President Trump has been executing a foreign policy, a clear doctrine of sorts, where national security is achieved by leveraging U.S. economic power. It is a fundamental shift in approaching both allies and adversaries; summarized within the oft repeated phrase: “economic security is national security.”
Initially, given the nature of multiple military entanglements, a traditional military approach could not easily be reversed or dispatched.  Defense Secretary James Mattis was the bridge to a path forward. President Trump removed military constraints, allowed rules of engagement that were much stronger, and let Mattis work on confronting and stamping out terror threats. In essence, an aggressive “let’s get this over with” approach.
However, that strong-arm military approach cannot continue indefinitely because it will never end. James Mattis was/is one voice who doesn’t want it to end. Hammers are useless without nails. War and intervention have a long history of unnecessarily expanding if not constrained. The war machine turns into a military business.
Candidate Trump, now President Trump, campaigned on a desire to bring U.S. troops  home from all the “stupid wars”, in part because they are also “expensive wars.”  And as a direct consequence the time for Defense Secretary Mattis was sure to come to an end.

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A few days ago many critics were concerned over an announced pledge of U.S. State Department funding ($4.8 billion) for security and economic development in Mexico. However, CTH noted the approach was likely not what it seemed.
Those who followed the USMCA construct closely noted that U.S. President Trump (through Jared Kushner) and Mexican President Lopez-Obrador (through Jesus Seade) were doing something much bigger than a trade agreement; they were structuring an entirely new U.S-Mexico economic alliance.
With increased investment in central America by the Chinese government; and with Venezuela in a state of vulnerability to becoming a proxy therein; and with Brazil taking a more nationalistic approach; a completely new partnership which focused heavily on domestic security and economics was taking shape between the U.S. and Mexico. Throughout 2017 and 2018 the U.S. media was oblivious to it.
Then, two days ago, the U.S. State Department made public the principles of an economic alliance between the United States and Mexico. [See Here] The outline should be familiar: Economic Security is National Security.
Today Department of Homeland Security chief Kirstjen Nielsen told lawmakers that migrants heading to the southwest border to seek asylum in the United States will have to wait in Mexico until their claims are processed, under an agreement between the two countries:

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CEA Charman Kevin Hassett is a happy MAGAnomic warrior as he continues to explain the disconnect between the strength of the U.S. economy -vs- the world; and how the disconnect impacts the multinationals (Stock Market).

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The interview is in two segments. Part II is below:
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CTH has pointed, repeatedly, toward a very specific economic and financial dynamic  because President Trump is uniquely focused on Main Street’s “real economy“.
Everything happening in/around the financial markets is very predictable when you focus on understanding the principles of Main Street MAGAnomics and how those basic principles diverge from Wall Street’s “paper economy”.
President Trump is clawing back American wealth; inch by inch… bit by bit.  This is the full monty.  This is economic nationalism. This is for all the marbles.
This is it.
Everything is happening in a very predictable sequence. Few understand the MAGAnomic reset, and what was predicted to happen in the space between disconnecting a Wall Street economic engine (globalism and multinationals) and restarting a Main Street economic engine (nationalism/America-First).  In 2015, 2016, 2017, 2018 CTH explained where we would be today. With current Wall Street events, perhaps it is worthwhile remembering the dynamic.
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I apologize in advance for my shortcomings in trying to de-wonk multinational economics and the financial constructs that impact, at the core, the U.S. worker and consumer.  It’s a big issue to tackle in digestible portions.  However, that said some inflationary statistics are presenting an opportunity for expanded discussion.
Reuters has an article out today highlighting inflationary data as released by the Bureau of Labor Statistics (BLS) [DATA HERE]. The overall summary is the Consumer Price Index is stable or flat reflecting low inflation on measured goods; however, that’s not the part that bears emphasis.   Instead I would direct attention to this:

The Fed’s preferred inflation measure, the core PCE price index excluding food and energy, increased 1.8 percent year-on-year in October, the smallest gain since February, after rising 1.9 percent the prior month. It hit the U.S. central bank’s 2 percent target in March for the first time since April 2012.

At the heart of the controlled monetary system; at the epicenter of the multinational global control mechanisms; inside the offices of the global economic elites; there is a system of financial manipulation with tentacles that reach into your pocket.  This system seems hard to understand, but it is critical to do so… so we need to try and understand it.
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The CFO of Huawei has been released on bail pending her extradition hearing to the United States. Ms. Meng will have to wear and ankle monitor and travel with security agents until her next hearing on February 6th.

(Via NBC) A Vancouver judge set a $10 million CAD bail ($7.5 million U.S.) for Huawei Chief Financial Officer Meng Wanzhou Tuesday, capping a week of increasing trade tensions and strong market reactions around the dispute between the Department of Justice and one of China’s largest hardware companies.
The United States had asked the Vancouver court to deny bail for Meng, whose father is a billionaire and a founder of Huawei, calling her a flight risk. Canada has been expected to extradite Meng to the United States over charges that the company improperly took payments from Iran in violation of sanctions against the country.

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Early this morning China transmitted and interesting tweet position that was/is a transparent display of their panda mask. In essence the panda play was a call for team USA to drop the zero-sum outlook and seek a win/win. Given the historic nature of Chinese negotiations the tweet was rather funny. However, it does highlight the dance.
Additionally, a few hours later President Trump tweeted about ongoing U.S-China trade discussions and something to watch for:
Moments ago we received the first indications of Chairman Xi’s panda play:

(Via Wall Street Journal) China agreed to reduce tariffs on U.S. autos to 15%, down from 40% currently, during a phone call with U.S. officials that opened the latest round of trade talks aimed at settling a trade dispute festering between the world’s two largest economic powers, according to a person familiar with the matter.

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The issues appear multifaceted. In a Canadian court lawyers for Chinese company Huawei CFO, Meng Wanzhou, are arguing for bail while she awaits extradition to the United States for violations on Iran sanctions.
There’s an element to this entire story that appears suspicious. President Trump was intentionally kept out of the loop; and that reality could infer that U.S. (deep state) actors were/are leveraging the Huawei matter as a poison pill against Trump’s trade reset with China.
Years ago such a possibility might be dismissed as conspiracy theory. However, today, knowing how far the administrative state has gone to disrupt the Trump presidency, such a concerted deep state scheme with Canada seems entirely plausible.

VANCOUVER (Reuters) – A Canadian provincial court on Monday weighed whether to grant bail to a top executive of one of the world’s biggest telecommunications companies, Huawei Technologies, while she awaits a ruling on extradition to the United States.
U.S. prosecutors want Chief Financial Officer Meng Wanzhou to be extradited to face accusations she misled multinational banks about Huawei’s control of a company operating in Iran, putting the banks at risk of violating U.S. sanctions which would incur severe penalties, court documents said.

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CTH has never hidden our disgust for the corrupt lobbying enterprise known as the U.S. Chamber of Commerce, and their President Tom Donohue.  No internal organization in modern history has done more to harm American workers and American industry than the U.S. Chamber of Commerce.  Their fraudulent and corrupt enterprise is a toxic threat to our economy.
Today the U.S. Chamber of Commerce issues a statement denouncing the trade strategy of the Trump administration and announcing their lobbying support for the USMCA trade agreement is contingent upon the removal of Steel and Aluminum tariffs.

As the Washington Times writes: “The Chamber had previously complained that the deal’s language limiting protections for investors and stiffening of the “rules of origin” for when autos can be duty-free were problematic.”  Put another way: Wall Street is angry their multinational constructs are not supported, and protecting U.S. workers from the predatory nature of global outsourcing is bad for their controlled market schemes.
Ultimately, Donohue’s biggest complaint -revealed by historic review- is that his organization didn’t get to write the USMCA trade agreement and were stopped from selling their special interest carve-outs to their corporate clients.
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President Trump is the first U.S. President to confront Beijing directly -head on- and the Chinese respect him immensely for it. It is an inherently adversarial relationship; but it is also a conflict where opponents respect their enemy because the outcome is victory or death. Ultimately, this, from the perspective of China, is a zero-sum contest.
President Trump is also the first U.S. President to: (1) understand how the red dragon hides behind the panda mask; and (2) be willing to directly confront that dynamic. That’s where U.S. Trade Representative Robert Lighthizer comes in.

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Ambassador Lighthizer is willing to go to the mattresses because he knows that ultimately his kids future, and his bosses’ grand-kids future, are entirely dependent on victory.  Freedom or serfdom, those are the alternatives.  Yes, this is that big a deal.  The biggest of all big deals (pun intended) in the last century.
There is also no doubt in my mind that President Trump has a very well thought out long-term strategy regarding China.
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