the U.S. economy to corporate interests, Wall Street and multinationals. President Trump is simply saying “no more”, and finally putting a stop to it. They hate him. He doesn’t care.

Dear Ambassador Lighthizer, love ya’ but enough already.  After eight months, and seven rounds of negotiations, only six trade chapter agreements -out of 30- have been closed.  It’s an election year in Mexico (July), Canada and the U.S. (November).

Time to cut bait; call the baby ugly; end the nonsense; stop the backslapping; put everyone out of their diplomatic misery, and finally make a formal NAFTA exit announcement in Washington DC.

Today, round #7 ends in Mexico City with no progress. Surprise fail.   Here’s the trilateral presser (sorry, poor audio):

Other than the progressive Canadian ‘princess rainbow-sparkles’ stomping her feet and promising targeted political trade retaliation for U.S. Steel and Aluminum tariffs, there’s nothing newsworthy within the entire public conference.   Below is a transcript of Ambassador Lighthizer’s full remarks as delivered.

Ambassador Lighthizer: Good Afternoon.

Let me begin by commending Secretary Guajardo for a terrific job hosting this seventh round of negotiations here in Mexico City. It is a privilege to return to this great city.  Not long after I was last here, Mexico was struck by devastating earthquakes.  Your nation’s rapid recovery from that tragedy shows the great strength of the Mexican people.  You deserve our praise for that and our continued prayers and support.

I would like to thank both of you — Secretary Guajardo and Minister Freeland — for your hard work and for the hard work of your able staffs.  We have to keep in mind that there were several hundred people working very long hours for several days during the course of this process.  We are dealing with a large number of difficult issues, very technical issues, and I appreciate the efforts made by all negotiators.

In spite of this hard work, we have not made the progress that many had hoped in this round.  We have closed out only three additional chapters: Good Regulatory Practices, Administration and Publication, and Sanitary and Phyto-sanitary Measures.  We have also completed work on sectoral annexes related to chemicals and proprietary food formulas.  And we are making substantial progress on Telecommunications and Technical Barriers to Trade.  We have also agreed to include a chapter on energy.

These chapters are important and provide further evidence that all three countries want to upgrade and modernize NAFTA.  But to complete NAFTA 2.0, we will need agreement on roughly 30 chapters.  So far, after seven months we have completed just six.  Now granted, these things tend to converge more towards the end of a negotiation.

As I have said since August, we have two major goals in these negotiations.  First, we want to update NAFTA to address modern trade issues.  All three countries agree that NAFTA is outdated, and I believe we should be able to reach agreement on new issues like digital trade, labor, and environment, intellectual property, and much more.  We urge all parties to move more quickly on these issues.

Second, we believe that NAFTA should be rebalanced.  This has been a longstanding U.S. concern about the treatment of our workers and businesses.  From our point of view, among other things, changing the agreement so that it no longer encourages outsourcing, developing rules of origin that will fairly treat our manufacturing sector and workers, and reshaping the rules of government procurement are very important.  We also need to make more progress on these points to conclude a new NAFTA.  We continue to stress the need to act quickly.

Now our time is running very short.  On July 1, as everyone here knows, Mexico will choose a new president.  That campaign as I understand it begins in earnest just next month.  But Mexico is not the only NAFTA country in the midst of elections.  Both Ontario and Quebec have elections scheduled later this year.  Finally, the United States has mid-term elections coming up in November.  All of this complicates our work.  I fear that the longer we proceed, the more political headwinds we will feel.

I also note that in all three countries, reaching an agreement at the negotiating table is only part of the process.  In the United States, after an agreement in principle is concluded, our laws require public disclosure of text, further consultations, and numerous reports before it can be considered by Congress.  Thus, in the U.S., we must resolve our outstanding issues soon to maintain the possibility of having this measure be considered by the current Congress.

As President Trump has said, we hope for a successful completion of these talks, and we would prefer a three-way, tripartite agreement.  If that proves impossible, we are prepared to move on a bilateral basis, if agreement can be made.

We have tried to be clear and very specific about what we hope to see in a new NAFTA.  We are prepared to work continuously to achieve a breakthrough.  I understand that these talks are not easy for anyone.  Each of us has our own political concerns.  But we are at the point where we have very important decisions to be made.  If the political will is there, I am certain that we have a path to a rapid and successful conclusion.

Thank you.

We are nearing the timeline apex for release of the decision/announcement on a U.S. NAFTA exit. Trade adviser Peter Navarro appears on Fox Business to discuss the pending Steel and Aluminum tariff while President Trump tweets concerns about NAFTA renegotiation; which enters Round #7 this week.

The steel tariffs are targeted toward national economic security; the Wall Street financial class are apoplectic because a firm administration stance on Steel and Aluminum tariffs indicates the larger trade perspective on all bilateral trade deals.

New Twitter Thread on the NAFTA Fatal Flaw – HERE