China, via Beijing’s communist old guard, has played right into the hands of the Trump administration by overreacting to the economic pressure of President Trump. Beijing authorized an atomic elbow via another provocative North Korean missile test. However, their response now empowers the Trump administration to point out the terrible DPRK behavior and simultaneously take a higher diplomatic road.
President Trump, Secretary Tillerson and Secretary Mattis’s “Fire and Fury” approach was essentially a dynamic Win/Win. By utilizing diplomacy (Tillerson/Haley) while constructing the appearance of military possibility (Mattis/McMaster), while simultaneously President Trump put the BIG geopolitical economic squeeze on China, team U.S.A. created a multidimensional box – and Beijing walked directly into the trap.
Unintentionally, China has now created a diplomatic ‘high-road’ path in response to the DPRK for the Trump administration. China, seeking to retain position behind the curtain of the DPRK, will not be able to oppose, publicly or in the U.N., any U.S. and allied position now or they run the risk of the entire world seeing their controls over Kim Jong-un. Notice the strategy in the well coordinated approach today:
President Trump Speaks To PM Shinzo Abe – President Donald J. Trump spoke yesterday with Prime Minister Shinzo Abe of Japan to address North Korea’s launch of a missile that overflew Japanese territory. The two leaders agreed that North Korea poses a grave and growing direct threat to the United States, Japan, and the Republic of Korea, as well as to countries around the world. President Trump and Prime Minister Abe committed to increasing pressure on North Korea, and doing their utmost to convince the international community to do the same. (LINK)
WHITE HOUSE STATEMENT – The world has received North Korea’s latest message loud and clear: this regime has signaled its contempt for its neighbors, for all members of the United Nations, and for minimum standards of acceptable international behavior.
Threatening and destabilizing actions only increase the North Korean regime’s isolation in the region and among all nations of the world. All options are on the table. (LINK)
Secretary Rex Tillerson Statement – Secretary Tillerson spoke on separate calls with Japanese Foreign Minister Taro Kono and Republic of Korea (R.O.K.) Foreign Minister Kang Kyung-wha to discuss North Korea’s launch of a missile that overflew Japan.
They agreed the launch was an escalation of North Korean provocations and showcased the dangerous threat posed by North Korea to the United States, Japan, the R.O.K., and countries around the world.
Secretary Tillerson reaffirmed with Ministers Kono and Kang the strength of our alliances with Japan and the R.O.K., as well as the ironclad commitment of the United States to their defense.
Secretary Tillerson agreed with the two ministers to continue close coordination on efforts to increase pressure on North Korea to show the regime that its repeated violations of UN Security Council resolutions will only result in condemnation and isolation from the international community. (LINK)
U.N. Ambassador Nikki Haley locks the trap with a statement of how China and Russia will now have to stand on their prior commitment to the U.N. Security Council:
China’s objective is conquest. China’s tool for conquest is economics. President Trump’s entire geopolitical strategy, using economics in a similar way, is an existential threat to China’s endeavor. Communist Beijing calls the proverbial DPRK shots.
President Trump is putting on a MASSIVE economic squeeze.
♦Squeeze #1. Trump and Mnuchin just sanctioned Venezuela and cut off their access to expanded state owned oil revenue. Venezuela now needs more money. China and Russia are already leveraged to the gills in Venezuela and hold 49% of Citgo as collateral for loans outstanding. Now China and Russia will need to loan more, directly.
♦Squeeze #2. China’s geopolitical ally, Russia, is already squeezed with losses in energy revenue because of President Trump’s approach toward oil, LNG and coal. Trump, through allies including Saudi Arabia, EU, France (North Africa energy), and domestic production has driven down energy prices. Meanwhile Russia is bleeding out financially in Syria. Iran is the financial reserve, but they too are energy price dependent.
♦Squeeze #3. Trump and Tillerson just put Pakistan on notice they need to get involved in bringing their enabled tribal “extremists” (Taliban) to the table in Afghanistan. Pakistan’s primary investor and economic partner is China. If U.S. pulls or reduces financial support to pressure Pakistan toward a political solution in Afghanistan, China has to fill void.
♦Squeeze #4. China’s primary economic threat (competition) is next door in India. President Trump has just embraced India as leverage over China in trade and pledged ongoing favorable trade deals. The play is MFN (Most Favored Nation) trade status might flip from China to India. That’s a big play.
♦Squeeze #5. President Trump has launched a USTR Section 301 Trade Investigation into China’s theft of intellectual property. This encompasses every U.S. entity that does manufacturing business with China, particularly aeronautics and technology, and also reaches into the financial services sector.
♦Squeeze #6. President Trump, Secretary Ross, Secretary Mnuchin and USTR Robert Lighthizer are renegotiating NAFTA. One of the primary objectives of team U.S.A. is to close the 3rd party loopholes, including dumping and origination, that China uses to gain backdoor access to the U.S. market and avoid trade/tariff restrictions. [China sends parts to Mexico and Canada for assembly and then back-door entry into the U.S. via NAFTA.]
♦Squeeze #7. President Trump has been open, visible and vocal about his intention to shift to bilateral trade renegotiation with China and Southeast Asia immediately after Team U.S.A. conclude with NAFTA renegotiation.
♦Squeeze #8. President Trump has positioned ASEAN (Association of Southeast Asian Nations) as trade benefactors for assistance with North Korea. The relationship between ASEAN nations and the Trump administration is very strong, and getting stronger. Which leads to…
♦Squeeze #9. President Trump has formed an economic and national security alliance with Shinzo Abe of Japan. It is not accidental that North Korea’s Kim Jong-un fired his missile over the Northern part of Japan. Quite simply, Beijing told him to.
Add all of this up and you can see the cumulative impact of President Trump’s geopolitical economic strategy toward China. The best part of all of it – is the likelihood China never saw it, meaning the sum totality of “all of it”, coming.