May 17, 2019
President Trump delivers remarks to the National Association of REALTORS Legislative Meetings and Trade Exposition.
Tag Archives: The Forecaster
President Trump Removes Steel and Aluminum Tariffs From Canada and Mexico….
May 17, 2019
A combination of the NAFTA “Fatal Flaw” & transnational Chinese shipments, was always at the heart of President Trump placing steel and aluminum tariffs on Canada and Mexico during negotiations that culminated in the USMCA trade agreement. The goal was to block China from dumping product into the U.S. through the doors of Canada/Mexico.
Within the USMCA President Trump and Robert Lighthizer placed a specific rule Article 32:10 which grants the U.S. the right to veto (control) Canadian and Mexican purchase agreements with “Non FTA Market Countries”, ie. China.
This Article 32:10 rule is at the core of the USMCA agreement. However, after the USMCA agreement was reached President Trump kept the Steel/Aluminum tariffs in place. For those who don’t understand Trump (insert Chrystia Freeland here) the question was always: why?
Quite simply the answer behind the question was President Trump’s retention of leverage. Yes, in 2018 the USMCA was agreed to; however, the USMCA was not ratified by either Canada or Mexico…. it was only an agreement. Why would Trump remove critical leverage on an initial promise.
Trump is not a politician; he’s a businessman who knows promises are paper until they become action. Additionally, President Trump is a tactician; the tariff leverage was held until such a time as removing it would generate an immediate gain in national compliance toward his trade objective… That’s the action. Today:
(Bloomberg) President Donald Trump said the U.S. will lift steel and aluminum tariffs on Canada and Mexico, boosting efforts to encourage lawmakers to ratify a new North American trade deal.
“I’m pleased to announce that we’ve just reached an agreement with Canada and Mexico and will be selling our product into those countries without the imposition of tariffs or major tariffs,” Trump said at an event Friday. “Hopefully Congress will approve the USMCA quickly.”
In a joint statement Friday, Canada said it will lift retaliatory duties on U.S. products as part of the deal, which will take effect within two days. Mexican Deputy Foreign Minister Jesus Seade, in a Twitter post, welcomed Trump’s removal of the duties. Both nations suggested it would open the way for their lawmakers to approve the new trade pact.
The move will lift the 25% steel and 10% aluminum tariffs the U.S. placed on the two trading neighbors almost a year ago in the name of national security. The decision sparked tit-for-tat duties from Canada and Mexico on U.S. farming goods and other products, and became an obstacle for lawmakers in all three nations to ratifying the U.S.-Mexico-Canada Agreement.
As part of the agreement, the U.S. will be able to re-impose the tariffs on metals imports if not enough is done to prevent any surge of metals imports beyond historical levels. The nations have also agreed to ramp up efforts to trace where the metals have come from originally, to stop the diversion of shipments from other nations to dodge tariffs.
The enforcement system will aim to advantage primary steel and aluminum producers in the three-nation trading bloc to ensure that the metal is melted, poured or smelted regionally. (read more)
President Trump is strategic. The timing is perfect as the U.S. has shown the world the administration’s response to China is unrelenting. As a result of Beijing failing to uphold their end of the prior agreement between Vice-Premier Liu He and USTR Robert Lighthizer, the negotiations with China have stopped.
The consequence of China failing to reach a free, fair and reciprocal trade agreement with the U.S., with strong enforcement mechanisms, means that China remains a “non market-based economy”. Tariffs against China now increase, and both Canada and Mexico are specifically accountable under the USMCA to retain the U.S. market position toward Chinese goods.
In essence, if Mexico or Canada violates USMCA Article 32:10, they will suffer similar consequences as currently visible toward China. The U.S. will enforce all the regulatory and compliance verification to ensure that Canada and Mexico do not engage in transnational shipments of Chinese products. That is the “enforcement system” that both nations will adhere to enjoy the benefits of steel/aluminum tariff removal.
Mark Knoller✔@markknoller
According to the Canadian statement, the US and Canada will “implement effective measures to prevent the importation of aluminum and steel that is unfairly subsidized and/or sold at dumped prices.”
President Trump and Secretary Wilbur Ross created the tariffs out of thin air. Yes, they simply created killer trade leverage… Now, two years later, in exchange, for removing a punishing trade restriction that (A) previously didn’t exist; and (B) was crushing both economies; Canada and Mexico remove all countervailing duties which further opens their markets to U.S. goods…. and, simultaneously, agree to the terms which were at the core of the original demands, intents and purposes of President Trump.
USTR Washington, DC –Today, the United States announced an agreement with Canada and Mexico to remove the Section 232 tariffs for steel and aluminum imports from those countries and for the removal of all retaliatory tariffs imposed on American goods by those countries. The agreement provides for aggressive monitoring and a mechanism to prevent surges in imports of steel and aluminum.
If surges in imports of specific steel and aluminum products occur, the United States may re-impose Section 232 tariffs on those products. Any retaliation by Canada and Mexico would then be limited to steel and aluminum products.
This agreement is great news for American farmers that have been subject to retaliatory tariffs from Canada and Mexico. At the same time, the Agreement will continue to protect America’s steel and aluminum industries. (USTR)
Canada and Mexico can no longer broker themselves as back-doors to the U.S. market; and at any given time, if either nation flinches, a future administration can pull out Article 32:10, enforcement entirely in the control of the United States, and POOF insta-leverage.
Don’t forget President Trump’s entire purpose for eliminating NAFTA was to stop Canada and Mexico from exploiting their access to the U.S. market at our expense. Initially both nations said they would never agree to terms that undercut their independent abilities. Here we are two years later, and they have agreed to the exact terms that underlined the original foundation of Trump’s position.
President Trump, Secretary Ross and Ambassador Lighthizer took the entire North American business community on a scenic two-year tour deep inside the land of leverage.
Greatest economic President in modern history.
A businessman.
A Titan.
…”Complicated business folks, …complicated business”….
Why Trump Will Win the US China Trade War—Stephen Moore
The Income Tax is Destroying the World Economy
Armstrong Economics Blog/The Hunt for Taxes
Re-Posted May 17, 2019 by Martin Armstrong
It is imperative that we MUST eliminate the income tax. It is a purely a Marxist development that is destroying the world economy. The income tax has become such a tyranny that our liberty, freedom of movement, and world economic growth are all at great risk. Never before in the history of human civilization do we find an income tax. It is true that Ben Franklin once said that the two certainties in life were death and taxes. It is equally true that taxes, in general, have been around since the beginning of civilization. We do know that the earliest recorded tax was implemented in Mesopotamia over 4500 years ago, where people paid taxes throughout the year in the form of livestock, which was the preferred currency at the time. The ancient world also had inheritance taxes, also known as estate taxes or death taxes. The earliest recorded evidence of a death tax came from ancient Egypt (700 BC), where they charged a 10% tax on property transferred at the time of death.
The most serious crisis we face is that with the dawn of Marxism (Communism/Socialism) the way we pay taxes has changed significantly. Yet, one for the record took place in 2006 when China eliminated what was the oldest existing tax in history. The agricultural tax was created 2,600 years ago and was eliminated in 2006 to help improve the well-being of rural farmers in China.
Taxation in the United States can be traced to the colonists when they were heavily taxed by Great Britain on many things from tea to newspapers. Legal and business documents were required to display a Stamp Tax. Most colonists objected to this form of taxation, since they had no political input about the creation of new taxes, giving rise to the term “taxation without representation.” After the American Revolution, the new government of the United States passed the Stamp Act of July 6th, 1797, which levied taxes on wills, personal estates, and the infamous death tax — the transfer of possessions of the deceased. The death tax only lasted 5 years and was abolished in 1802.
The first issue of US tax stamps occured on July 1, 1798, and had the name of the state incorporated in the design. This issue lasted until February 28, 1801. The highest denomination was $10. The second issue was authorized by the Act of April 23, 1801, and lasted from March 1, 1801 until June 30, 1802. It also carried denominations up to $10. The third federal issue was imposed by the Act of August 2, 1813, and was in effect from January 1, 1814 to December 31, 1817.
By the American Civil War, embossed tax stamps were replaced by printed tax stamps. Because of the demands upon the government to fund the Civil War, Congress passed the Revenue Act of 1862, which put taxes on boxes or packages of matches, perfumery, playing cards, documents, and then medicines. There was also an issue of paper printed by private firms under the supervision of the government with the tax stamp in place on checks, for example, which lasted from 1862 into 1883.
The government allowed the manufacturers to create their own stamps at their own expense. The government allowed the various companies to add 5% to 10% premiums on their products if they covered the costs of manufacturing the tax stamps. This private tax stamp system was in use until July 1, 1883, when the Act of March 3, 1883 took effect.
The first income tax was created in 1861 during the Civil War as a mechanism to finance the war effort. In addition, Congress passed the Internal Revenue Act in 1862, which created the Bureau of Internal Revenue, an eventual predecessor to the IRS. The Bureau of Internal Revenue placed excise taxes on everything from tobacco to jewelry. However, the income tax did not last and was not renewed in 1872. In the Springer v. United States 102 US 586 (1881), the Supreme Courtupheld the income tax.
Justice Swayne wrote the opinion of the court. The central and controlling question in the case was whether the tax which was levied on the income, gains, and profits was Constitutional since it forbid any direct taxation. The court played games with the words to uphold the government. It wrote: “Our conclusions are that direct taxes, within the meaning of the Constitution, are only capitation taxes, as expressed in that instrument, and taxes on real estate; and that the tax of which the plaintiff in error complains is within the category of an excise or duty.” A Capitation tax is an assessment levied by the government upon a person at a fixed rate regardless of the property, business, or other circumstances. The reasoning used was clearly overruled later which necessitated amending the Constitution in 1913.
Moreover, the Revenue Act of 1862 created a federal estate and gift tax system. Following the end of the Civil War, those taxes were rolled back but the War Revenue Act of 1898 created another death tax to raise revenue for the Spanish-American War.
An 1894 statute was ruled unconstitutional in the case of Pollock v. Farmers’ Loan and Trust Company 157 U.S. 429 (1895) delivered by Chief Justice Fuller. He wrote for the court: ” Whether the void provisions as to rents and income from real estate invalidated the whole act? 2, whether, as to the income from personal property as such, the act is unconstitutional as laying direct taxes? 3, Whether any part of the tax, if not considered as a direct tax, is invalid for want of uniformity on either of the grounds suggested? — the justices who heard the argument are equally divided, and, therefore no opinion is expressed.”
The origin of the current income tax on individuals is generally cited as the passage of the 16th Amendment, passed by Congress on July 2, 1909, and ratified February 3, 1913. It was on June 16, 1909, President William Howard Taft, in an address to the Sixty-first Congress, proposed a two percent federal income tax on corporations by way of an excise tax and a constitutional amendment to allow the previously enacted income tax. Once this Marxist concept of direct taxation was created, then the government must know everything we do, track us for it assumes we all cheat and lie, and in the process, it is hunting money globally to the point that world economic growth has been declining.
It was Obama who pushed FATCA (Foreign Account Tax Compliance Act) that requires all foreign entities to report on anything they do with Americans outside the USA or else their assets will be confiscated in the USA. The FATCA legislation was passed into law in 2010 as part of the unrelated jobs legislation known as the HIRE law. FATCA is a broad, complex set of rules designed to increase tax compliance by Americans with financial assets held outside the United States. Consequently, no American can have a bank account outside the USA, for banks will no longer accept the risk that an American failed to pay their taxes. Prior to FATCA, growth rates were generally greater than 6% reaching 7% in 2004 annually. Since then, the highest growth rate was 5.4% in 2018.
All countries are now hunting taxes and destroying would economic growth. The tax dispute UBS is in now with France will occupy them for years to come. At the end of February 2019, a Paris-based criminal court ordered UBS to pay a fine and pay 5 billion Swiss francs in damages because the big bank helped wealthy French between 2004 and 2012 to hide their money from the tax authorities. UBS has moved on. It will take years to reach a final decision. The entire Swiss secrecy policy was installed because of Hitler who made it a crime to have money outside of Germany. Hitler did not invade Switzerland nor did he have his fake court impose huge fines on Swiss banks. Today, governments no longer respect international law.
The entire direct taxation is what the Founding Fathers in the US forbid. We are now witnessing the destruction of the world economy and everyone is being hunted globally. The Common Reporting Standard (CRS) is an information standard for the automatic exchange of tax and financial information on a global level. It was put together by the Organisation for Economic Co-operation and Development (OECD) back in 2014. Its purpose was to hunt down tax evasion primarily for the European Union. They took the concept from the US Foreign Account Tax Compliance Act (FATCA), which imposed liabilities on foreign institutions if they did not report what Americans were doing outside the country.
The legal basis of the CRS is the Convention on Mutual Administrative Assistance in Tax Matters. As of 2016, 83 countries signed an agreement to implement it. First reporting took place in September 2017. The CRS has many loopholes, for countries have to sign the agreement. This has omitted the United States as well as most developing countries. Note that countries that are included are China, Singapore, Switzerland, most tax havens, and of course Australian/New Zealand as well as Canada.
As of 2018, the signing nations to avoid are:
Albania, Andorra, Antigua and Barbuda, Aruba, Australia, Austria, The Bahamas, Bahrain, Belize, Brazil, Brunei Darussalam, Canada, Chile, China, Cook Islands, Costa Rica, Dominica, Ghana, Grenada, Hong Kong (China), Indonesia, Israel, Japan, Kuwait, Lebanon, Marshall Islands, Macao (China), Malaysia, Mauritius, Monaco, Nauru, New Zealand, Pakistan, Panama, Qatar, Russia, Saint Kitts and Nevis, Samoa, Saint Lucia, Saint Vincent and the Grenadines, Saudi Arabia, Singapore, Sint Maarten, Switzerland, Turkey, United Arab Emirates, Uruguay, Vanuatu
Yield v Reason
Armstrong Economics Blog/Dow Jones
Re-Posted May 17, 2019 by Martin Armstrong
QUESTION: I see all of these people calling for a major crash of 50%+. With interest rates so low and the dividends on the Dow twice that of interest rates, does anyone look at yield anymore?
PH
ANSWER: I fully agree. The yield on the Dow Jones is 5.34%, which is about double the 10-year rate. Back in 1983, I presented these two charts that show the earnings and book value of the Dow Jones Industrials. The majority were calling for a crash and our computer warned of a Phase Transition and a 600% rise in the Dow. I was blamed for creating the takeover boom, but it was clear that the earnings were at least 5% and the stocks were trading out of a major historical low on price v book value. So earnings do come into the mix
UK Intel: On Second Thought Maybe “Huawei is a Risk to Britain”…
May 16, 2019
Funny how that happens. Less than 24 hours after President Trump declared new tech telecommunication is a national security issue; and one day after Secretary Wilbur Ross bans Huawei (and affiliates) from buying parts and components from U.S. companies without U.S. government approval; all of a sudden the UK is having second thoughts.
…Huh, go figure:
LONDON (Reuters) – China’s Huawei poses such a grave security risk to the United Kingdom that the government must not allow it to have even a limited role in building 5G networks, a former head of Britain’s MI6 foreign spy service said on Thursday.
In what some have compared to the Cold War arms race, the United States is worried that 5G dominance would give any global competitor such as China an advantage Washington is not ready to accept.
The Trump administration, which hit Huawei with severe sanctions on Wednesday, has told allies not to use its technology because of fears it could be a vehicle for Chinese spying. Huawei has repeatedly denied this.
But British ministers have discussed allowing Huawei a restricted role in building parts of its 5G network. The final decision has not yet been published. (read more)
Oh, and we are not naive enough to overlook the current status, and subsequent leverage, of the executive declassification process which might well outline how the U.K. intelligence apparatus was aligned to defeat President Donald Trump in 2016.
…”Well, where we go yuan, we go all didn’t work out… now what”?
President Trump Releases 2018 Financial Disclosure…
May 16, 2019
President Donald Trump and First Lady Melania Trump release their 2018 financial disclosure forms. Summary: They’re Rich….
Deep State – Former Trump Senior State Dept. Official Tells Beijing to Wait Until Trump is Removed…
May 16, 2019
A clear example of the Administrative State’s seditious alignment with global financial interests and DC indulgences. This is the deep state at its deepest and most statist.
Mrs. Susan Thornton, the former acting assistant secretary of state in the Trump administration, tells her Beijing audience to stop negotiating until President Trump is removed from office in 2020.
(BEIJING) […] “I want to be optimistic,” said Thornton, whose 27-year career in Washington ended in July. “I tell all our foreign counterpartsthey should keep steady, keep their heads down and wait. [They should] try to not let anything change dramatically.”
“If this skeptical attitude towards talking diplomacy continues in this administration, you might have to wait till another administration,” Thornton said at an event held by National Committee of US-China relations and Shanghai’s American Chamber. (read more)
There was a prescient article written in Politico when Thornton announced her exit from the State Department.
POLITICO […] – Former Secretary of State Rex Tillerson pushed for Thornton to lead the state’s East Asia bureau during his tenure, but then-White House chief strategist Steve Bannon tried to block her advancement. Bannon claimed she was too soft on China, but her nomination moved forward after he was ousted from the White House. Sen. Marco Rubio (R-Fla.) also said he did not want her to be confirmed. Thornton did receive a confirmation hearing, but never a vote. –link–
This type of undermining of the president by a well known top diplomat is likely why the Chinese politburo rebuked the deal put together by USTR Robert Lighthizer and Chinese Vice-Primier Liu He.
Obviously President Trump’s opposition is confident they can remove him from office; and giving advice to the Chinese who are making long-term strategic decisions with that confidence in mind.
Again, just another example of the scale and scope of the challenges faced by President Trump as he attempts to negotiate strength for the U.S. economy, and is undermined by bureaucrats who make more personal wealth selling out our nation to foreign governments.
There are trillions at stake; and former bureaucrats like Ms. Susan Thornton use their former positions to make millions at the trough even if that means advocating for the interests of a communist government.
Disappointing would be an understatement.
Those who have sold out our nation despise President Trump.
President Trump Delivers Immigration Reform Speech – White House, 2:30pm Livestream…
May 16, 2019
Today President Trump is delivering remarks from the White House on “Modernizing Our Immigration System for a Stronger America.” A new immigration proposal from President Donald Trump focuses on bolstering border security and rethinking the green card system.
The shift would favor people with high-level skills, degrees and job offers instead of relatives of those already in the country. The anticipated start time is 2:30pm EDT:
WH Livestream Link – Global News Livestream – Fox Business Livestream
CNN Reporter: Russia at War with US, but America Clueless
Published on May 15, 2019
Centinel2012 