DOJ Appears to Block Manafort Transfer to Rikers Island…


An interesting and moderately positive development in the ongoing fiasco surrounding the prosecution of Paul Manafort.  According to the New York Times, Attorney General William Barr’s top deputy, Jeffrey Rosen, sent a letter to New York state prosecutors saying Main Justice was monitoring the planned transfer of Mr. Manafort.

Following the DOJ letter, the decision to transfer Manafort to Rikers Island was reversed.

(Via New York Times) … [L]ast week, Manhattan prosecutors were surprised to receive a letter from the second-highest law enforcement official in the country inquiring about Mr. Manafort’s case. The letter, from Jeffrey A. Rosen, Attorney General William P. Barr’s new top deputy, indicated that he was monitoring where Mr. Manafort would be held in New York.

And then, on Monday, federal prison officials weighed in, telling the Manhattan district attorney’s office that Mr. Manafort, 70, would not be going to Rikers.

Instead, he will await his trial at a federal lockup in Manhattan or at the Pennsylvania federal prison where he is serving a seven-and-a-half-year sentence for wide-ranging financial schemes, according to people with knowledge of the matter. (more)

The decision to transfer Manafort to Rikers Island was yet another transparent effort by political operatives within the justice system to use extreme measures against their political opposition…. Unfortunately, the Obama legacy -via the weaponization of law enforcement- continues.

George Zimmerman, Officer Darren Wilson, The Baltimore Six, Paul Manafort, Mike Flynn and Roger Stone were/are simply targets for political retaliation by career political operatives, political ideologues, now embedded within a severely corrupt justice system.

Perhaps the decision to stop some of the extremism is a small indication U.S. Attorney General Bill Barr is attempting to restore some semblance of justice to a thoroughly corrupt enterprise.

 

State Dept. Suspends $200 Million Enhanced Aid for El Salvador, Guatemala and Honduras Pending Illegal Migration Enforcement…


While previously pledged support for the Northern Triangle region related to Homeland Security and combating organized crime will continue, the State Department suspends any further financial assistance ($200 million) until the migration crisis is resolved.

.

[Transcript at 01:28] “Next, I have a quick update for you on U.S. foreign assistance to the Northern Triangle countries of El Salvador, Guatemala, and Honduras. As you know, in March, the President concluded these countries have not effectively prevented illegal migrants from coming to the United States.”

“At the Secretary’s instruction, we continue to implement the President’s direction regarding foreign assistance for El Salvador, Guatemala, and Honduras. We completed a review, and previously awarded grants and contracts will continue with current funding. State Department assistance in support of priorities of the Departments of Justice and Homeland Security priorities to help the Northern Triangle governments take actions that will protect the U.S. border and counter transnational organized crime will also continue.

We will not provide new funds for programs in those countries until we are satisfied the Northern Triangle governments are taking concrete actions to reduce the number of illegal migrants coming to the U.S. border.

Working with Congress, we will reprogram those funds to other priorities as appropriate. This is consistent with the President’s direction and with the recognition that it is critical that there be sufficient political will in these countries to address the problem at its source. As Secretary Pompeo has said, these nations have the responsibility to take care of the immigration problems in their home country.”  (continue reading transcript)

(Tweet Link)

Trump Supporters Camping Out Ahead of Massive Orlando MAGA Rally and Festival…


President Trump will be officially kicking off his 2020 re-election bid tomorrow night in Orlando, Florida, at the Amway center.  While the MAGA rally is scheduled to begin at 8:00pm ET, campaign organizers have had such an overwhelming demand for attendance, they have turned the entire day into a MAGA festival called: “The 45 Fest”.

The Amway center, home to the NBA’s Orlando Magic, will hold between 20,000 to 30,000 depending on layout.  However, jumbo screens are being constructed outside the arena for those who attend the festivities but don’t make it inside.

There will be live music, food booths and trucks, street vendors and a day of MAGA festivity prior to the main event at 8:00pm.  According to local media people began lining up Monday morning and plan to camp out overnight amid a mass of MAGA patriots and supporters.

ORLANDO – With tents, sleeping bags and coolers of water in tow, Donald Trump supporters began lining up early Monday for Tuesday’s campaign rally in Orlando, nearly two full days before the event.

Outside the Amway Center, where President Trump will officially kick off his 2020 re-election bid at 8 p.m. Tuesday, about two dozen people and counting had staked out a spot along Division Street as of Monday morning. The line had grown to about 50 as of 3 p.m.

“This is the big one,” said Jennifer Petito, 54, of Melbourne. “This is the mother of all rallies.” Petitio, who was wearing a pink “Women for Trump” hat and a red-and-white striped fanny pack, was second in line. She said she got there around 2 a.m. — 42 hours before the rally’s start. (read more)

Gordon Chang on 2019 G20: “The Meeting of All Meetings”….


Author of ‘The Coming Collapse of China’, Gordon Chang, appears on Fox Business to discuss the mounting U.S. trade tensions with China, the fallout from the protests against Carrie Lam in Hong Kong, and the announced visit by Xi to North Korea.

Chang also sees the visit by China’s Chairman Xi Jinping to North Korea as a strategic and purposeful moment for Beijing; an attempt to find footing against the overwhelming economic punishment being delivered by U.S. President Donald Trump.

Ho-Lee-Cats, is it Happening? – Chairman Xi Announces Visit to North Korea…


Well, well, well….  Against the backdrop of everything we have been discussing about the nature of the U.S. – China – North Korea geopolitics; and considering the current position of all the players; THIS is a very interesting development:

BEIJING (Reuters) – Chinese President Xi Jinping will visit North Korea for two days from Thursday, state media in both countries reported on Monday, making him the first Chinese leader to visit in 14 years.

Neighboring China is reclusive North Korea’s only major ally, and the visit comes amid renewed tensions between the United States and North Korea over efforts to persuade Pyongyang to give up its nuclear weapons.

“Both sides will exchange views on the (Korean) peninsula situation, and push for new progress in the political resolution of the peninsula issue,” China’s official broadcaster CCTV said in a lengthy report that led the evening news. (read more)

The possibility here is one most CTH readers will immediately recognize.  Is this the predictable face-saving approach Chairman Xi Jinping has selected?

For two-and-a-half years U.S. President Trump has been working on two connected objectives: (1) removing the threat posed by North Korea by severing the ability of Beijing to use the proxy province as a weapon (Kim is hostage to China); and (2) deconstructing the growing economic influence of China.

Both issues are directly connected to national security; and both issues are being approached by President Trump through the use of economic leverage to achieve national security results.

At first blush, there’s always a possibility of Chairman Xi going to see Chairman Kim in dragon mode… looking for a way to weaponize the DPRK despite the budding relationship between Chairman Kim (hostage) and U.S. President Donald Trump.  However, that dragon perspective is blunted by the open media indications that the talks are centered around denuclearization.   So that puts more weight on the second possibility.

The second possibility, the more optimistic possibility, is that we have finally reached that point in the U.S. -vs- China economic confrontation where Chairman Xi is now facing defeat and attempting to save face, and gain a better economic outcome, by releasing his hostage.   This would be an incredible, almost unfathomable, win for President Trump; and an astounding visible affirmation that the year’s long strategy has been successful.

When we began watching this journey in 2017, there were indications President Trump was working specifically to create an outcome of a hostage release.  And in the years that have followed there have been multiple highly-nuanced indications of the strategy Trump was following.  This visit by Chairman Xi to North Korea in advance of the G20 summit has all the indications of this could very well be the culmination; ending exactly where President Trump has intended. As we noted in this graphic two years ago:

Caution is the word of the day.  After all, this is the cunning and duplicitous China we are talking about here…. they have a history of using deceit and stall tactics to achieve victory.  However, President Trump has shown he is well aware of what lies behind the panda mask.

That said, it’s worth watching very closely now to see the details of the G20 and whether Xi and Trump actually meet.

Beijing has announced Chairman Xi and South Korean President Moon Jae-in are scheduled for a meeting….  and we know on the issue of DPRK hostage release Chairman Xi will need to save face very carefully.

One way for Xi to avoid the appearance of acquiescence to Trump would be for him and Beijing to place the victory at the feet of Moon Jae-in instead of President Trump.   I would almost guarantee, if indeed Xi is now giving up his hostage, China will position themselves as magnanimous panda and South Korea as the beneficiary.

“Peace is the Prize” ~ Donald Trump

Ultimately, I don’t think President Trump really cares about who gets credit for the victory and hostage release of Chairman Kim.  The world will know, though the media may not assign, the victory is only because President Trump has outwitted Chairman Xi and his communist regime…. and Trump did that though strategic economic pressure.

We should be able to get some indications from public and media discussion ahead of the G20 summit in Japan this month, as to how -specifically- the hostage release will take place; and/or the terms and conditions within that release.   Will Chairman Xi meet with President Trump?

…or will Xi tell Kim (or an emissary) to inform Trump there will be no meeting, but the face-saving terms and reasons are understood by all the principals.

Incredible development.

Lastly, as it relates to the continued U.S. -vs- China trade and economic confrontation, if Chairman Xi expects POTUS Trump to retreat from the massive geopolitical leverage he has created that won’t happen.

President Trump has been openly, albeit with coded messages, telling the world North Korea is no longer a threat.  The secondary purpose of making those statements is to blunt the value of Xi giving up his hostage.  In essence, Trump has been telling Beijing: it’s a victory already achieved, so magnanimous panda isn’t providing Trump anything of measurable value.

Remember, two connected objectives: (1) removing the threat posed by North Korea by severing the ability of Beijing to use the proxy province as a weapon; and (2) deconstructing the growing economic influence of China.  With #1 achieved, President Trump still fully intends to get #2.  Heck, Trump has spent 30-years openly advocating for the principle of restoring American wealth.  That means the economic pressure will continue until Beijing is defeated.

China vs the US in Trade Negotiations


QUESTION:

Mr Armstrong

In your opinion of Trump’s trade war policy, you disagree with him because it makes China look weak. What is your solution when the real problem is China stealing intellectual property and they have been called out on it. A person or party always looks weak when they get caught doing something illegal or immoral. Is a little dose of humility and acknowledgment of the error too much to ask?

JM

ANSWER: When dealing with nations, you really cannot humiliate the other side. The best way to deal with that is privately to make it appear there is cooperation and dignity. Both sides must save face. This is not a brawl nor is it a negotiation in a lawsuit. I believe that there is a huge cultural divide and that is a big problem. Many in the private sector in Asia do not negotiate the same way things are done in the West.

The best way is to negotiate behind the curtain and allow the victory to be shared. Head to head confrontation will never win. They cannot afford to yield. This is the same problem with Russia. How can anyone expect Putin to say, “Oh, sorry, you are right. I will yield to your sanctions!” There is less than a zero percent chance of that EVER happening and it would be political suicide for Putin to adopt such a policy in Russia.

I have been in that position of trying to negotiate between two foreign governments. It is not an easy task. One government asked me to see what I could do because I knew the leadership in the other. You must respect the dignity of each player when you are at that level of negotiation

Sunday Talks: Peter Navarro -vs- Charles Payne…


Charles Payne, filling in for Maria Bartiromo, interviews White House Manufacturing and Trade Policy advisor Peter Navarro.  Unfortunately the interview begins with a discussion of tariff polling….  The vast majority of Americans have no understanding of the impact of tariffs and/or MAGAnomic policy; they only know the economic outcomes they can feel.

Mr. Navarro walks through how tariffs interact with global supply chains and the financial manipulation by multinational corporate interests.

Sunday Talks: Secretary of State Mike Pompeo -vs- Chris Wallace…


Secretary of State Mike Pompeo appears on Fox News Sunday to debate antagonistic DC Swamp Guard Chris Wallace.  The primary topic was the recent attacks on shipping tankers by Iranian elements in the Gulf of Oman.

Additionally, Secretary Pompeo discussed the protests in Hong Kong against the growing influence from Beijing; the issues with North Korea to achieve a positive outcome with Kim Jong Un; the New York Times story on U.S. active measures against Russia; and the nonsensical -hypothetical- foreign opposition research issue.

.

Secretary Pompeo also appeared on Face The Nation:

.

Wall Street Wrong Again – Import Prices Decline During Full Year of Import Tariffs…


The latest set of statistics from the Bureau of Economic Analysis (BEA) shows all of the professional pundit claims of higher prices on imported goods due to Trump tariffs are simply disconnected from reality.  In actuality the year-over-year prices of import products are actually dropping:

U.S. Import prices fell 0.3 percent in May, the first monthly decline since a 1.4-percent drop in December. Import prices advanced 1.8 percent from December to April before the downturn in May. The price index for overall imports decreased 1.5 percent over the past 12 months, matching the drop in January. These were the largest over-the-year declines since the index fell 2.2 percent in August 2016. (See table 1.)

The U.S steel and aluminum tariffs have been in effect globally since 2017. Tariffs on softwood lumber (Canada) & durable appliances (S. Korea), same duration.  Additionally the first set of tariffs on China is now well over a year old; and the second set of expanded tariffs on China began a month ago; again, no material impact to the delivered price.

Despite two years of claims by the professional media that tariffs would lead to higher prices for U.S. consumers, as you can see above the reality is quite different.

In part this is driven by lower fuel and energy costs.  Additionally, China is attempting to subsidize its affected industry; and several nations, including China, are attempting to retain export status by adopting monetary policies that devalue their currency.  All of these efforts at countering the U.S. tariffs are having a deflationary impact.

[…] Imports by Locality of Origin: The price index for imports from China edged down 0.1 percent in May following a 0.2-percent drop the previous month. Import prices from China have not recorded a monthly advance since the index rose 0.1 percent in May 2018. Prices for imports from China declined 1.4 percent over the past year, the largest 12-month drop since a 1.6-percent decrease in February 2017.

Import prices from Japan recorded no change in May, after a 0.1-percent decline in April. Prices for imports from Japan also recorded no change from May 2018 to May 2019.

The price index for imports from Canada declined 1.0 percent in May, driven by lower fuel prices. (Link)

President Trump Outwits Chairman Xi Jinping Ahead of G20 Summit…


President Trump has taken the leverage of economics to levels of geopolitical strategy never seen before.  Nowhere is the genius strategy more clear than in the way Trump has positioned the trade reset and confrontation with China.

In hindsight every move since early 2017 including:  (1) the warm welcome of Chairman Xi Jinping to Trump’s Mar-a-Lago estate; (2) the vociferous praise poured upon Xi; (3) the November 2017 tour of Asia; (4) the direct engagement with North Korean Chairman Kim Jong Un; the strategic relationship with Japanese Prime Minister Shinzo Abe; and a host of smaller nuanced moves have been quietly building toward a conclusion.

The upcoming G-20 summit is the last chance for Trump and Xi to reconcile considerable differences and President Trump has the strongest strategic position any Chinese official has ever faced.

After Beijing walked away from previous agreements between USTR Robert Lighthizer and Vice-Premier Liu He, Trump initiated a series of punishing economic consequences that had to have been well planned in advance.

The economy in China is reeling from the pressure applied; and stunningly it has only been a month since the consequence phase began.

In addition to tariff increases, the U.S. blacklisted Huawei Technologies Co., threatened other major Chinese tech companies and essentially cut-off China from the international supply chain it needs to sustain itself.  Beijing responded by drawing up a list of “unreliable entities” and making threats against any enterprise that would walk away from business engagement with China.  The totalitarian response has worsened the situation, and more companies have announced their intent to decouple from Beijing.

An important aspect, missed by most observers, is the ideology and outlook within any Chinese engagement. Quite simply, if it does not benefit China it is not done.  Therefore any negotiation with China is challenging because Beijing will cede no ground they view as already won.

China does not believe in ‘concession from current position‘ within any terms.  Ultimately this is the reason why the negotiated agreement by Lighthizer and Vice-Premier He was dismissed by Beijing and talks collapsed. China will not cede an already attained position.

China never negotiates terms where they give ground.  Almost all negotiation with China has historically surrounded time.  To appease the West the longer-thinking approach of China has been to negotiate winning more slowly, but they will never retreat on previously won gains.

However, in advance of the G20 Summit in Japan President Trump has positioned Chairman Xi in a lose/lose dynamic.  This forces the outlook of Beijing into a state of internal anxiety.  Only President Donald Trump could have achieved this position, is really is remarkable and is noted within this Bloomberg article:

(Bloomberg) By now, Xi Jinping is used to Donald Trump’s tariff threats. But the U.S. president’s latest ultimatum is personal, and the Chinese leader’s response could have far-reaching consequences for his political future.

Trump on Monday said he could impose tariffs “much higher than 25%” on $300 billion in Chinese goods if Xi doesn’t meet him at the upcoming Group of 20 summit in Japan. China’s foreign ministry — which usually refuses to provide details of meetings until the very last minute — declined Tuesday to say whether the meeting would take place.

The brinkmanship puts Xi — China’s strongest leader in decades — in perhaps the toughest spot of his six-year presidency. If Xi caves to Trump’s threats, he risks looking weak at home. If he declines the meeting, he must accept the economic costs that come with Trump possibly extending the trade conflict through the 2020 presidential elections.

“Whether they meet or not, none of the possible scenarios are good for President Xi or the economy in the long run,” said Zhang Jian, an associate professor at Peking University. “You don’t have a good choice which can meet the needs of the Chinese economy or Mr. Xi’s political calculations.”  (read more)

Read that again carefully….

“If Xi caves to Trump’s threats, he risks looking weak at home. If he declines the meeting, he must accept the economic costs that come with Trump possibly extending the trade conflict through the 2020 presidential elections.”

That is what you call a Lose/Lose scenario.

China NEVER faces lose/lose situations.  The Chinese culture doesn’t even have a frame of reference for a position that includes ‘less losing’ amid better options.

For President Trump to have navigated Chairman Xi into such a position is the pinnacle of strategic success. In the long history of western engagement with Beijing it has never happened, ever.

President Trump is now playing with Chairman Xi like a mouse in a maze.

Trump wants to go to the full confrontation position. Donald J Trump has been talking about this for thirty years.  Additionally, for the past two years he has strategically laid the groundwork and aligned the allies needed for this final confrontation.  President Trump is looking for an excuse to apply the scale of tariffs on China that will crush their U.S. export business – and – force them into massive state subsidies to retain their manufacturing model. This approach creates pressure to retract from preexisting global financial obligations.

President Trump has threatened more tariffs and more consequential action as it relates to non-tariff barriers, IP protection, forced technology transfers etc. as a result of China  reneging on their prior agreement.  In essence, President Trump has put Chairman Xi under threat.  Beijing’s traditional and cultural position would be no-meeting and no negotiation while under threats.

However, as a baseline disposition President Trump doesn’t want Xi Jinping to meet with him.  The appearance of a ‘slight’ is the opening Trump can exploit to apply the 25% tariffs to the remaining $350 billion of imported Chinese goods. This will crush his adversary.

So what does President Trump do… while the tariff threat and trade punishment looms (and he keeps reminding everyone of it), he levels massive amounts of praise upon Chairman Xi making the pressure almost unbearable.

Laughably, U.S. President Trump is wearing the panda mask, and simultaneously applying the dragon approach.  Yes, Trump is using China’s own duplicitous strategy against them.

Chairman Xi cannot meet with President Trump or his appearance implies a willingness to negotiate terms; and that reverses the dismissive position previously outlined by Beijing when they rebuked the earlier agreement. A meeting now would appear as weak.

However, if Xi refuses the G20 meeting he will be walking into a trap and allowing President Trump to take all adversarial action that could indeed collapse Xi’s economy.

Worse still, Beijing cannot fall-back-on their historic approach and begin shooting missiles from their proxy province of North Korea to attain leverage and negotiating position… because President Trump has already blunted that ability by meeting with Chairman Kim Jong Un.

Oh, the G20 is going to be epic.

…and LOL, the G20 is on Trump’s home ASEAN turf, Japan, with Trump’s good friend and golf partner Prime Minister Abe.