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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For the past several weeks China has been hoping to divide the trade dispute into two tracks thereby separating trade issues related to U.S. national security.  Beijing wants, heck needs, the simple agricultural trade because they are food dependent and need that uninterrupted.  However, they are strongly opposed to a comprehensive trade reset.
Beijing wants to wait-out President Trump on the more substantive issues surrounding: intellectual property rights; forced transfer of IP and manufacturing secrets; non tariff barriers including limited access to China’s controlled markets; and state run company subsidies that lead to market dumping and saturation.
Along with avoiding legal compliance issues, China wants to carve-out the complex stuff from a simple trade agreement.
However, when asked today about the possibility of carving out a partial deal President Trump emphatically said: “NO”.  During a press conference with Australian Prime Minister Scott Morrison, President Trump said:

“We’re looking for a complete deal, I’m not looking for a partial deal.  China has been starting to buy our agricultural product; if you noticed over the last week, and actually some very big purchases. But that’s not what I’m looking for, we’re looking for the big deal.

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Michael Pillsbury traveled to Hong Kong recently to help explain the goals and objectives of President Trump’s U.S-China trade position.  During an interview, Mr. Pillsbury warns Beijing interests not to interpret the current U.S. position as aggressive, because the dragon has yet to see the severe side to Trump’s position.

During an interview with the South China Morning Post, Pillsbury points out there are a great many more ways that President Trump is prepared to respond if the combative trade position from China remains hostile to any concessions.  This first option was their best option.  However, should they choose further trade conflict, President Trump will happily oblige.
CTH research on Trump’s outlook, vis-a-vis China, has led us to believe there is no upper limit to the economic weapons President Trump is willing to deploy; and considering that Pillsbury can be relied upon to deliver honest, accurate and deliberate remarks about the White House position, these warnings from a close advisor to the President should be weighted accordingly.

(South China Morning Post) – The United States is set to ramp up the pressure on China if a trade deal is not agreed soon, a key White House adviser said, adding that Washington has so far imposed only “low level tariffs” on the Asian giant.

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The dance with the dragon is a complex geopolitical relationship between two large economies. China’s view within the dynamic is shaped by their own internal ideology and outlook.  The panda mask dynamic was/is strategic and has served them well for decades; but now President Trump -while engaging a structural confrontation- has used the panda strategy against Beiing’s interests.  China is flummoxed.

Each of President Trump’s trade team members have a specific role; each member also has a specific opponent within the dance:
♦Peter Navarro is the blue-collar hawk. He focuses on the the administration’s Wall Street adversaries; and the U.S. multinationals -American companies- who have aligned their interests with Beijing.  Navarro’s focus is internal to U.S. interests.  Navarro confronts  U.S. corporations, Wall Street interests, who are working against Main Street.
♦Treasury Secretary Steven Mnuchin carries the economic financial weapons (represents the dollar), and he faces toward global adversaries (IMF, World Bank, European Central Bank etc.) who have also aligned their interests with Beijing and the status quo.
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