Sometimes we just read and think; sometimes we just read and laugh. This is the latter.
China continually looks at President Trump and the U.S. trade position through the wrong prism. Those around Chairman Xi genuinely seem to be incapable of understanding a U.S. President who independently represents long-term U.S. larger interests, and simultaneously leverages the U.S. market as a customer in a one-sided transaction.
The disconnect in Beijing analysis of the dynamic is really quite something.

After last weeks strategic magnanimous panda maneuver, Beijing was shocked, shocked, that President Trump continued to maintain “wrong thinking” toward the upcoming discussion with Chairman Xi.
It appears China fully expected some reciprocal trade bargaining based on their implied promise to release North Korean Chairman Kim Jong-un from manipulation; but Trump didn’t flinch.  Instead, of acquiescence to magnanimous panda, President Trump sends Chairman Kim a letter filled with “excellent content“. Beijing was snubbed.
So yesterday as a follow-up Beijing indicates a willingness to revisit the prior agreement by putting the face of Vice-Premier Liu He back into their negotiation position:
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Oh dear, China is unhappy.  According to the Global Times President Trump is not “showing enough good faith” to demonstrate he “wishes to ease the trade tensions” with magnanimous panda. Sincerity is not being observed.
The G20 is coming up next week.  Magnanimous panda has exhibited great gesture with North Korea.  Expectations of reciprocal acquiescence abound, and yet President Trump is maintaining wrong thinking toward trade conflicts with China.
Beijing is not pleased; not pleased at all:

Global Times – Ahead of President Xi Jinping’s trip to attend the G20 summit, which takes place from Thursday to Saturday, the US is not showing enough good faith to demonstrate that it wishes to ease the trade tensions, Chinese observers said.
G20 members should unite to oppose protectionism and unilateralism at the summit, and be realistic about the prospects that the two largest global economies will reach a deal in the near future, they said.

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And now…. for something completely different.
Considering the recent back-and-forth hostage negotiations between Chairman Xi and President Trump with rocket-man Chairman Kim stuck in the middle… tonight, we lighten up the DPRK:

According to a Wall Street Journal report, President Donald Trump is considering a requirement that all next-generation 5G cellular equipment used in the United States will have to be designed and manufactured outside China.
As part of the 150-day executive order review, initiated after cybersecurity concerns in the United States, administration officials are asking tech companies and telecom equipment makers if they can develop U.S. hardware including cellular-tower electronics as well as routers and switches, and software from sourcing completely outside China.

(WSJ) […] The conversations are in early and informal stages, they said. The executive order calls for a list of proposed rules and regulations by the 150-day deadline, in October; so, any proposals may take months or years to adopt.

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North Korea state-run news agency is reporting on a letter from U.S. President Trump to North Korean Chairman Kim Jong-Un.    In an interesting aspect to the media report, KCNA releases a picture of Chairman Kim reading the letter.

North Korean leader Kim Jong Un reads a letter from U.S. President Donald Trump, in Pyongyang, North Korea in this picture released by North Korea’s Korean Central News Agency (KCNA) on June 22, 2019.

On the hostage dynamic…. last week the hostage taker (Chairman Xi), finally positioned the public optics of Chairman Kim as the hostage; and indicated a likelihood Beijing would negotiate terms for release (better trade deal) with President Trump.  Therefore the rescuer (Trump) now communicates with the hostage (Kim) against an entirely different geopolitical background.
Additionally, both President Trump and Chairman Kim know the picture will be analyzed by high-tech software (Beijing, China and Russia) and the content is easily discoverable.   The message itself, as well as the answer to the message (from Kim), is likely in the picture.  [Note: the White Shirt, business office, is part of the reply].
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The money quote from Chinese Chairman Xi Jinping in the role of magnanimous panda as he departs Chairman Kim:

“This visit has achieved complete success in reinforcing the traditional friendship between China and North Korea”..

Kim remains hostage, and Xi highlights his captive capabilities in advance of the G20 ‘expanded’ meeting with President Trump in Osaka, Japan.  Magnanimous panda thinks he’s created leverage for hostage release negotiations with Trump in exchange for economic and trade concessions… except he hasn’t.
Beijing has fallen into a trap created by a combination of their cultural approach toward geopolitical confrontation and an echo-chamber that does not allow -or consider- warnings from dissenting voices.  In essence, it might sound goofy considering the magnitude of the issues at hand, but Beijing doesn’t know President Trump.
One of the reasons for the miscalculation is likely due to Beijing weighing their analysis and strategy based on typical Western reporting similar to THIS ARTICLE in the New York Times.
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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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