Earlier today President Trump sent a warning tweet about Apple possibly incurring tariffs on their products if they continue a plan for manufacturing in China.  Later in the day the president answered direct questions about those possible tariffs.
Additionally, Secretary Wilbur Ross was very insightful when he also spoke of the current U.S. perspective toward the U.S-China trade negotiation.  If you have followed the basic road-map of America-First, there’s a very clear picture; however, most pundits and trade analysts will likely ignore the message.

Subtle as a brick through a window…. yet it’s amazing how many people can’t see it.
Secretary Ross warned the professional investment class that the current objective for Secretary Mnuchin and USTR Lighthizer is to find out if Beijing is willing to re-engage from the starting point where they left-off when talks collapsed.  That’s a big tell.
After several phone calls and staff contacts if the U.S. team doesn’t know the answer to that question, well, there’s almost zero likelihood of any optimistic outlook.  In essence, the only value within the current engagement is financial ‘optics’ to stabilize markets.
It has been clear -validated by the G20 outcome- that President Trump is not going to accept anything less than a full and complete structural change in the U.S. trade position with China.  Lighthizer’s severe compliance and enforcement clauses, specific to each unique trade sector, are non-negotiable.


In the message to Tim Cook (implied tweet and direct oval office commentary) President Trump isn’t warning Tim Apple of the possibility of tariffs, he is specifically telling him to expect them.  Beijing is simultaneously receiving the same message from President Trump along with Secretary Ross’s supportive commentary.
It’s not a matter of “if” tariffs; it is a matter of “when” tariffs.
That said, there’s no duplicity in the U.S. Position.  Mnuchin and Lighthizer are earnestly working in good faith; but President Trump is expecting ‘no deal’.   When President Trump expresses that hardened position, just accept it – and then look around at what else he is positioning to counteract that expectation/result.
President Trump is likely planning for Speaker Pelosi’s political resistance that she will not bring the USMCA up for a ratification vote.  Thus the USMCA trade agreement becomes a 2020 weapon for President Trump against the Democrats.
However, there’s a precursory calendar date to circle. October 21st, 2019.  That’s the Canadian election.  If Justin from Canada loses his re-election, Speaker Pelosi cannot hold out on the USMCA; she’ll have to ratify.
We’ve watched these moves before.
I can almost guarantee the possible 2020 fight over USMCA is why Trump informed his congressional emissaries to tell McConnell and McCarthy to take whatever best deal was possible on the budget/spending, but… considering the more significant scale of the economic consequence of China and USMCA…. get the budget past the 2020 election.
The spending might make us mad, but there’s a bigger picture here.  Trump is clearing the battle space of political weapons for 2020.  It might sound odd, but that’s how he’s worked on the other geopolitical issues.
Trade and tariffs with China + the USMCA + trade and tariffs on the EU + the possibility of an independent U.K trade deal…. all adds up to far more net American economic value, extending for decades, than the insufferable 18 month spending binge by Pelosi et al.
There’s only a very small chance a trade deal with China will be reached.  The reforms within the original Lighthizer and Liu He agreement are antithetical to Beijing; Trump knows this.  Therefore, those tariffs on China are coming; the question is scale and timing.  It’s likely Trump won’t strike against Chairman Xi until the USMCA is ratified.
Additionally, with all of that considered, there’s no motive for a low China tariff targeted to gain leverage toward a deal that would avoid higher tariffs.  No, not on this landscape… the scale of the tariffs against China will be very significant.  Best guess, 25 percent on everything.
Also, call me crazy but I think President Trump is sandbagging with Japan.  I have a hunch that trade deal is already sealed and in the bank; President Trump and PM Abe are just holding back on the announcement.  [Shinzo Abe is to 2020 as Bobby Knight was to 2016]
President Trump is positioning for an economic platform in 2020 with specific deliverables.  None of the 2020 candidates have any economic plans that can touch the scale of U.S. benefit Trump has positioned. Heck, we notice the 2020 candidates generally don’t even talk about trade and economics.

1. The economy.  Economic security. America First.
2. Immigration.  Sovereignty. America First.
3. National Security.  America First.
4. Ensuring intel weaponization never happens again. [Declassification etc.]

That’s the big picture and sequence of priority for Trump’s platform.  President Trump will determine the landscape, and he’s going to position any candidate as adverse to each of those priorities.
The #4 will counter any ‘impeachment’ effort; but it’s not a priority.  It is only valuable as a political tool to counter the #1 objective of Pelosi and the DNC candidate.   His opposition has no counter position for number one through three.  Trump owns that battle-space.
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