Ok, this one strategic maneuver has just pegged my too-much-winning needle on max overdrive. Donald Trump took a congratulatory phone call from the President of Taiwan, and now the Chinese will be apoplectic.
Those of you who have been with us for a while, will note our arguments against China’s MFN (Most Favored Nation) trade status have continually fallen on deaf ears within DC.  Why?  Because they are political ears paid to remain necessarily deaf, while various Chinese national interests have taken influence over our legislative priorities on trade and commerce.
taiwan-3
In short, we’ve been ripped off.  Bigly.  For decades.
Rule #1 in any trade deal is to fully understand who is the customer within the equation.  The U.S. market is the biggest trade customer on this entire beautiful blue planet.  We hold all the leverage.  Access, or denial of access, to this market is the leverage
https://twitter.com/realDonaldTrump/status/804848711599882240

[…]  “President-elect Trump spoke with President Tsai Ing-wen of Taiwan, who offered her congratulations,” according to a readout of the call released by Trump’s transition team.

“During the discussion, they noted the close economic, political, and security ties” between Taiwan and the United States, the statement continued. “President-elect Trump also congratulated President Tsai on becoming President of Taiwan earlier this year.”

The call, first reported by the Financial Times, is the first time a US president has directly spoken with Taiwan’s leadership in more than 30 years. The White House was not made aware of the call until after it occurred, according to The New York Times.  (link)

Immediately, the pearl-clutching media and professional political class went nuts because the U.S. is not supposed to do anything that might upset China.   For over 30 years the issues between China and the breakaway free and democratic Taiwan have been tenuous.
According to diplomatic norms the U.S. is not supposed to acknowledge Taiwan out of fear we upset the Chinese under the auspices of the “one china” policy.

[…] “This could be damaging,” said Barry Pavel, director of the Brent Scowcroft Center on International Security at the Atlantic Council. “We’ll see the Chinese reaction in several hours. I don’t expect it to be pretty.”

The danger, Pavel said, is that “the Chinese are going to think it was deliberate and that this is the beginning of a hostile policy by the Trump administration, upending the basic geometry of diplomatic relations between the US and China since 1979.”  (read more)

Trump’s former campaign manager, Kellyanne Conway, later told CNN’s Anderson Cooper she wouldn’t go beyond the call readout from the transition team statement, but the President-elect was fully aware of the call’s implications.  Brilliant.
This is exactly what we predicted a Trump presidency would do.  Use economics instead of rockets and military to leverage a better position for America in the globe.
We talked about this in February of 2016 – […]  China holds immense leverage over North Korea; leverage of a similar comparative scope the U.S. holds over Puerto Rico.  North Korea is financially dependent on China for its very survival.  If China pulls back money from North Korea, N-Korea collapses upon itself.
Rather than go to war or engage the U.S. military in strikes against Korean military facilities, Donald Trump identifies economic leverage as the solution.
The United States have a $17+ trillion dollar market that China is dependent upon.  Candidate Trump says use the principle trade leverage within “most favored nation status” as a bargaining tool to get N-Korea to stop military provocations and expansions.
The economic status of “most favored nation” is a golden ticket to the U.S. market:

In international economic relations and international politics, “most favoured nation” (MFN) is a status or level of treatment accorded by one state to another in international trade.
The term means the country which is the recipient of this treatment must, nominally, receive equal trade advantages as the “most favoured nation” by the country granting such treatment. (Trade advantages include low tariffs or high import quotas.) In effect, a country that has been accorded MFN status may not be treated less advantageously than any other country with MFN status by the promising country.

If China ever lost their golden ticket entry into the U.S. economic market it would cost them hundreds of billions almost immediately – their tenuous economic model collapses without customers.  China lobbies congress with tens of millions to keep their golden ticket in hand.
This is another excellent example of the benefit for a Trump presidency.  Because Trump is not beholden to their financial lobbying efforts, he can make decisions that entirely in the U.S. larger global best interests.   In doing so the direct downstream consequences are as wide ranging as keeping North Korea from military expansion. (more)
https://twitter.com/realDonaldTrump/status/804863098138005504
 
US President Barack Obama (R) listens to

Share