Those who followed the first-term trade negotiations will likely remember the challenges of dealing with the European Union and their entrenched dependency on retaining the Marshall Plan system; a one-way tariff process that enabled Europe to rebuild after World War II.

Unfortunately, as with all long-term financial subsidies, the beneficiary becomes dependent and retaining benefit is their only objective.

Former Commerce Secretary Wilbur Ross spent the majority of his time focused on trying to negotiate with the EU to remove these ridiculous trade benefits that have long exhausted their usefulness.  Enough is enough.

Term-two Commerce Secretary Howard Lutnick has the same regional assignment formerly held by Wilbur Ross, with U.S. Trade Representative Jamieson Greer in full support.

Treasury Secretary Scott Bessent has ASEAN nations as his primary regional focus, Lutnick’s primary region is the EU and President Trump is personally attentive to China and the USMCA.  USTR Greer then goes to the primary with the closest deal under consideration and organizes the paper construct, the technical aspects.  It’s an overall similar arrangement to term-1 only with a much bigger scope.

As would be expected from historic reference points in trying to break this insufferable one-way Marshall Plan system, the EU is once again operating in bad faith and will not give up their status.  When President Trump says the entire reason for the EU to form was to ensure their retention of this Marshall Plan benefit, he’s not wrong.  That’s the brutally honest background.

President Trump has announced today that a 50% tariff rate will be applied toward all EU imports until such a time as they come to the negotiation process willing to let go of their economic model dependent on the one-way benefit.  There really is no other way to break the Gordian trade knot, other than to cut it – forcefully.

President Trump (via Truth Social) – “The European Union, which was formed for the primary purpose of taking advantage of the United States on TRADE, has been very difficult to deal with. Their powerful Trade Barriers, Vat Taxes, ridiculous Corporate Penalties, Non-Monetary Trade Barriers, Monetary Manipulations, unfair and unjustified lawsuits against Americans Companies, and more, have led to a Trade Deficit with the U.S. of more than $250,000,000 a year, a number which is totally unacceptable. Our discussions with them are going nowhere! Therefore, I am recommending a straight 50% Tariff on the European Union, starting on June 1, 2025. There is no Tariff if the product is built or manufactured in the United States. Thank you for your attention to this matter!”

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Earlier today President Trump held a 2-hour phone call with Russian President Vladimir Putin. The objective of President Trump is clear; however, he is battling against recent history and the domestic political environment within Washington DC.

President Trump provides a summary via Truth Social: “Just completed my two-hour call with President Vladimir Putin of Russia. I believe it went very well. Russia and Ukraine will immediately start negotiations toward a Ceasefire and, more importantly, an END to the War. The conditions for that will be negotiated between the two parties, as it can only be, because they know details of a negotiation that nobody else would be aware of.

The tone and spirit of the conversation were excellent. If it wasn’t, I would say so now, rather than later. Russia wants to do largescale TRADE with the United States when this catastrophic “bloodbath” is over, and I agree. There is a tremendous opportunity for Russia to create massive amounts of jobs and wealth. Its potential is UNLIMITED.  Likewise, Ukraine can be a great beneficiary on Trade, in the process of rebuilding its Country. Negotiations between Russia and Ukraine will begin immediately.

I have so informed President Volodymyr Zelenskyy, of Ukraine, Ursula von der Leyen, President of the European Commission, President Emmanuel Macron, of France, Prime Minister Giorgia Meloni, of Italy, Chancellor Friedrich Merz, of Germany, and President Alexander Stubb, of Finland, during a call with me, immediately after the call with President Putin. The Vatican, as represented by the Pope, has stated that it would be very interested in hosting the negotiations. Let the process begin!”

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Treasury Secretary Scott Bessent appears on NBC Meet the Press to discuss the current status of the trade negotiations, tariffs and pending trade deals. In addition, Secretary Bessent outlines the construct of President Trump’s tax proposals and the intended benefits therein to middle-class working Americans.  WATCH (Transcript Below) 

[Transcript] KRISTEN WELKER: Welcome back. There are new economic warnings after the credit ratings agency, Moody’s, downgraded the United States’ credit rating one notch from its AAA rating. Moody’s citing concerns over the nation’s rising debt. It comes as President Trump’s tax bill suffered a setback in Congress this past week. Joining me now is Treasury Secretary Scott Bessent. Secretary Bessent, welcome back to Meet the Press.

SEC. SCOTT BESSENT: Kristen, good to see you. Thanks for having me on.

KRISTEN WELKER: It’s wonderful to have you on after a long foreign trip. Thank you for being here. Let’s start right there with Moody’s downgrading the nation’s credit rating. And they do cite the debt. I want to read you a little bit of what Moody’s says. It says, quote, “If the 2017 Tax Cuts and Jobs Act is extended, which is our base case, it will add around $4 trillion to the deficit over the next decade.” Several Republicans, Mr. Secretary, are citing similar concerns. Does the president’s tax bill need to do more to address the nation’s debt and deficit?

SEC. SCOTT BESSENT: Well, Kristen, first – first of all, I – I think that Moody’s is a lagging indicator. I think that’s what everyone thinks of credit agencies. Larry Summers and I don’t agree on everything, but he said that’s when they – they downgraded the U.S. in 2011. So it’s – it’s a lagging indicator. And just like Sean Duffy said with our air traffic control system, we didn’t get here in the – in the past 100 days. It’s the Biden administration and the spending that we have – have seen over the past four years. We inherited 6.7% deficit to GDP, the highest when we weren’t in a recession, not in a war. And we are determined to bring the spending down and grow the economy.

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Wait,… wha?  Prices were supposed to skyrocket, so said the experts, pundits, Wall Street analysts and all the ‘talking heads.’  Alas, the Bureau of Labor and Statistics (BLS) releases the April consumer price index [SEE HERE] and, shocker, prices on the critical consumer goods that matter most are dropping.

The rate of inflation dropped to a four-year low in April. Overall consumer prices increased 2.3% from a year earlier, down from 2.4% rise in March.  However, inside the number’s things get better.  Prices for groceries, food at home including eggs, used cars and gasoline all fell.

Meats, poultry and eggs dropped 1.6% overall.  The price of eggs dropped 12.7% for the month. [SEE TABLE 2]   Fuel Oil dropped 2.6%, propane dropped 4.7%.  If it’s a food product grown and harvested in America, the price dropped.  Remember that popular boycott by the Canadians on Orange Juice and citrus from Florida?  Oranges dropped 3.7% in price for American consumers; Citrus overall -2.8%.

The items that are critical to a middle-class or working-class family, all dropped in price.  This is exactly the same pricing outcome we experienced in 2017 that continued for two years.   Energy prices drive farm prices and the total food supply chain; the energy prices have dropped substantially since President Trump took office.

Keep an eye on the “Relative Importance Index” [first column table, 2], because this is where the BLS statisticians will start to play with the data in order to stop President Trump from getting credit for lower prices.  The BLS manipulating this index point is why CTH stopped using their data reports in 2022.  Many people were perplexed at the end of 2021 when suddenly the inflation data no longer made sense.  The BLS changed the priority weighting in order to assist Biden.

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Appearing on CNBC this morning, Treasury Secretary Scott Bessent gives an outline of the discussions between the USA and China.  Bessent and U.S. Trade Representative Jamieson Greer held meetings with the Chinese delegation in Geneva, Switzerland this past weekend.

Pay attention to Secretary Bessent describing [05:40] how Chinese ‘overproduction’ is now reaching the shores of partnered nations, that is the element CTH previously outlined {SEE HERE}, which is a rather significant issue right now.  The goods themselves are not ‘generic’ in nature, they are branded high-end products awaiting labeling and distribution once their component part of the global tariff is determined.  This is part of the ‘urgency’ motive for Beijing to seek some understanding of the timeline.

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CTH suspected we were going to see this…. and it might just work. President Trump has announced via Truth Social that he will sign an executive order to structurally create a “most favored nation” (MFN) policy toward USA drug manufacturing prices.

Americans must receive a matching price to the lowest cost sold.

President Trump – “For many years the World has wondered why Prescription Drugs and Pharmaceuticals in the United States of America were SO MUCH HIGHER IN PRICE THAN THEY WERE IN ANY OTHER NATION, SOMETIMES BEING FIVE TO TEN TIMES MORE EXPENSIVE THAN THE SAME DRUG, MANUFACTURED IN THE EXACT SAME LABORATORY OR PLANT, BY THE SAME COMPANY??? It was always difficult to explain and very embarrassing because, in fact, there was no correct or rightful answer.

The Pharmaceutical/Drug Companies would say, for years, that it was Research and Development Costs, and that all of these costs were, and would be, for no reason whatsoever, borne by the “suckers” of America, ALONE. Campaign Contributions can do wonders, but not with me, and not with the Republican Party. We are going to do the right thing, something that the Democrats have fought for many years.

Therefore, I am pleased to announce that Tomorrow morning, in the White House, at 9:00 A.M., I will be signing one of the most consequential Executive Orders in our Country’s history. Prescription Drug and Pharmaceutical prices will be REDUCED, almost immediately, by 30% to 80%. They will rise throughout the World in order to equalize and, for the first time in many years, bring FAIRNESS TO AMERICA!

I will be instituting a MOST FAVORED NATION’S POLICY whereby the United States will pay the same price as the Nation that pays the lowest price anywhere in the World. Our Country will finally be treated fairly, and our citizens Healthcare Costs will be reduced by numbers never even thought of before. Additionally, on top of everything else, the United States will save TRILLIONS OF DOLLARS. Thank you for your attention to this matter. MAKE AMERICA GREAT AGAIN!” [source]

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As expected by anyone with common sense, the statement by Chinese Vice-Premier He Lifeng is considerably different from the U.S. media interpretation of the White House statement.

According to He Lifeng: […] “The atmosphere of the meeting was candid, in-depth and constructive. The meeting reached substantial progress and achieved important consensus. The two sides agreed on establishing a consultation mechanism for trade and economic issues, identified the lead persons on each side, and will carry on further consultations relating to trade and economic issues of their respective concerns. The two sides will finalize relevant details as soon as possible and will issue a joint statement reached on May 12.”

[…] “China’s position towards this trade war has been clear and consistent; that is, China doesn’t want to fight a trade war, because trade wars produce no winners.  But if the U.S. insists on forcing this war upon us, China will not be afraid of it and will fight to the end.” 

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This ‘clarification‘ of sorts by Big Panda should not come as a surprise, despite the White House press release and the wording of the title.

Neither Secretary Bessent nor USTR Greer would make an announcement of a “trade deal” in advance of President Trump’s personal announcement. PERIOD!

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President Donald Trump is confronting the dragon behind the panda mask with precision. It’s very obvious the prior reconnaissance, trade probes and tariff tests of ’17, ’18, ’19, are paying dividends.

President Trump has cut off the transnational shipping lanes by globalizing the tariffs against China. Beijing is in a forced holding pattern waiting to see the outcome of Southeast Asia and European trade agreements.

Having spent some serious time in the field in advance of ‘Liberty Day’ all of my contacts have the same message; China is trying to find position.

In a little reported reality, in order to offset the problem, many Chinese manufacturers have actually continued the production of several branded product lines (very well-known and established brands) despite the absence of orders for the finished goods from the companies.

Several shipments of those finished goods have started to arrive at China-partnered ports. This is very interesting, because it may lead to market dumping of a higher quality product than most anticipate.

Within the apparel sector, ASEAN consumers cannot afford the fashion branded product at the prices determined by the actual brand owners. However, there is now a strong likelihood -based on what is being reported by the receivers- that the product itself will be marketed -likely dumped- without the brand label. This is actually high-quality apparel distributed for a fraction of the price of the brand.

I’ll be getting more details on this soon, however, it looks like the broad outlines are verified by multiple sources. I’ll use some fake names to explain.

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White House NEC Director Kevin Hassett gives an update on the current status of trade negotiations around the world.  After finishing a CNBC interview (also linked below) Director Hassett noted that Asia was likely to be the next place for an announcement following the completion of the United Kingdom deal.

Hassett outlines that approximately “two dozen” bilateral free trade agreements are completed within the reciprocity framework, and the sequencing of announcements is up to President Trump.  Japan, South Korea and ASEAN nations would be candidates for the next deal as announced. Treasury Secretary Scott Bessent and USTR Jamieson Greer are currently in Switzerland and will be meeting with their Chinese counterparts to begin the first point of discussion. WATCH:

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The press availability above comes immediately following a more extensive CNBC interview which is outlined below.

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Previously we watched Brussels organize pro-EU rallies in Great Britain (they lost), Hungary (they lost), the Netherlands (they lost), Poland (they won), Georgia (they lost), Moldova (they won) while Germany & France still in a state of flux.  Now the EU/NATO operation focuses on Romania.

With eurosceptic George Simion winning the first-round election and leading in the polls, the EU/NATO must increase their influence operation, or they lose position.

The largest NATO base is currently being constructed in Romania and Brussels cannot afford to permit the Romanian people to be an impediment to their militaristic progress.

The narrative is the same each time; if the citizens of the targeted country vote to support their own nationalistic interests, they are Russian sympathizers.

The pro-EU rally organizers are the same people who showed up in Warsaw, Prague, Budapest and Tblisi.

BUCHAREST, May 9 (Reuters) – Thousands of people rallied in Romania’s capital, Bucharest, and other cities in support of the European Union on Friday, one week before a presidential election run-off that could see a hard-right eurosceptic sweep into power.

Hard-right nationalist George Simion won the first round of the presidential ballot on Sunday, and an opinion survey earlier this week showed him leading ahead of the May 18 run-off vote against centrist Bucharest Mayor Nicusor Dan.

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