A very confident Treasury Secretary Steven Mnuchin appears on CNBC for a wide-ranging interview on current economic subjects. Within the discussion [14:00] Secretary Mnuchin affirms the U.S. economy is nowhere near “full employment”; an economic reality which highlights how much labor statistics were manipulated by political ideologues the prior administration(s).
Additionally, Secretary Mnuchin discusses the administrations’ focus on ‘reciprocal trade deals’ as the cornerstone of new trade constructs. This is a seismic shift in U.S. trade position. The secretary replaces the word “globalism” with a more nuanced “world-wide”; and “economic patriotism/nationalism” is replace with the word “territorial”.
Also worth noting is the larger dynamic of “intellectual property” (vis-a-vis China) and how the inherent Trump policies therein overlay trade positions between the U.S. and China. As we have previously mentioned the USTR Lighthizer 301 investigation into China could be exponentially more significant than Steel and Aluminum tariffs. Secretary Mnuchin confirms this aspect albeit with a measure of necessary opaqueness.
Leo Gerard, the President of the United Steelworkers Union, talks to a very frustrated Chuck Todd about the effect of President Trump’s new tariffs and his appreciation therein.
Chuck Todd has all his Media Matters talking points prepared to outline his narrative; however, unfortunately for the toad, he came up against a very knowledgeable union leader with a solid grasp of the details and important specifics. WATCH:
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As you can see from President Leo Gerard’s comments he well understands the value of Commerce Secretary Wilbur Ross, U.S. Trade Ambassador Robert Lighthizer and administration trade strategist Peter Navarro. The next phase of MAGAnomic Main Street trade initiatives involves global “trade reciprocity” advancement.
The statement tonight by South Korean National Security Adviser Chung Eui-yong is so jaw-dropping in significance it has left the professional diplomatic apparatus stunned.
A year of targeted and strategic geopolitical policy execution by President Trump, Secretary of State Rex Tillerson and U.N. Ambassador Nikki Haley has resulted in North Korean leader Kim Jong-un accepting denuclearization and requesting a meeting with President Trump to achieve terms therein.
Yeah, HO-LEE-CATS is an understatement. The possibility of a willingly denuclearized Korean peninsular is such an astounding policy victory; it is difficult to conceptualize. Here’s the statement from South Korea’s Chung Eui-yong:
“Good evening, today I had the privilege of briefing President Trump on my recent visit to Pyongyang, North Korea. I’d like to thank President Trump, the vice-president and his wonderful national security team, including my close friend General McMaster.”
“I thanked President Trump that his leadership, and his maximum pressure policy together with international solidarity, brought us to this juncture. I expressed President Moon Jae-in’s personal gratitude for President Trump’s leadership.”
“I told President Trump that in our meeting North Korean leader Kim Jong-un said he is committed to denuclearization. Kim pledged that North Korea will refrain from any further nuclear or missile tests; he understands that the routine joint military exercises between the Republic of Korea and the United States must continue. And he expressed his eagerness to meet President Trump as soon as possible.”
“President Trump appreciated the briefing and said he would meet Kim Jong-un by May to achieve permanent denuclearization.”
“The Republic of Korea along with the United States, Japan and our many partners around the world, remain fully and resolutely committed to the complete denuclearization of the Korean Peninsular.”
“Along with President Trump we are optimistic about continuing a diplomatic process to test the possibility of a peaceful resolution. The Republic of Korea, The United States and our partners stand together in insisting that we not repeat the mistakes of the past; and that the pressure will continue until North Korea matches it’s words with concrete actions. Thank You.” (link)
Korea Times – North Korean leader Kim Jong-un has expressed willingness to meet U.S. President Donald Trump for talks over denuclearization, South Korean officials visiting Washington said, Friday.
In response, Trump said he would like to meet him by May, they said.
National Security Office chief Chung Eui-yong, one of President Moon Jae-in’s envoys to Pyongyang who is now visiting Washington, said in a press briefing at the White House that he delivered such messages of Kim to Trump.
Kim also said he was “committed to denuclearization” and would “refrain from any further nuclear or missile tests,” Chung said. (link)
“Complicated business folks,… Complicated business”
When it comes to the use of economic leverage to create U.S. national security outcomes, well, we are learning at the knee of an economic master player. {Deep Dive}
Commerce Secretary Wilbur Ross appears for an interview with Trish Regan immediately after President Trump signed the Presidential Proclamation to advance Steel and Aluminum tariffs to protect and expand American industry. [DEEP DIVE]
Ms. Regan is one of the financial business analysts who have slowly evolved away from the insufferable Wall Street/U.S. Chamber of Commerce ‘globalist’ viewpoints, which was/is entirely built upon a false premise. Thankfully Ms. Regan joins the ranks of economic patriots Charles Payne and Lou Dobbs. We’ll keep working on Maria Bartiromo.
In this interview Secretary Ross elevates the discussion beyond just Steel and Aluminum and begins to expand -and emphasize- the perimeter of an entirely new American approach toward trade, “reciprocity“. Indeed for the very first time in this interview Secretary Ross gives a preview into what will follow and how ‘reciprocity’ will be applied.
“President Trump is taking action today to protect both our national security and industries critical to our economy. The President’s decision regarding the steel and aluminum Section 232 reports are the result of a long and well-thought-out process led by the Commerce Department. Once again, President Trump is keeping his promises and standing up for American families, American businesses, and American workers.” ~ Commerce Secretary Wilbur Ross
The specific target has always been China; and POTUS Trump, Commerce Secretary Wilbur Ross, USTR Robert Lighthizer and Trade Policy Adviser Peter Navarro know to hit their target they have to get past the hurdle of trans-shipments of Steel to proxy nations by China to avoid the tariff.
So what does POTUS Trump do…. he takes the position of the tariff opponents and amplifies it. Trump’s trade policy opponents, realizing something was going to happen regardless of their opposition, started demanding “targeted tariffs”; that is, tariffs applied against target nations. POTUS Trump brilliantly spins their position and says: ok, let’s target by granting “exceptions” to the tariffs.
What POTUS will announce is “targeted exemptions” to the trade tariffs on Steel and Aluminum. Not “targeted tariffs”, but rather “targeted exemptions”.
The exemption approach puts more power in the hands of Team ‘America-First’ than targeting the steel dumpers directly. Team Trump will reward good behavior.
Any nation that acts like a Chinese proxy in the trans-shipment problem will not get relief from the tariffs. However, the nations that manufacture and trade honestly will be granted tariff relief. This allows Team Trump to evaluate the origin of the Steel used by countries that want to import their finished goods into the U.S. If they are using Chinese Steel, the tariff applies. If they are using their own manufactured steel, there is no tariff.
See how brilliantly that works?
By taking the position of his opposition and modifying it to enhance his own policy, POTUS has gained leverage. The U.S.A. now holds the strength of enforcement based on American determination of origin of their material. If the producing nation doesn’t follow the Trump rules, they will pay the tariff. In essence, Trump is helping all manufacturing nations by positioning the United States as the “steel compliance office”. We will determine who is using Chinese Steel and who is not.
This also gives Trump, Ross and Lighthizer massive leverage against China. No country will want to lose access to the U.S. market by engaging in the sketchy trans-shipping arrangement with China. POTUS Trump holds all the cards.
This approach also puts Mexico and Canada (NAFTA) on notice that if they use Chinese steel they will face a tariff despite our NAFTA agreement. Again, more leverage.
Something that now seems ordinary, until you think about it historically – and realize it is actually, stunningly, extraordinary, is the level of transparency President Trump has delivered to his administration. Citizen government by a person who understands the value of the camera and the opportunities of the microphone.
Here President Trump frames a cabinet meeting with the media for over 20 minutes while outlining initiatives and objectives. No prior president has ever allowed even a small percentage of the deliberative access delivered by President Trump. POTUS keenly dominates the narrative; outlines the milestones; establishes the expectations and summarizes the issues.
About mid-way through this video is just captivating, really. Must Watch:
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If you stand back and think about it, what President Trump is doing is remarkable. POTUS has lulled us into seeing this as commonplace, it’s not; it is anything but common.
President Trump will sign a trade-section 232 proclamation today to elevate Steel and Aluminum manufacturing to be of national security status. The overall trade initiative which stems from the 232 proclamation will be a 25% trade tariff on imported steel and a 10% trade tariff on imported aluminum. POTUS Trump will control exemptions.
The trade announcement is anticipated at 3:30pm in the White House today.
♦Three days ago (March 5th, 2018) South Korean National Security Adviser Chung Eui-yong met with North Korean leader Kim Jong-un in Pyongyang. ♦Earlier today Chung Eui-yong met with President Trump’s National Security Adviser H.R. McMaster and briefed other senior members of the Trump administration. ♦Moments ago President Trump told the media to anticipate a “big announcement from South Korea” at 7:00pm EST.
Given the time of day for the announcement, it must be very good news for Team Trump and likely surrounds discussions between the South Korean officials and the DPRK about denuclearization talks. [7:00pm EST is 5:00am Friday in South Korea.]
(Above and below) South Korea National Security Chief Chung Eui-yong visiting the White House earlier today, for a briefing with HR McMaster. –source–
…. This follows South Korean chief delegator Chung Eui-yong meeting with North Korean leader Kim Jong-Un on March 5th, 2018, during their meeting in Pyongyang, North Korea. (pictured below) –source–
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)
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