Chairman Xi Jinping arrives in North Korea to support the “correct thinking” within his proxy province and hostage Kim Jong-Un.   Magnanimous Panda, and defender of all enlightened Asian progress, exhibited great smiles as nervous Kim worries over the dust on the military shoestrings.  WATCH:

(Reuters) BEIJING (Reuters) – The world hopes North Korea and the United States can talk to each other and for those talks to be successful, Chinese President Xi Jinping told North Korean leader Kim Jong Un on Thursday, praising Pyongyang’s efforts toward denuclearization.

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The construct of the USMCA was always anticipated to sail through ratification in Mexico because, well, quite frankly, the USMCA is specifically structured to provide great benefit toward Mexico. It’s not because the language within the USMCA favors Mexico, but rather the rules are centered around deregulating industry, and lifting wages.
The rules-of-origin, in combination with mandated minimum wage rates attached to the manufacturing sector; and the fact that Mexico has the lowest current wage rates in North American; specifically means that Mexican workers stand to get the biggest financial benefits… and that’s ok.  Trump, Lighthizer and Ross designed it that way.

The U.S. benefits when the Mexican wage rates are raised.  Heck, there was a time in the early negotiations, after Canada was kicked out of the room, when Secretary Wilbur Ross was advocating for an $11/hr minimum wage in Mexico, and the Mexicans were like ‘whoa, wait a minute, too high, too high’… [It was quite funny, because Trump was being called racist simultaneous to him trying to give a $85/day pay raise to Mexicans (from $3/day)].

MEXICO CITY (Reuters) – Mexico on Wednesday became the first country to ratify the United States-Mexico-Canada Agreement (USMCA) agreed late last year to replace the North American Free Trade Agreement (NAFTA) at the behest of U.S. President Donald Trump.

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This is interesting… but not simply because of the surface visibility.  Yesterday there was an event in Charlotte, North Carolina, that brought together Apple CEO Tim Cook, Commerce Secretary Wilbur Ross, U.S. Workforce policy advocate Ivanka Trump and U.S. CoC President Tom Donohue (on the margin).

Today, Apple Inc announces a restructuring of their supply chain away from China. In the media report notice the nations that likely stand to gain, and reference Trump’s 2017 golden ticket tour of Asia.

(Reuters) – Apple Inc has asked its major suppliers to assess the cost implications of moving 15%-30% of their production capacity from China to Southeast Asia as it prepares for a restructuring of its supply chain, according to a Nikkei Asian Review report on Wednesday.
Apple’s request was a result of the extended Sino-U.S. trade dispute, but a trade resolution will not lead to a change in the company’s decision, Nikkei said s.nikkei.com/31zCGhw, citing multiple sources.

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As we noted on Day #1, if we watch how Beijing scripts the messaging we should be able to identify if Chairman Xi Jinping is taking the dragon approach toward his captive Kim Jong Un, or if Xi would instead reshape the geopolitics by announcing his release of Kim as a hostage: The magnanimous panda approach.  [Critical Background HERE and HERE]
It looks like we have an answer today as Chairman Xi writes a personal op-ed, published on the front page of North Korea’s state newspaper, where Xi is releasing Kim from proxy province captivity:

…”China supports North Korea’s “correct direction” in politically resolving issues on the Korean Peninsula.”…

Yes, though important details are yet to follow, it appears Beijing is acquiescing to the unrelenting pressure from hostage rescuer President Donald Trump and allowing the DPRK to exit the controlled captivity of China. Likely denuclearization will commence.

SEOUL (Reuters) – Chinese President Xi Jinping said in an op-ed in North Korean state newspaper Rodong Sinmun on Wednesday that China supports North Korea’s “correct direction” in politically resolving issues on the Korean Peninsula.
The front-page op-ed is an honor rarely granted to foreign leaders and comes a day before Xi is set to visit Pyongyang on Thursday and Friday at the invitation of North Korean leader Kim Jong Un, making him the first Chinese leader to visit in 14 years.

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This is a good development.  I strongly appreciate a U.S. President who believes in the intelligence of the U.S. voter to understand what is taking place.
President Trump is not selling the U.S. electorate short on their ability to understand the financial dynamic of ‘globalists -vs- nationalists’. President Trump is calling attention to currency manipulation by China and the EU. [Tweet]

In the big picture, what these global economies are doing is trying to offset President Trump’s ‘America First’ policy.  There are trillions at stake, and when you stand back and evaluate the scale of economic cost in this process you begin to recognize the severity of ideology and history of controlled financial manipulation.
By lowering the value of their currency, China and the EU are attempting to block the impact of tariffs against their export position.  Lowering the price of Chinese Yuan (Renminbi) or Euro (€) makes their exports cheaper to a stronger U.S. dollar.  This is what has been happening for the past six months. There are trillions at stake.
Despite what the Wall Street financial pundits have been saying, we have been importing their manufactured deflation for six months. U.S. consumers are not paying the tariffs on imported goods.  The devaluation of currency is why costs of import goods are actually less year-over-year (dollar strong). This is a strategy on their part to counter Trump, tariffs, etc. The globalist economies are trying to wait out Trump 2020.  We see the evidence of this in the CPI import prices:
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National Economic Council Chairman Larry Kudlow appears on Fox News immediately following the announcement that President Trump and Chairman Xi will have an “extended meeting” at the G20.

President Trump tweeted about a phone call this morning with Chinese Chairman Xi Jinping. There will be a G20 meeting between Trump and Xi. So, extending our conversation from yesterday…. the “magnanimous panda” approach appears confirmed.

[White House] President Donald J. Trump spoke with President Xi Jinping of China this morning. The two leaders discussed the importance of leveling the playing field for U.S. farmers, workers, and businesses through a fair and reciprocal economic relationship. This includes addressing structural barriers to trade with China and achieving meaningful reforms that are enforceable and verifiable. The leaders also discussed regional security issues. The two Presidents look forward to meeting again in Osaka, Japan at the G20 Summit. (read more)

With Chairman Xi Jinping traveling to North Korea for talks with his captive Kim Jong Un prior to the G20; and with the meeting between Xi and Trump confirmed; it certainly looks like Beijing is deflecting the weakness of their economic/trade position by shifting the optic toward a geopolitical magnanimous panda.  The scale of the uprising in Hong Kong was also a likely influence on the margins.
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Author of ‘The Coming Collapse of China’, Gordon Chang, appears on Fox Business to discuss the mounting U.S. trade tensions with China, the fallout from the protests against Carrie Lam in Hong Kong, and the announced visit by Xi to North Korea.
Chang also sees the visit by China’s Chairman Xi Jinping to North Korea as a strategic and purposeful moment for Beijing; an attempt to find footing against the overwhelming economic punishment being delivered by U.S. President Donald Trump.

Well, well, well….  Against the backdrop of everything we have been discussing about the nature of the U.S. – China – North Korea geopolitics; and considering the current position of all the players; THIS is a very interesting development:

BEIJING (Reuters) – Chinese President Xi Jinping will visit North Korea for two days from Thursday, state media in both countries reported on Monday, making him the first Chinese leader to visit in 14 years.
Neighboring China is reclusive North Korea’s only major ally, and the visit comes amid renewed tensions between the United States and North Korea over efforts to persuade Pyongyang to give up its nuclear weapons.

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Bloomberg has an interesting article citing an internal discussion within Chinese technology company Huawei as they estimate the financial impact to the U.S. blacklist position.

Do the math… Huawei estimates an international drop of between 40 million to 60 million units at an average retail cost of $500 per unit. That is a stunning financial forecast for a drop in sales.

(Via Bloomberg) Huawei Technologies Co. is preparing for a 40% to 60% drop in international smartphone shipments as the Trump administration’s blacklisting hammers one of the Chinese tech giant’s most important businesses.
China’s largest technology company is crunching internal estimates and exploring options including pulling the latest model of its marquee overseas label, the Honor 20, people familiar with the matter say.
The device begins selling in parts of Europe June 21 including France and the U.K., but executives are monitoring the launch and may cut off shipments if it sells poorly as expected, they said, asking not to be identified discussing internal matters. Already, two of France’s largest carriers aren’t bothering with the Honor at all, two people familiar with the matter said.

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