Generally speaking the corporate media have yet to have an honest outline about the fatal flaw within NAFTA that allows China, ASEAN nations and the EU to exploit previous investments in Canada and Mexico as a back-door to the U.S. market.

In a generalized aspect, the recent visit of top U.S. trade and economic policymakers to China was part of Trump’s exploration into the larger dynamic of bi-lateral trade between the U.S. and China knowing full well the NAFTA flaw remains unaddressed.  Without addressing the loop-hole (aka ‘fatal flaw’) any modernized NAFTA deal is moot; and by extension the foundation for any future trade deal between the U.S. and China is too byzantine to manage.

It is in China and the EU’s interests to continue exploiting the NAFTA access.  It is in Canada and Mexico’s interests to retain the subsequent investment influx.

It is in multinational corporate and Wall Street interests to continue the scheme. However, it is also entirely against U.S. Main Street interests.  Hence, NAFTA loggerheads reigns supreme; and in my opinion, we are soon to see President Trump cut the Gordian knot.

WASHINGTON (Reuters) – Senior Canadian, U.S. and Mexican officials trying to rescue slow-moving talks to update the NAFTA trade pact met on Monday in a new bid to resolve key issues before regional elections complicate the process.

With time fast running out to strike some kind of deal on the North American Free Trade Agreement, the three member nations are still far apart on major points.

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President Trump’s MAGAnomic team have announced a 30-day extension for the Steel (25%) and Aluminum (10%) tariffs for the European Union, Canada and Mexico.

Also, after a prior agreement with South-Korea, the “KORUS” deal, team U.S.A. has also reached an agreement in principle with Australia, Argentina and Brazil which will be finalized in next 30 days.

Via Wall Street Journal – President Donald Trump has decided to postpone decisions about imposing steel and aluminum tariffs on the European Union and other U.S. allies until June 1, a senior administration official said.

In addition to announcing the delay, the White House is expected to say Monday evening that it has finalized a deal to exempt South Korea from the tariffs, mirroring details that have been previously released by the U.S. Trade Representative’s office.

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In retaliation for $50 billion in U.S. trade tariffs against Chinese imports, China laughably hits back with $3 their own billion tariffs against the U.S.  According to most reporting Beijing has selected U.S. pork and scrap aluminum as targets for a 25% tariff, along with wine and fruit tariffs around 15%.

It should be emphasized the approach by China is rather ridiculous considering the Chinese government purchased the largest U.S. pork manufacturer Smithfield in 2013 for $5 billion; at the time the purchase price was 30% more than the company was worth.  Smithfield, now a Chinese company, represents 25% of all U.S. pork products.

Do you really think China is going to not import it’s own pork products… or subject them to a domestic tax?  Think about it.  It’s ridiculous.  China knows they have ZERO leverage in a trade-dispute with the U.S., they cannot afford to lose access to the U.S. market.

The example of Smithfield foods is exactly what we have outlined in how China cannot sustain itself and needs to control the assets of foreign countries.  Hence, their one-road/one-belt program for securing products and raw materials.  China is a dependent economy, they need to exploit global trade to survive.  China cannot feed itself. This is the inherent flaw within their short-sighted authoritarian government-controlled economic model.

Again, for emphasis, the Chinese government underwrote the purchase of Smithfield foods in 2013.  They paid 30% more than the company was worth because they were securing access to food just like they would any other raw material (uranium, minerals, etc).  China also purchases U.S. politicians to retain their ability in this regard.

Now look at the cartoon from the unofficial Chinese state-run media today:

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National Trade Council Director Peter Navarro appeared on CNBC, prior to today’s massive U.S. stock market increase, to discuss ongoing trade initiatives.

U.S.T.R. Robert Lighthizer is currently conducting simultaneous bilateral trade negotiations with South Korea, Philippines, Vietnam, Australia, China (way-points), Japan, Mexico/Canada (NAFTA) and the European Union.

Trade talks going on with numerous countries that, for many years, have not treated the United States fairly. In the end, all will be happy!

— Donald J. Trump (@realDonaldTrump) March 27, 2018

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The passage of the defense spending portion of the Omnibus bill ultimately means there will be increased demand for U.S. steel and aluminum within new defense equipment. The contracts within the procurement process will predictably require the use of U.S. parts.

Add the increase in defense spending with the pending global tariffs on steel imports, and the environment is created for foreign investment in domestic steel and metal manufacturing…. Then add into the mix the geopolitical economic relationship developed between India’s Prime Minister Modi and President Trump… And you discover the backdrop for this announcement from India owned JSW Steel:

(Reuters) – India’s JSW Steel Ltd said on Monday it would spend $500 million to build out its U.S. operations in Texas, amid heightened global trade tensions following U.S President Donald Trump’s decision to pursue steep import tariffs.

The company has signed an agreement with the Texas governor’s office, under which the governor has approved a grant worth $3.4 million to the company’s unit, the steelmaker said in a statement here.

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Perhaps as early as this week we should anticipate hearing about completion a significant trade agreement with South Korea.  The deal is known as “KORUS” (KOR+U.S.), and has been in negotiations for over a year.

Part of the recent agreement within the auto-sector of the deal, between Moon Jae-in and President Donald Trump, via Lighthizer and Ross, is an exemption of U.S. steel tariffs for South Korea in exchange for a doubling of U.S. auto exports; from 25,000 to 50,000 American made cars, per U.S. automaker, per year.  (link)

The results within KORUS exhibit the intended outcome of the global tariff proposal from President Trump as leverage to enhance the administration policy of reciprocity.  The world is taking notice, and China is now beginning to signal their understanding of President Trump leading the international discussion of reciprocal trade.

The unspoken background is that all nations, who have acquiesced to the overwhelming demands of China’s trade position, are now beginning to reassess the value of President Trump confronting the equation head-on.  Ultimately it is beginning to sink-in that all nations can benefit from correcting a trade imbalance within their own position.  In essence, U.S. President Trump is moving the entire global trade dynamic.

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Author of “The Coming Collapse of China”, Gordon Chang, discusses the effect of President Trump’s tariffs on China and the epic battle ahead.  Last night China announced their feeble retaliatory actions – SEE HERE.  A professionally nervous Maria Bartiromo, frames a series of questions from the perspective of Wall Street.

Fortunately Gordon Chang understands the Red Dragon, and more importantly understands Chinese Chairman Xi Jinping’s geopolitical goals through economic conquest. Mr. Chang is one of the few people who appear regularly in media and know the truth behind the Panda Mask.

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People often talk about the ‘strength’ of China’s economic model; and indeed within a specific part of their economy -manufacturing- they do have economic strength.

However, the underlying critical architecture of the Chinese economic model is structurally flawed and President Trump with his current economic team understand the weakness better than all international adversaries.

China is a central planning economy.  Meaning it never was an outcropping of natural economic conditions.  China was/is controlled as a communist style central-planning government; As such, it is important to reference the basic structural reality that China’s economy was created from the top down.

This construct of government creation is a key big picture distinction that sets the backdrop to understand how weak the economy really is.

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It is going to take a heck of a lot of deep-weed education to cut through the economic gaslighting of the multinational corporations, Wall Street and their purchased institutional media.  However, I give the White House team (Secretary Ross, Secretary Mnuchin, Ambassador Lighthizer and Adviser Peter Navarro) a measure of strong credit for beginning:

WHITE HOUSE:  Measurement of trade flows is usually an uncontroversial topic relegated to macroeconomic classrooms and government technocrats. Recent debates about trade policy have brought the topic out of the shadows, and we hope to clarify how economists measure trade.

Every day there are international transactions for tens of thousands of different products. Physical goods, interchangeably called merchandise, are what usually comes to mind first. However, an increasing share of international trade is in services that are not physically transported between countries—think about financial insurance, licensing of trademarks, or services like consulting.

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Leo Gerard, the President of the United Steelworkers Union, talks to a very frustrated Chuck Todd about the effect of President Trump’s new tariffs and his appreciation therein.

Chuck Todd has all his Media Matters talking points prepared to outline his narrative; however, unfortunately for the toad, he came up against a very knowledgeable union leader with a solid grasp of the details and important specifics.  WATCH:

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As you can see from President Leo Gerard’s comments he well understands the value of Commerce Secretary Wilbur Ross, U.S. Trade Ambassador Robert Lighthizer and administration trade strategist Peter Navarro. The next phase of MAGAnomic Main Street trade initiatives involves global “trade reciprocity” advancement.

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Commerce Secretary Wilbur Ross appears for an interview with Trish Regan immediately after President Trump signed the Presidential Proclamation to advance Steel and Aluminum tariffs to protect and expand American industry. [DEEP DIVE]

Ms. Regan is one of the financial business analysts who have slowly evolved away from the insufferable Wall Street/U.S. Chamber of Commerce ‘globalist’ viewpoints, which was/is entirely built upon a false premise.  Thankfully Ms. Regan joins the ranks of economic patriots Charles Payne and Lou Dobbs.  We’ll keep working on Maria Bartiromo.

In this interview Secretary Ross elevates the discussion beyond just Steel and Aluminum and begins to expand -and emphasize- the perimeter of an entirely new American approach toward trade, “reciprocity“.  Indeed for the very first time in this interview Secretary Ross gives a preview into what will follow and how ‘reciprocity’ will be applied.

“President Trump is taking action today to protect both our national security and industries critical to our economy. The President’s decision regarding the steel and aluminum Section 232 reports are the result of a long and well-thought-out process led by the Commerce Department. Once again, President Trump is keeping his promises and standing up for American families, American businesses, and American workers.”  ~ Commerce Secretary Wilbur Ross

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