Earlier today Commerce Secretary Wilbur Ross appeared for an interview with Maria Bartiromo on the status of phase-one for the U.S-China trade deal, Huawei and ZTE national security concerns, and Speaker Pelosi blocking ratification of the USMCA agreement.
Secretary Ross cautions the Chinese deal is contingent on some very particular and important enforcement details. Additionally Ross discusses the potential national security issues with 5G network and AG Bill Barr having strong concerns about Huawei and ZTE.
A very strong jobs market, and wage growth for the middle-class at the highest rate in decades, continues to benefit Main Street USA. As noted within the sales and earnings report from Walmart today, the U.S. middle-class continues to thrive in a MAGA-driven U.S. economy.
(Reuters) […] Consumer spending going in to the crucial holiday season remains healthy, Chief Financial Officer Brett Biggs told Reuters in an interview on Thursday. Retailers earn a sizeable chunk of their annual revenue during November and December.
“The consumer remains in pretty good shape, employment situation is good, fuel prices are low … wage growth is pretty good,” he said. (more)
It is easy to forget how two-years-ago the doomsayers and financial pundits were claiming President Trump’s tariff policies were going to create massive price increases. They were completely wrong in their predictions. The latest U.S. inflation reports show low inflation at 1.8 percent year-over-year. (more…)
Funny stuff amid headlines discussing the likelihood of President Trump postponing a 25% tariff on European autos. What the pundits are missing is how President Trump has positioned a myriad of trade dynamics that make EU action unavoidable. This is the fun stuff, so let’s enjoy the details.
The current headlines surround President Trump “postponing” a 25% tariff on EU automobiles as an outcome of the major EU manufacturers (mostly Germany) promising increased investment in their U.S. operations. By itself this would be considered a win for President Trump, but that’s not the whole picture, not even close.
What the more broad trade and manufacturing dynamic includes will explain what EU economists are only just now starting to realize. Yes, the major European auto-makers will put more investment into the United States (thereby lessening the EU industrial economy); however, the auto decision is not because they are presenting a magnanimous benefit of sorts, but rather it is a foregone conclusion; an unavoidable reality due to a previous trade agreement construct.
Within the USMCA agreement President Trump negotiated a win-win-win for Mexico, Canada and the U.S. through a requirement that 75 percent of North American auto content must originate from manufacturing within North America. Failure to reach that threshold means the auto company will be subject to a 25 percent tariff to bring the product to the U.S. market. (more…)
The major industrial economies of the European Union (U.K., France, Germany) have been the beneficiaries of a decades-long system which allowed one-sided benefits -via tariffs- against U.S. products.
With President Trump demanding reciprocity, and with less industrial purchasing from China, the EU is now starting to contemplate a dramatically different economic future.
(Reuters) – Persistent weakness in euro zone manufacturing raises the risk of other sectors of the economy being infected, extending the currency bloc’s recent downturn, European Central Bank policymaker Yves Mersch said on Monday.
“The longer the weakness in manufacturing persists, the greater the risk that other sectors of the economy will be affected by the slowdown as well,” Mersch told a conference.
“Risks to the growth outlook remain on the downside overall.” (read more)
I think it is safe to say the majority of American voters have no idea how deeply the global economy is dependent on systems of trade that are based on the U.S. trade deficits. (more…)
President Trump held an impromptu presser prior to departing JBA for Alabama. This is one of those mini-pressers that reveals important aspects to the *direction* of the U.S-China trade discussion from the POTUS perspective. The financial pundits always miss these little tell-tale remarks. President Trump is managing the trade and economic program at a granular level; this is his priority… every little part of it, he is directing.
President Trump notes the value of the tariff strategy, and infers (not so subtle) that no deal is preferred within his ongoing plan: “you’ll see what I’m going to be doing.” This is what the financial pundits ignore. President Trump has gamed this out, he’s stringing the process slowly to keep boosting the stock market…. but his goal does not include a deal.
[Video and Transcript below]
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[Transcript] – THE PRESIDENT: I look forward to seeing a lot of things. But on Monday, in particular, our stock market has just broken another record, as you see. Our economy is doing phenomenally well. Our jobs numbers just broke yet another record. They’re higher than ever before. Our country is doing better than it’s ever done. Our military is rebuilt. It was a mess when I took over.
And a lot of good things are happening, and now I’m going to watch Alabama-LSU, and that’ll be a lot of fun. So, we look forward to it.
As we warned yesterday, about taking the propaganda of the Beijing panda mask…
Well, today President Trump pummels that narrative when he was asked about it during an impromptu press conference at the White House:
Q On China, can you tell me whether a tariff rollback will be part of the phase-one China deal?
THE PRESIDENT: Well, they’d like to have a rollback. I haven’t agreed to anything. China would like to get somewhat of a rollback — not a complete rollback, because they know I won’t do it.
But we’re getting along very well with China. They want to make a deal. Frankly, they want to make a deal a lot more than I do. I’m very happy right now. We’re taking in billions of dollars. I’m very happy. China would like to make a deal much more than I would. (link)
The International Monetary Fund (IMF) has a statement out today that underlines why so many global forces are against President Trump: “there are trillions at stake”.
(Reuters) – An interim U.S.-China trade deal that rolls back some tariffs has the potential to improve the International Monetary Fund’s baseline economic forecasts, which show the two countries’ trade war slowing global growth significantly this year, an IMF spokesman said on Thursday. (read more)
The baseline for the position of the IMF is the open secret amid global economic that few will ever discuss openly. The U.S. economy generates approximately $21 trillion in total activity; roughly 20 percent of total global economic activity.
When the U.S. maintains a $500 billion per year trade deficit with China, essentially we are sending China trade dollars Beijing then uses to purchase industrial products from the EU an other nations. Any reduction in the U.S-China deficit means China has less dollars to distribute; as an outcome the global economies have access to less U.S. wealth.
The process to retain U.S. dollars inside our own economy, President Trump’s “America First” economic agenda, is the heart of what most call the global economic slowdown. As a result the position of the IMF is better when the U.S. maintains a deficit, and the position of the IMF is weakened by any process that stops that exfiltration of wealth. (more…)
There is a lot of banter amid the punditry class of trade and finance watchers surrounding a statement from Chinese Commerce spokesman Gao Feng claiming that U.S. and China negotiators were discussing a ‘phased’ roll-back of U.S. tariffs as part of a trade deal. However, a note of very strong caution should be applied.
On its face the Beijing-central claim is essentially an accurate portrayal of a dynamic long discussed. The tariffs were initially imposed to reset the outlook of China. In any negotiation with China a concession of current status is a non-starter. By natural disposition Beijing refuses to cede already won ground. This is their historic approach.
Therefore when engaging in any negotiations with China it is necessary to reset the baseline. China has to naturally feel losses; the economic landscape must be changed around them without their participation; in order for for them to consider negotiation.
The punishing U.S. tariffs accomplished this objective; the Beijing baseline status has been changed. The bamboo forest is significantly less than it was two years ago, and now China wants to recapture lost position. Their current status indicates exactly that dynamic. (more…)
Steve Bannon appears on Fox News to discuss the ongoing impeachment issues with Maria Bartiromo. Within the discussion Bannon highlights the larger position about how Trump’ America-First foreign policy is antithetical to the one-way interventionist model that ultimately provides U.S. politicians with a process to sell their office to the benefit of foreign governments. The Biden-Ukraine issue is a direct example of that process.
Everything about POTUS Trump’s policy is against the business model that allows DC politicians to trade U.S. foreign policy for their own financial benefit. Trillions at stake.
Bannon correctly points out that only public pressure is going to force change upon the swamp. President Trump is a vessel for a process to stop DC corruption; but the DC politicians themselves will never vote to diminish their own interests. That’s the issue with the republicans in the Senate during an impeachment trial.
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On the Democrat race I agree with Bannon on 90% of his presentation, except I would replace “centrist” with Wall St (multinationals) and Hollywood. The Dem party is fueled by multinational interests and Hollywood support that is aligned with China and multinationals et al. With Biden falling they are trying Buttigieg; if that doesn’t work, they’ll need someone to hold/protect their interests. (more…)
National Economic Council Chairman Larry Kudlow appears on Fox Business to discuss the latest excellent jobs report and the overall strength of the U.S. economy.
Additional points of interest discussed are the U.S-China trade negotiations, the status of the internal Beijing communist control over their economy and the ongoing issues with the EU. Lots of good MAGAnomic news.
