U.S. Secretary of State Mike Pompeo began the first meeting with North Korean emissary Kim Yong-chol today in New York.  Over the next two days the two leaders are anticipated to discuss terms of North Korean denuclearization and the possibility of a summit in Singapore between President Donald Trump and North Korean Chairman Kim Jong-un.

Pompeo arriving like a boss

Kim Yong-chol, is one of the most influential North Koreans outside of the Kim Jong-un family.  Premier Kim Yong Chol has been closely involved in with talks with South Korea and is the most senior DPRK official to set foot in the US since 2000.

Over the next two days Secretary Pompeo and Premier Kim Yong-chol are anticipated to discuss the granular details of North Korea giving up all nuclear weapons.  There is a great deal of responsibility on the shoulders of Pompeo to ensure clarity of expectations in advance of any further diplomatic meetings.

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Buried in a Wall Street Journal article outlining their shock and horror over President Trump following through with a Phase-I trade penalty of $50 billion, you find the following quote from Captain Obvious at Cornell University:

“The Trump administration is clearly signaling, ahead of Wilbur Ross’s trip to Beijing, that the gloves are off given China’s unwillingness to agree to a trade deficit reduction target or to make broader trade concessions,” said Eswar Prasad, a Cornell University professor of international trade. In addition, the “hardline stance may partly reflect the perception that China played a part in nearly derailing the Trump-Kim summit.” (link)

Gee, ya think?

The White House announced today it will clarify by June 15 a final list of $50 billion in imports from China that would be subject to tariffs of 25%, with the duties implemented “shortly thereafter.”  Additionally, future investment restrictions aimed at preventing Chinese acquisition of American technology will be announced by June 30.

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The 30-day extension on exemptions for Steel and Aluminum tariffs is scheduled to expire June 1st.  President Trump is positioning the U.S. Trade Team for a substantial reset. According to reports, U.S. Trade Representative Robert Lighthizer and Canadian Foreign Minister Chrystina Freeland held a terse meeting today over the tariffs and Canada’s unwillingness to close the NAFTA ‘fatal flaw‘ (loophole).

Both Canada and Mexico have structured key parts of their trade agreements to take advantage of their unique access to the U.S. market.  Mexico and Canada generate billions in economic activity through exploiting the NAFTA loophole.  China, Asia (writ large), and the EU enter into trade agreements with Mexico and Canada as back-doors into the U.S. market.  So long as corporations can avoid U.S. tariffs by going through Canada and Mexico they will continue to exploit this approach.

If the U.S. applies the same tariffs to Canada and Mexico we apply to all trade nations, then the benefit of using Canada and Mexico -by those trade nations- is lost. Corporations will no longer have any advantage, and many are likely to just deal directly with the U.S.  However, this would mean hundreds of billions in lost economic activity for Mexico and Canada.  It is the NAFTA fatal flaw.

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According to Yonhap News North Korea’s vice chairman of the Central Committee, Kim Yong-chol, is traveling to Beijing China for an operational briefing -and likely instructions- prior to heading to the U.S. where he might possibly be scheduled for a meeting with Secretary of State Mike Pompeo.

The travel plans highlight the influence strategy deployed by China and Chairman Xi Jinping ahead of the tenuously scheduled June 12 summit between the U.S. and North Korea in Singapore.  The U.S. negotiation team is currently in South Korea working on summit details amid discussions between all significant stakeholders.

Watch the U.S. -vs- China trade front closely.  U.S. Commerce Secretary Wilbur Ross is scheduled to arrive in Beijing on June 2nd to discuss current trade issues.  China is hoping to manipulate their North Korean proxies as trade leverage. Communist Chinese trade negotiators are notorious for their cunning manipulation.

BEIJING, May 29 (Yonhap) — A senior North Korean official arrived in Beijing on Tuesday apparently en route to the United States to hold preparatory talks over a possible summit between the leaders of the two countries.

The trip by Kim Yong-chol, a vice chairman of the Central Committee of the North’s ruling Workers’ Party, came as Washington and Pyongyang are holding working-level talks on the summit agenda and issues related to security and protocol.

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Two-and-a-half years ago Donald Trump, then a candidate, revealed his super secret strategy for dealing with North Korean nuclear weapons.  When asked “what would you do?”:

•Senator Ted Cruz: Blame Clinton, then load up South Korea and Japan with proactive nuclear weapons.
•Senator Marco Rubio: Blame Obama, then prepare for war via South Korea and Japan.
•Governor John Kasich: Tell Japan to strike the DPRK.
•Governor Jeb Bush: Launch a pre-emptive strike against Kim Jong-un, now.
•Businessman Donald Trump: Punch China in the nose.

Watch:

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Guess which approach worked?

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Interesting dynamics at play.   President Trump has announced via Twitter the U.S. advance team has arrived in North Korea to position for a possible June 12th summit between President Trump and North Korean Chairman Kim Jong-un.

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Yesterday South Korean Prime Minister Moon Jae-in and North Korean Chairman Kim Jong-un held an impromptu summit/meeting in the DPRK to display their unified smiles.

The influence agent, Chinese Chairman Xi Jinping, has been unusually quiet since President Trump asserted that Chairman Xi was the agent provocateur behind Kim Jong-un’s diplomatic bi-polarism.  Apparently, Chairman Xi did not anticipate President Trump being so public with the sunlight; and there’s no way Xi anticipated the economic consequences POTUS Trump outlined in the 232 Auto-Sector review.

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After the sandwich-maker summit the two Korean boys held hands and began skipping in circles around the park while the band played Ode To Joy. So goes the end of the latest chapter in the ongoing komance between Kim Jong-un and Moon Jae-in.

If you don’t believe it, just look at this quote directly from Reuters:

…”Kim said he feels closer to Moon after talking again.”

SEOUL (Reuters) – After a surprise meeting with North Korean leader Kim Jong Un on Saturday, South Korean President Moon Jae-in said he hopes that U.S. President Donald Trump keeps his planned meeting with Kim in June, Seoul-based news agency Yonhap reported Sunday. (link)

Additionally, North Korean leader Kim Jong Un expressed “his fixed will” on a possible June 12 summit with U.S. President Donald Trump in a meeting on Saturday with the president of South Korea, North Korea’s state news agency said. During what it called in-depth discussions, Kim and South Korea’s Moon Jae-in agreed to hold high-level talks between their two nations on June 1, news agency KCNA said.  (more)

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South Korean Prime Minister Moon Jae-in is the Asian version of Barack Obama, and much like North Korean Chairman Kim Jong-un essentially irrelevant in this geopolitical confrontation.  Take a seat, or make a sandwich…. it matters not.

Behind the fanciful Korean ‘denuclearization talks‘ and lofty ‘peace initiatives‘ a far more consequential geopolitical economic battle is taking place between the worlds largest two economies.  U.S. President Donald Trump and Chinese Chairman Xi Jinping are engaged.

The Sandwich Maker Summit –  (Reuters) – “South Korean President Moon Jae-in held a surprise meeting with North Korean leader Kim Jong Un on Saturday in an effort to ensure that a high-stakes summit between Kim and U.S. President Donald Trump takes place successfully, South Korean officials said.

[…]  Their two hours of talks at the Panmunjom border village came a month after they held the first inter-Korean summit in more than a decade at the same venue. At that meeting, they declared they would work toward a nuclear-free Korean peninsula and a formal end to the 1950-53 Korean War.

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Credit to Fox Business for finally admitting the role Xi Jinping played in leveraging North Korean leader Kim Jong-un to become more adversarial to the U.S.- North Korean denuclearization talks and summit in Singapore.  Perhaps this is the first reality shift for Western media to discuss, with greater accuracy and honesty, the extent of influence held by China over the activity of North Korea.  The DPRK is a proxy province of China.

The first U.S. trade delegation visit to China happened May 2-5.  Then there was an unexpected second trip by Chairman Kim to Beijing (May 8-9). Chinese Chairman Xi Jinping instructing Chairman Kim to change his approach publicly in order to provide China with leverage in the next U.S./China trade summit which took place shortly thereafter on May 15-18.  China is leveraging North Korea for a better trade outcome.

As noted by President Donald Trump during his Oval Office remarks with NATO Secretary General Jens Stoltenberg, the specifically scheming and cunning influence by Chairman Xi, what we customarily call ‘Red-Dragon-China‘, was -and is- accepted by President Trump as evidence of Beijing’s manipulative intent.

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Current Steel and Aluminum tariff exemptions expire June 1st.  Secretary Ross scheduled to be in Beijing, China June 2nd, 3rd, 4th.  The G7 Summit in Charlevoix, Quebec is on June 8th and 9th.  The tenuous Singapore summit was previously scheduled for June 12th.

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