If there was a five-click dial available as a severity meter between the U.S. and China, something happened internally in Beijing, over the last 72 hours, because that dial just triggered movement from 3 to 4… Keep watching everything in the world of geopolitics with a mental 360° radar sweep looking for Chinese influence/interests.

Nuance and subtlety is everything in China. Culturally harsh tones are seen as a sign of weakness and considered intensely impolite in public displays between officials; especially within approved and released statements by officials representing the government.
Therefore, when we see China publicly use strong language – it indicates a level of internal disposition beyond the defined western angst. Big Panda becomes Red Dragon; there is no mid-status or evolutionary phase.

SHANGHAI (Reuters) – China’s state media on Monday lashed out at the policies of U.S. President Donald Trump in an usually direct attack, accusing him of “starring in his own carefully orchestrated street fighter-style deceitful drama”.
Trump’s wish for others to play along with his drama is “wishful thinking,” the ruling Communist Party’s People’s Daily newspaper said in an editorial.

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President Trump has moved into Phase II of the U.S./China confrontation.  Part of that confrontation is to use the inherent weakness of the Chinese economy against them.  To understand the weakness is to understand the China ‘One-Belt / ‘One-World‘ economic trade strategy.  Here’s an outline of the economic battle-space we are witnessing.
People often talk about the ‘strength’ of China’s economic model; and indeed within a specific part of their economy –manufacturing– they do have economic strength.
However, the underlying critical architecture of the Chinese economic model is structurally flawed and President Trump with his current economic team understand the weakness better than all international adversaries.
Lets take a stroll and discuss.
China is a central planning economy. Meaning it never was an outcropping of natural economic conditions. China was/is controlled as a communist style central-planning government; As such, it is important to reference the basic structural reality that China’s economy was created from the top down.
This construct of government creation is a key big picture distinction that sets the backdrop to understand how weak the economy really is.
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Apparently our CTH suspicions were correct; this is interesting.  Canadian Foreign Minister Chrystia Freeland is scheduled to leave Canada on Tuesday for a meeting of ASEAN foreign ministers in Singapore…. Meanwhile U.S. Trade Representative Robert Lighthizer and a high-level Mexican team -consisting of both incoming AMLO and exiting Nieto delegations- will be meeting again to determine the details of a bilateral trade deal.

Mexican Economy Minister Ildefonso Guajardo is from the outgoing Pena Nieto administration and was part of the crew supporting the Canadian position; ie. the plan to continue exploiting the NAFTA loophole.  However, Mexican president-elect Andres Manuel Lopez Obrador (AMLO) has selected Jesus Seade as his lead person for trade negotiations and appears more willing to engage in a bilateral trade deal with the U.S.
AMLO’s Jesus Seade, Minister Ildefonso Guajardo and Ambassador Robert Lighthizer are meeting again this Thursday to put the outline of a deal together; while Canada is sidelined from the discussion.
Flavio Volpe, president of the Automotive Parts Manufacturers’ Association in Canada, said: “I wouldn’t be surprised if the Americans and the Mexicans came to some resolution on that piece (autos) and then the Americans flip it back to Canada and say ‘Take it or leave it’.”  That is exactly what CTH anticipated was going to happen.
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White House national security adviser John Bolton appears on Face The Nation with Margaret Brennan to discuss North Korea and Russia.  Within the interview Bolton says the U.S. could dismantle North Korea’s nuclear and ballistic missile programs within a year if the North Koreans committed to scrapping their arsenal in accordance with the agreement reached in Singapore last month.

Today Canada released an updated list of retaliatory tariffs designed as countermeasures to the U.S. Steel and Aluminum tariffs [SEE HERE] which will begin Sunday, July 1st.
Additionally, Foreign Minister Chrystia Freeland, Innovation Minister Navdeep Bains, and Employment and Labour Minister Patty Hajdu, announced they would initiate an emergency program to use Canadian taxes compensate workers, expand unemployment benefits, and subsidize impacted industry.  Yes, in a transparent display of political ideology (throwing capitalism directly out the window), Canada doubles-down on centralized government subsidies to offset market impacts.   Brilliant ‘eh!

Chrystia Freeland made the announcement on the floor of a Hamilton steel factory Friday. In a rare backdrop, Ms. Freeland actually entered a factory with machines and things, to deliver the carefully choreographed political message (video below – watch the last minute to understand).
Team U.S.A. have applied tariffs to Canadian softwood lumber, Steel and Aluminum as Canada refuses to negotiate new terms for NAFTA where North American products are prioritized.  Canada demands the ability to continue importing Asian, mostly Chinese, products for their assembly-based market.
With the latest counter-move by Justin and Chrystia from Canada, it is increasingly likely President Trump will levy a 20% tariff on imported Canadian automobiles.  Last month (May) the Canadian economy dropped over 31,000 Full-Time jobs.
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There is an article from Bloomberg which finally concedes the obvious economic and trade dynamic within a U.S. -vs- China confrontation.  The media paradigm shift is based on new statements from Chinese Ministers admitting they cannot win a trade confrontation with U.S. President Trump.
The summary reason is simple, we have discussed it frequently:
China is a production-based economic model, they do not have the ability, or wealth, to consume their own durable goods production; they rely on exports.
The U.S. is a more balanced economy; we consume 80% of our own production.  We are self-sustaining, China is not.
Without a market to sell their products, the Chinese economy cannot survive.
Conversely, China has focused so intensely on durable-goods manufacturing, their consumable goods market (food) is dependent; they cannot feed themselves.  The U.S. can survive without exporting food, China cannot survive without importing food.  The U.S. economy can survive without importing durable goods; the Chinese economy cannot survive without exporting durable goods.  This is the unavoidable trade reality.  As a consequence President Trump has all the factual leverage.
In stunning, and carefully worded economic writings, Chinese academics and economic ministers are now talking about the inherent weakness of the Red Dragon policies:
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Canada’s Foreign Affairs Minister Chrystia Freeland, the primary NAFTA negotiator, went to Washington DC today for a highly political ‘in-camera’ session with the U.S. Senate Committee on Foreign Relations. [Press briefing video at bottom]

The Chairman of the Foreign Relations Committee is Bob Corker, one of the largest recipients of corporate Wall Street lobbyist money in the senate.  Corker is the most staunch voice in opposition to President Trump’s trade reset policy.  The ranking democrat is Bob Menendez.  Together Corker and Menendez represent two of the most corrupt representatives in congress.  These are the allies Chrystia Freeland is counting on.

Freeland’s strategy, on behalf of Prime Minister Justin from Canada, is to leverage internal U.S. political opposition against President Trump’s NAFTA trade reset.  However, while Canada and Mexico fight against any new trade agreement that eliminates their economic exploitation model, the Canadian economy is already beginning to contract; and this is happening even before any substantive U.S. trade policies are in place:

(Via CBC) The economy lost 7,500 jobs in May as a drop in full-time employment was only partially offset by an increase in part-time jobs, Statistics Canada said Friday.

The overall drop in the number of jobs came as full-time jobs fell by 31,000, offset in part by a gain of 23,600 part-time positions.

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One of the greatest gifts President Trump provides through his policy discussion(s) is an awakening to how much U.S. voter perspective has been driven by constructed fallacy.

This is especially true in the discussion of domestic economic policy.  There are trillions of dollars at stake; and the stakeholders are growing increasingly angry as President Trump places a spotlight on decades of economic fraud and abuse.

Prior to the 2016 election few people understood that DC politicians don’t actually write legislation, lobbyists do.  Politicians don’t write laws, their role is to sell legislation created by lobbyist groups.  That is the modern legislative model; that’s how it really works.  Unfortunately the same bastardized and manipulated process has happened around trade deals and trade agreements.

In modern trade agreements, before the election of President Donald Trump, corporations would write the actual language within the deal.  Corporate lobby groups like the U.S. Chamber of Commerce, have fully functioning staff that do nothing except write the trade agreement language.

If a multinational corporation wanted to increase its value, it simply needed to pay the indulgency fee to the U.S. CoC and the massive lobbying group would create language inside the agreement to assist their interest.   Note the corporation didn’t need to be U.S. centric, currency is multinational.  The U.S. CoC then pays politicians, both democrats and Republicans, via campaign contributions for the trade controls.  People can debate the nuance and intersections of governmental bureaucracy within the process; however, peel all the skin from the onion and this is how it really was working.

Then came President Trump.

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President Trump affirms the U.S. position to use targeted tariffs to assert reciprocity as the trade standard.  Free and fair trade is the goal via removing tariffs and non trade barriers:

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Earlier today President Trump and members of the administration delivered remarks following the G7 Summit in Charlevoix, Canada.  President Trump is heading to Singapore for a historic meeting with North Korean Chairman Kim Jong-un.

Prior to departing Canada, President Trump took questions from the media on a wide variety of issues including trade:  “Economic Security is National Security” !

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