Hat Tip OverTheMoonbat for making sure we didn’t miss this segment from last week.  This video also explains why Larry Kudlow, Secretary Mnuchin, Secretary Ross and Peter Navarro have tended to spend more time discussing economic policy with CNBC analysts than Fox Business.   However, before watching, it is worth revisiting the background.

For three years CTH has explained the challenge in dealing with, or renegotiating with, the Beijing, China ideology.  Encapsulated thus in 2018:

[…] China has no cultural or political space between peace and war; they are a historic nation based on two points of polarity. They see peace and war as coexisting with each other.
China accepts and believes opposite or contrary forces may actually be complementary, interconnected, and interdependent in the natural world, and they may give rise to each other as they interrelate to one another. Flowing between these polar states is a natural dynamic to be used -with serious contemplation- in advancing objectives as needed.
Peace or war. Win or lose. Yin and Yang. Culturally there is no middle position in dealings with China; they are not constitutionally capable of understanding or valuing the western philosophy of mutual benefit where concession of terms gains a larger outcome. If it does not benefit China, it is not done. The outlook is simply, a polarity of peace or war. In politics or economics the same perspective is true. It is a zero-sum outlook.
If it does not benefit China, it is not done !

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Steve Bannon is at his best when he explains how the Chinese Communist Party (CCP) use their power in economics -against the capitalist view of profit- to erode the values of western companies and corporations.   Good points made in this interview.

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Lots of dragon-dancing with a very hungry panda.

President Trump, U.S. Trade Representative Robert Lighthizer and Treasury Secretary Mnuchin gathered with their Chinese counterparts in the Oval Office for a lengthy  announcement of “phase-one” of a U.S-China trade agreement.  Vice-Premier Liu He leads the Chinese delegation.  [No point sheet on USTR website yet]  According to the presser:

Phase One has reached ‘agreement in principle‘, and includes: Intellectual Property issues; Banking and Financial Services to include currency devaluation; and major agricultural purchases ($50 billion +).  There will be several phases, and each phase will have an individually tailored enforcement mechanism. [Note: this approach sounds similar to the ‘six sectors and stages’ USTR Lighthizer discussed in March 2019.]
The Phase One agreement details still have to be put on paper over the next five to six weeks.  The U.S. and China are hopeful to have ‘phase one‘ complete by December. In exchange for current AG purchase commitments, and as an act of good faith while phase-one is finalized, the U.S. will suspend the tariff rate increases scheduled to take effect on October 15th. The tariff increase from 25% to 30% has been ‘suspended‘.
The scheduled U.S. tariff increases for December are still planned; however, they will be assessed as part of the ongoing negotiations.  Meanwhile, touchy issues like tech company Hauwei, 5G, telecom and the Chinese firms on the U.S. blocked “entity list” (ie. trade ‘blacklist’) are not part of the discussions.  Those issues fall under U.S. National Security and will not be part of any ongoing trade negotiations.
[Video Below]
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Earlier today Treasury Secretary Steven Mnuchin held a press conference at the White House to announce a new executive order constructed by the Trump administration that would deliver economic sanctions due to Turkish activity in Northern Syria.
“These are very powerful sanctions. We hope we don’t have to use them. But we can shut down the Turkish economy if we need to,” Treasury Secretary Mnuchin tells reporters.

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Additionally, Secretary Mnuchin notes there has been “significant progress” in the U.S-China trade discussions over the past two days. Vice-Premier Liu He is schedule to meet President Trump in the oval office at 2:45pm.
[Transcript] SECRETARY MNUCHIN: Hello everybody. So, I just met with President Trump, and he has authorized and will be signing a new executive order giving the Treasury Department, in consultation with himself and Secretary Pompeo, very significant new sanctions authorities that can be targeted at any person associated with the government of Turkey, any portion of the government. This will be both primary sanctions and secondary sanctions that will be applicable.
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Earlier today President Trump held a White House event to sign an executive order on Transparency in Federal Guidance and Enforcement. [Details Here and Here]
In addition, President Trump took numerous questions from the media during a lengthy press conference [Video and Transcript below].

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[Transcript] – THE PRESIDENT: Well, thank you very much. I’ll start by saying I just spoke with Boris Johnson, and we had a good talk about a number of subjects, and we’ll maybe talk about it a little bit later. But we had an extended conversation and some pretty good ideas, I think. They want to see if we can do a couple of things, and they’ll be doing certain things for us.
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Despite Wall Street headline writers trying to frame an opposite reality, President Trump has no disposition toward making a trade deal with China.  Conversely, China has no intention of changing the closed and state-controlled structure of their economy.  That’s the reality amid a trade dance that is going absolutely no-where.
This quote is priceless: “We can add the Diplomatic war to the Financial war, Currency war and Technology war, that we already have,” John Browning, managing director at brokerage BANDS Financial in Shanghai, said in a note to investors.

The Chinese position is thus:

REUTERS […] The U.S. demand that the Chinese Communist Party fundamentally change how it directs China’s massive economy to shift to a more Western model of free-market capitalism is irrational and misguided, a Chinese diplomat in the United States said.
“What we achieved during the past few decades shows that our system is good for development in China,” the official said, speaking on condition of anonymity.

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Someone is coming to the United States next week.  Can you read this tweet and predict who it is?…

Seriously, given that we have watched this dynamic play out, over-and-over, for more than two years, it seems almost silly that China continues to play this tactical negotiation card.
Alas, :::heavy sigh::: this stupid dance continues…

WASHINGTON (Reuters) – President Donald Trump said on Thursday a delegation from China would come to the United States next week for more trade talks.

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In the bigger picture… Within the trade team, Commerce Secretary Wilbur Ross is positioned with primary responsibility toward the EU and India. Ross clear-cuts through the politics, explains Trump’s objectives amid the trade proposals, and paves a path for U.S. Trade Rep Bob Lighthizer to engage his counterparts.
India has always been a key strategic nation within the global trade-realignment taking place by the Trump administration.  Under all of the banter, the “Indo-Pacific” strategy is structurally the decoupling of the U.S. from China. As a part of the strategy President Trump has positioned the ASEAN (Association of Southeast Asian Nations) as benefactors in manufacturing & trade as an outcome of the U.S. decoupling from China.

However, India has genuine concerns about the global dynamic. Specifically, India is worried about allowing the multinationals to have influence over their economy and social structure. In this regard India is not wrong; their concerns are not unfounded.
We can all see, heck we’ve lived through, massive multinational corporations quickly gaining too much influence; including -eventually- corporate influence over the politics of a nation. That inherently leads to corruption.
When Americans see it in other nations we call it “bribery and corruption”, but when it happens in Washington, DC, we call it “lobbying”; the process is exactly the same.
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There are two aspects to this recent story: the visible surface issue; and the unspoken issue below the surface.  In essence, there’s more here than most will recognize at first blush.
The surface level aspect is the Trump administration considering a block on U.S. investments into the opaque financial system that is China.
The U.S. financial media view the proposal through the prism of the White House looking for leverage over Beijing during negotiations:

(Via CNBC) […] Restricting financial investments in Chinese entities would be meant to protect U.S. investors from excessive risk due to lack of regulatory supervision, the source said.
The deliberations come as the U.S. looks for additional levers of influence in trade talks, which resume on Oct. 10 in Washington. Both countries slapped tariffs on billions of dollars worth of each other’s goods. The discussions also come as the Chinese government is taking steps to increase foreign access to its markets.

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U.S. Treasury Secretary Steve Mnuchin talks to FOX Business’ Lou Dobbs about the current status of U.S-China trade negotiations.  Mnuchin and U.S. Trade Representative Robert Lighthizer have been working together on the overall China issues.
Mnuchin delivers a deliberate explanation of the current status.

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