Elections have consequences.  On the same day the U.S. economy reports astoundingly successful jobs growth of 266,000 jobs and a drop in the unemployment rate to 3.5 percent; the Canadian state economic minister reports surprisingly terrible jobs losses of 72,200 jobs and a jump in unemployment from 5.5 to 5.9 percent.
The Canadian economy is roughly one-tenth the size of the U.S. So in equivalent terms the results from Canada reflect a comparative loss of 720,000 jobs on the same day the U.S. revises all figures upward to over 300,000 gains.  A stunning economic contrast:

OTTAWA (Reuters) – The Canadian job market lost a surprise 71,200 net positions in November while the unemployment rate rose to 5.9%, the highest in more than a year, data showed on Friday, as analysts said a repeat of the weak numbers could force the Bank of Canada to rethink its monetary policy.
Analysts in a Reuters poll had forecast a gain of 10,000 jobs and had predicted the unemployment rate would hold steady at 5.5%. […] November’s numbers followed a weak report in October, when the labor market unexpectedly shed jobs despite a likely boost from hiring related to the federal election.

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National Economic Council Director Larry Kudlow appears on Fox Business news to discuss the November jobs report, economic growth and the China trade discussions.
Kudlow highlights the primary point that President Trump has reestablished Main Street USA as the primary focus of policy.  U.S. companies invested in the U.S. economy are doing exceptionally well and receiving the majority benefit.  U.S. multinational companies who are invested overseas are not benefiting as much.  Wall St -vs- Main Street.

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Director Kudlow is correct, if the House can ratify the USMCA trade deal, North America will see a massive influx of investment.
In essence Titan Trump is winning the economic battle by: (a) repatriating wealth (trade policy); (b) blocking exfiltration (main street policy); (c) creating new and modern economic alliances based on reciprocity (bilateral deals); and (d) dismantling the post WWII Marshal plan of global trade and one-way tariffs (de-globalization).
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In the second bilateral NATO meeting of the day, U.S. President Donald Trump and Canadian Prime Minister Justin Trudeau hold a joint press availability.
Unfortunately for U.S-Canada relations, at the conclusion of their bilat Trudeau went to a NATO reception at No. 10 Downing Street and was caught on mic disparaging President Trump with French President Emmanuel Macron. [Video and Transcript Below]

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[Transcript] – PRESIDENT TRUMP: Well, thank you very much, everybody. A question was asked just a little while ago about supporting the people protesting in Iran and are going through a very tough period. And we do support them totally and have supported them from the beginning.
The question was asked: “Do we support them” — I thought — “financially?” And we haven’t supported them. I don’t know that we’ve ever been actually asked to support them, financially. And I — you know, if somebody asked, maybe we would. But we support them very, very seriously. The people that are protesting in Iran, they’re looking for their freedom, and we are fully in support of them.
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Commerce Secretary Wilbur Ross appeared on CNBC earlier today to discuss the status of U.S-China trade discussions, the latest issues with tariffs on French goods, and the bigger picture issues within the EU that we previously discussed.
Ross highlights the additional tariffs on China scheduled for December 15th are currently still planned to take effect unless something substantial changes in the position of China.  Additionally, and interestingly on the French and EU tariffs, Secretary Ross reminds the financial pundits of the $7.5 billion WTO authorized award against the EU that would be in addition to the $2.4 billion in tariffs now scheduled for French products.

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Pay attention to what Ross says in that interview; the administration is being remarkably open and consistent.  Given the adversarial position exhibited by French President Emmanuel Macron today; and against the backdrop of continual EU intransigence on trade reciprocity; I suspect once the USMCA is passed we are going to see a *severe* shift in tone within the U.S. trade position toward both China and the EU.
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Given the background activity last week between USTR Robert Lighthizer and Mexican Trade Minister Jesus Seade, and their agreement to set up a trilateral trade and labor dispute panel, President Trump now puts Speaker Pelosi in “check”….

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Having lost her labor defense shield (well played by Lighthizer/Seade), Pelosi is now either going to stand her party against the majority of Americans as President Trump pummels them over it… Or she puts the USMCA up for ratification (Trump wins) and it looks like she takes a knee….  Well played by President Trump.
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President Trump has said he is close to a decision that would designate Mexican drug cartels as officially recognized terrorist networks by the United States.

Remember, within the geopolitical dynamic that benefits all three North American countries, Mexico needs to start taking clear and decisive actions toward all levels of internal corruption if the ultimate economic objective of the USMCA is going to work.

Mexican President Lopez-Obrador is concerned this designation could lead to U.S. military engagement against the cartels.  The Democrats are concerned this designation would mean they could no longer accept campaign donations from the drug cartels; and into this mix of interests, U.S. Attorney Bill Barr is going to Mexico.

MEXICO CITY (Reuters) – Mexican President Andres Manuel Lopez Obrador said on Friday that his government was committed to fighting organized crime, seeking to dispel fears that the United States could take matters in its own hands in the fight against drug cartels.
U.S. President Donald Trump said earlier this week that he plans to designate the Mexican cartels as terrorist groups, a move aimed at disrupting their finances by imposing sanctions.
While this does not directly give the United States authority for military operations in Mexico, many Mexicans are nervous their northern neighbor could use it as a pretext for a unilateral invention.

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The act that President Trump signed today is a law that requires the U.S. to review all of the democracy issues within Hong Kong to assess whether any Chinese violations to Hong Kong autonomy are happening.  If so, the U.S. can take remedial steps to punish China.

The Hong Kong Human Rights and Democracy Act would require the State Department annually re-certify Hong Kong’s autonomous nature, in order for the so-called “special treatment” the U.S. affords Hong Kong to continue. (more)

Keep in mind a dual purpose to this latest move:  Hong Kong holds a special trade status with the U.S. and is exempt from tariffs placed on China.  Part of the punitive action President Trump could take against China involves tariffs against Hong Kong.

Today, I have signed into law S. 1838, the “Hong Kong Human Rights and Democracy Act of 2019” (the “Act”). The Act reaffirms and amends the United States-Hong Kong Policy Act of 1992, specifies United States policy towards Hong Kong, and directs assessment of the political developments in Hong Kong.
Certain provisions of the Act would interfere with the exercise of the President’s constitutional authority to state the foreign policy of the United States. My Administration will treat each of the provisions of the Act consistently with the President’s constitutional authorities with respect to foreign relations.
~  President Donald J Trump

Again, back to the big picture, is this an action that would indicate President Trump is actually looking for a U.S-China trade agreement?   Of course not.  So why now, what changed?…  The USMCA!   It’s all connected folks.

The New York Federal Reserve made a quiet admission two days ago that was missed by almost all financial media.  In the NY Fed economic blog they admitted everyone was wrong, President Trump’s 2017 tariffs against China did not lead to increased U.S. consumer prices [Read Here].  The Fed also said imports of the Chinese products affected by U.S. tariffs have fallen by an annualized $75 billion. That’s a huge chunk of business U.S. purchasers have shifted to Japan and other Southeast Asian countries.

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Within this dynamic lays the real reason why Beijing cannot wait for a 2020 election hoping that Biden or Bloomberg can stop their bleeding.  Before going into more depth, this brief explainer from Charles Payne will help establish a framework.  WATCH:
What Payne outlines is correct; however, the internal Chinese ‘tariff-offset’ dynamic is actually even a little deeper.  Overlaying the NY Fed research we can see that Beijing has attempted to offset the Trump tariffs in four majority ways:
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More signs the U.S. economy is very strong show up today as several key economic indicators defy prior economist predictions.   Staring with a significant upward revision by the Bureau of Economic Analysis for the third quarter GDP growth from 1.9% to 2.1%:

The revision to GDP reflected upward revisions to inventory investment, business investment, and consumer spending.
The increase in consumer spending reflected increases in both goods (notably recreational goods and vehicles as well as food and beverages) and in services (led by housing and utilities as well as food services). (link)

Additionally, the commerce department released data showing U.S. core capital goods orders increased 1.2% in November, the largest gain since January; and more data on home sales shows a whopping 31.6% increase year-over-year. 
U.S. consumers and home buyers are benefiting from low inflation and significant blue collar wage gains that are an outcome of a growing economy and a very strong jobs market.  The most significant wage growth is in non-supervisory positions.   The economic strength is broad-based and the U.S. middle-class is confident.
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Well, well, well….  FOX Business’ Maria Bartiromo announced this morning that her sources are saying a USMCA vote is possible next week.   This DC source reporting would align with our CTH spidey senses from the visible DC trade twitches.

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