Boy howdy, this article by The Associated Press is very telling.

First, it’s worth remembering that in the fine print of the USMCA deal, Mexico and Canada must comply with North American parts origination for anything they want to manufacture for sale into the United States.  Meaning, all trade manufacturers must either create their component parts domestically, or purchase them from the U.S, Mexico and Canada. It’s the core point of the USMCA trade agreement.

Secondly, in an aspect exclusive to the U.S. part of the deal that President Trump and USTR Lighthizer insisted upon, if either Canada or Mexico are deemed to be non-compliant with the agreement, the USA can cancel/override any trade agreement Mexico or Canada have with another nation.  It’s a heavy accountability hammer securing the gate into the massive USA market.

In an AP report today, Mexico is scrambling to find local or North American sources of parts and components, because President Trump is set to come into office and look at USMCA compliance.  Apparently, Mexico has been using excessive amounts of Chinese component parts for goods being sent into the USA and Canada.  Now they are quickly trying to source alternatives.

MEXICO CITY (AP) — Mexico has been taking a bashing lately for allegedly serving as a conduit for Chinese parts and products into North America, and officials here are afraid a re-elected Donald Trump or politically struggling Canadian Prime Minister Justin Trudeau could try to leave their country out of the U.S.-Mexico-Canada free trade agreement.

Mexico’s ruling Morena party is so afraid of losing the trade deal that President Claudia Sheinbaum said Friday the government has gone on a campaign to get companies to replace Chinese parts with locally made ones.

“We have a plan with the aim of substituting these imports that come from China, and producing the majority of them in Mexico, either with Mexican companies or primarily North American companies,” Sheinbaum said.

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The interview below is a little complicated at first on the issues of economics. If you are not an economic wonk, or deep research into the theories and realities of how finance and human activity can transact in the world of economics, it might be a little complicated. However, if you are a person who enjoys a deep discussion on the intricacies of the battle between economic freedom -vs- socialism, then this is for you.

Lex Fridman does an excellent job of asking a short ‘big picture’ question, then listening to a lengthy response and answer. The interview is very substantive and as the interview progresses beyond the economic issues, Argentina President Javier Milei pulls back to give perspective on the real battle within the financial ‘west’.

The first hour is wonky, complex and full of answers about what a very intelligent President Milei did to correct the course in Argentina. The second hour pulls back to the broader landscape of freedom. Find some quiet time to enjoy and absorb. WATCH:

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Chapters:
0:00 – Introduction
3:27 – Economic freedom
8:52 – Anarcho-capitalism
18:45 – Presidency and reforms

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Suspicious Cat smells some possible streamlining and downsizing afoot.

Not only has President Trump announced the nomination of Howard Lutnick as Commerce Secretary, but he has also announced that Lutnick will carry the role and “responsibility for the Office of the United States Trade Representative” (USTR).

[LINK]

Perhaps in the second term President Trump and Howard Lutnick are going to fold the USTR into the Dept of Commerce?  Interesting.

Hopefully, Howard Lutnick, like Wilbur Ross, will keep the U.S. Chamber of Commerce blocked from influence over the upcoming trade discussions and potential trade agreements.  We note that former USTR Lighthizer was part of the transition discussion, and it seems odd his name has not surfaced…. yet.

Regardless, Howard Lutnick is an excellent choice for all the reasons previously outlined.

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In September we noted Howard Lutnick was the *ONLY* person, other than former Commerce Secretary Wilbur Ross, who accurately outlined: (1) Energy as the core source of sticky inflation; and (2) ending the Marshal Plan for EU tariffs as a key objective in term-2.

In combination with his eloquence in outlining MAGAnomics, which is remarkably impressive, this combination of skillsets would make Howard Lutnick the ideal candidate for Term-2 Commerce Secretary.  The guy simply ‘gets it.’ {SEE HERE}

Howard Lutnick was also in the running for Treasury Secretary; however, today several media outlets are reporting that Lutnick is likely to be nominated as Commerce Secretary, making him the first and leading WOLVERINE announced in the MAGAnomic team.

WASHINGTON DC – Donald Trump is expected to nominate veteran Wall Street financier Howard Lutnick to lead the Commerce Department, according to people familiar with the matter, elevating one of the financial world’s most vocal supporters of the president-elect to a crucial position overseeing the incoming administration’s economic agenda.

Lutnick, chief executive of the financial-services firm Cantor Fitzgerald, in recent months has become a close Trump ally and had been a top contender to lead the Treasury Department. As the co-chair of the president-elect’s transition team, Lutnick has spent much of his time at Mar-a-Lago, Trump’s private Florida club, poring over shortlists of candidates for positions in the administration.

A spokeswoman for Lutnick declined to comment. A Trump transition team spokeswoman didn’t immediately respond to a request for comment. Punchbowl News earlier reported that Trump was expected to chose Lutnick for the role. (read more)

Howard Lutnick gets it. The essential core of MAGAnomics.  Drive down the cost of goods through expanded energy development, then leverage reciprocity in tariffs to end the exfiltration of wealth.  Then cut out regulation and unleash American enterprise. This is the way to reverse this insufferable economic trajectory that creates a “service driven economy.”   The entire interview is well worth watching:

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Appearing on Fox News, Venture Capital Chairman Kevin O’Leary outline the anticipated impact of RFK Jr. as HHS secretary on businesses, President Trump’s plan to reducing government costs via Elon Musk, and what to expect with Doug Burgum as interior secretary.  WATCH:

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Businessman Chris Wright is the CEO of oilfield services group Liberty Energy.  Wright helped launch the American Shale Revolution of the mid-2000s that significantly increased US production of oil and natural gas.

President Trump has announced the nomination of Chris Wright to be Secretary of Energy.

[SOURCE]

“The Council of National Energy will consist of all Departments and Agencies involved in the permitting, production, generation, distribution, regulation, transportation, of ALL forms of American Energy. This Council will oversee the path to U.S. ENERGY DOMINANCE by cutting red tape, enhancing private sector investments across all sectors of the Economy, and by focusing on INNOVATION over longstanding, but totally unnecessary, regulation,” Trump said Friday.

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Responding to reporters’ questions, today President of the European Union commission Ursula von der Leyen congratulated Donald Trump then immediately began the framework to explain EU background discussions in economic terms. “We still get a lot of [liquified natural gas] from Russia, and why not replace it by American LNG, which is cheaper for us and brings down our energy prices,” said Ursula von der Leyen.

The EU realizes the seismic shift that is upon them as a result of the U.S. election.  Everything from the Ukraine-Russia war; the economics of energy which President Trump will use in negotiations for peace; to the factual lowered prices within the EU created by Joe Biden energy policy to punish Americans; to funding for NATO in combination with the potential for the end of the Marshal Plan one-way tariffs are looming.  President von der Leyen is in a very precarious position.

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Ursula was speaking from ¹Budapest, Hungary.

While many are interpreting her remarks about purchasing LNG to be snuggling up to President Trump, factually it is a much bigger problem than western media will openly discuss.

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Currently leading by 5 points in both Nevada and Arizona, President Donald Trump is on pace to win every battleground state in the 2024 election.

The states of Wisconsin, Pennsylvania and Michigan, previously labeled the “blue wall,” have been called for President Trump.  These three states are where James Clyburn spent most of his time on the ballot initiatives.  However, most of the critical regional ¹ballot printing operations were defeated.

Last night, President Trump secured Georgia and North Carolina.  President Trump is on pace to have shattered every battleground state result and achieve 312 electoral votes.  A resounding victory.

[Interactive Map Here]

(Via Politico) – Donald Trump won Michigan, once again turning the state red just four years after his defeat in 2020.

Both candidates spent a number of their final days in the Great Lakes State as polls projected a race hanging on a knife’s edge. Both Trump and Kamala Harris emphasized manufacturing and the economy in their visits, addressing voters’ worries about lingering post-pandemic inflation — a chief concern that bolstered the former president’s appeal.

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The leaders of the European Union are nervous about President Trump: (1) ending the war in Ukraine, and then (2) ending the Marshal Plan, thereby taxing their exports to the U.S as Trump demands tariff reciprocity; and lastly (3) forcing them to pay for their previous NATO commitments.

Brussels has set up a defensive office within the EU bureaucracy called “The Trump Task Force.”

BRUSSELS — Top European Union officials have met with the bloc’s ambassadors to talk through what it would mean if Donald Trump wins the U.S. election, 12 EU diplomats told POLITICO.

“They’re worried about trade but mostly [about] Ukraine,” one of the diplomats said, adding that Brussels foresees “abrupt changes on U.S. policy even before the inauguration.” The diplomat, like others quoted in this piece, was granted anonymity to speak candidly.

The conversations revolved around two areas of uncertainty should the Republican candidate reclaim the White House: Whether Washington would continue to support Ukraine and the prospect of higher U.S. tariffs for all incoming goods.

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Go ahead and make some money.  Elevator Speech: “MAGAnomics is essentially ‘inverse BRICS.'”

Everyone who is a pragmatic critical thinker knows that China will: subsidize their targeted sectors and devalue their currency to lower the tariff impact of exports to the USA. Beijing controls the banks, and they did this before.

As a result, the dollar value increases and imports cost less.

The Chinese imports then enter the USA at a lower price consistent with Beijing’s cost estimate as a tariff offset.  Chinese actuaries are really good at this. China takes in a lower price but retains access to the USA market. That’s just how it works.  The importers pay the tariff with a lowered price with a higher valued dollar. Essentially stasis is achieved in a stand-off.

Then…..

EU industrial products to Chinese manufacturing plants start to contract due to China’s aggressive cost cutting initiatives. The EU gets angry about the impact to their economy and looks for alternatives.  The EU then follows the same path as China and devalues their central bank currency; further pressuring the dollar to an upward price.

Exports to the EU are now more expensive, but imports from the EU to the USA are now cheaper. Again, the EU goal is stasis.

Both scenarios create cheaper USA imports despite the Trump tariffs. However, on the EU side President Trump then ends the Marshal plan and executes a program of “tariff reciprocity” against the EU.  More frustration and gritted teeth by Brussels.

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