After President Trump had a direct telephone call with Chinese Chairman Xi Jinping, President Trump announced from the Oval Office that Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer would meet with their counterparts from China again, only this time Bessent and Greer will be accompanied by Commerce Secretary Howard Lutnick.

President Trump repeated the same announcement via Truth Social:  “I am pleased to announce that Secretary of the Treasury Scott Bessent, Secretary of Commerce Howard Lutnick, and United States Trade Representative, Ambassador Jamieson Greer, will be meeting in London on Monday, June 9, 2025, with Representatives of China, with reference to the Trade Deal. The meeting should go very well. Thank you for your attention to this matter!”

While each of the trade Wolverines have teeth, Howard Lutnick is the enforcer. The issue surrounds prior promises made in Geneva to Bessent and Greer on the continuation of mined and refined rare earth minerals from China needed in batteries.

The addition of Lutnick is akin to President Trump saying, go ahead and make the promise again – only this time Lutnick will be there to spell out the consequences of inaction.

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Next week on Thursday, German Chancellor Friedrich Merz is scheduled to travel to Washington DC and meet with President Donald Trump in the White House.  Considering the importance of Germany to the EU economy and subsequent trade relationship with the U.S, this meeting with Merz will likely be the most important discussion toward a possible U.S-E.U. trade agreement.

Germany is the largest economy within the EU and the core industrial base of the European Union.  The number one issue for the German people is their economic status: everything else circles around this priority.

Having spent time in Hamburg, Bremen, Dresden and Frankfurt, it is very clear to me the German people are very focused on work and their vocations. Germans overall, take their economic standing very personally and seriously.

Inasmuch as Merz may have to represent the interests of the larger EU in his approach, he will undoubtedly be focused on what is in Germany’s best interest, with all else second.

For President Trump this specific German interest creates a unique facet of leverage within the larger EU trade discussion.  Because the German economy is so vital, whatever terms Germany decides are the core terms the EU will manifest in their trade and tariff negotiations.

I predict we will hear a talking point from Merz, in generally German snark, something akin to a proposal for a zero-tariff base on the import and export of heavy industrial goods (machinery) for both Germany and the USA.  I say in general German snark because passive-aggressive Chancellor Merz knows the U.S. is currently not in a position to sell Germany heavy industrial goods, and that’s entirely what President Trump is trying to recreate with the trade/tariff policy.

WASHINGTON DC – German Chancellor Friedrich Merz will travel to Washington next week to meet United States President Donald Trump for the first time since taking office earlier this month.

The leaders will meet in the White House on Thursday and are expected to discuss the war in Ukraine, the Middle East and trade policy, German government spokesperson Stefan Kornelius said in an emailed statement.

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The current Canadian Prime Minister is genuinely a walking meme of a Canadian Prime Minister parody.

During his remarks to parliament today, Prime Minister Carney waxed gleefully about the U.S. federal trade court ruling against President Trump’s tariffs, just moments before the federal appeals court stayed the opinion of the lower court.  It’s a little funny.

PM Carney doesn’t seem to recognize the reality of the economic landscape before him.  He complains about blocked access to the U.S. consumer base with a level of entitlement that’s genuinely humorous.  Meanwhile, the Canadian economy around him is collapsing.  WATCH:

♦ BACKGROUND – Following the 2024 presidential election, Prime Minister Justin Trudeau traveled to Mar-a-Lago and said if President Trump was to make the Canadian government face reciprocal tariffs, open the USMCA trade agreements to force reciprocity, and/or balance economic relations on non-tariff issues, then Canada would collapse upon itself economically and cease to exist.  In essence, in addition to the NATO defense shortfall, Canada cannot survive as a free and independent north American nation, without receiving all the one-way benefits from the U.S. economy.

To wit, President Trump then said, if Canada cannot survive in a balanced rules environment, including putting together their own military and defenses and meeting their NATO obligations, then Canada should become the 51st U.S state.  It was following this meeting that President Trump started emphasizing this point and shocking everyone in the process.  However, in the emotional reaction to Trump’s statements, no-one looked at the core issues outlined by Trudeau that framed President Trump’s opinion.

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I’m sorry, but when I finally got around to review the appearance of King Charles in the Canadian Parliament, I could not get past the optics on display.

My background thoughts are HERE, but boy howdy does this picture encapsulate the dynamic.

[VIDEO IS HERE]

And yes, King Charles waxed eloquently in both French and English about the terrible issue that Canadian sovereignty is facing.

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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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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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President Trump is scheduled to announce the first negotiated trade deal in the global trade reset with the United States.  The deal is between the U.K and the USA, which is interesting as a UK free trade agreement was being worked on at the time COVID-19 hit in 2020.

Back in 2019 President Trump and then Commerce Secretary Wilbur Ross were working two strategic trade negotiations at the same time that never materialized. The first was an FTA with the U.K and the second was with the EU.  The nuance of the U.K deal was favorable and structurally aligned to create leverage against the EU negotiations. It will be interesting to see how this one is structured.

From President Trump this morning on Truth Social: “The agreement with the United Kingdom is a full and comprehensive one that will cement the relationship between the United States and the United Kingdom for many years to come. Because of our long time history and allegiance together, it is a great honor to have the United Kingdom as our FIRST announcement. Many other deals, which are in serious stages of negotiation, to follow!”

UPDATE: VIDEO ADDED

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I have watched it so many times and each time I have to pause it to stop laughing.  When you consider everything in the lead up to this event, this really is the best press availability ever.

At 29:37 of the video below, President Trump is asked:

MEDIA: “Is there anything the Prime Minister can say to you today to change your mind on tariffing Canada?” … “Is there anything he can say to you, in the course of your meeting today, that could get you to lift tariffs on Canada?”

TRUMP: “No.”

MEDIA: “Why not?”

TRUMP: “Just the way it is.”

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The last five minutes are so funny, so brutally honest, so genuinely instructive of the baseline from which all of the future trade aspects will take place, that it just makes you laugh at the simplicity of the problem that Canada faces. “We don’t really want cars from Canada,” in reality we don’t want anything from Canada…  lolol.

“Look, this is all friendly.” Carney is just sitting there, like a doofus.

Best President Ever!

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I don’t want to say ‘I toldya so’, but….  Listen carefully to the answer to the first question at (05:00 minute mark) as President Trump responds to the question about the USMCA with Canadian Prime Minister Mark Carney next to him.  The USMCA is “effective, and it’s still effective, but people have to follow it,” inferring the issues of Canada as a tool to avoid China tariffs, President Trump said.

Then comes the part everyone will overlook as President Trump notes, “as you know it terminates fairly shortly. It gets renegotiated fairly shortly.” Then comes the biggest statement, “this was a transitional deal, and we’ll see what happens, we’re going to start renegotiating that”… “I don’t know if it serves a purpose anymore.”  …. “And the biggest purpose it served was, we got rid of NAFTA.”  This presents the future of the USMCA and specifically the U.S-Canada aspect to the trade deal exactly as we anticipated.

President Trump is going to exit the trilateral USMCA in favor of two distinctly different bilateral trade agreements between the U.S and Mexico; and the U.S and Canada.  The only consideration now is the timing.  President Trump is 100% focused on the BIG ECONOMIC PICTURE; it’s not about the politics, it’s all about the economics. [Also pay attention to USTR Jamieson Greer]  WATCH:

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Prime Minister Mark Carney knows what is coming. His response about stepping up their military spending to meet NATO obligations is part of that dynamic.

The 51st state remarks were all about getting Canada into a position where Trump is about to open up two distinctly different bilateral trade agreements.  The relationship that Canada has with China is a major risk to Carney’s position.  Canada doesn’t stand a chance.  In essence, at the end of this journey of economics North American trade is going to be entirely different.

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In a decision to position for long-term tariff avoidance, Mercedes Benz will shift production of their GLC (compact SUV) to Tuscaloosa, Alabama, away from Bremen, Germany.

Previously, the German automaker had shifted manufacturing of large SUV lines to the USA to avoid the pre-existing 25% ‘chicken tax.’  However, the smaller and less expensive crossover types were still made in Germany and shipped to the USA.  As the shipping vessels returned to Germany, they would take some of the SUV inventory back with them.  It was the most cost-effective solution, given the nature of the tariff situation.

Now, with larger import tariffs against all vehicles, Mercedes has shifted their business model to essentially an outcome where all USA marketed/sold vehicles will be manufactured in the USA, and all EU marketed/sold vehicles will be manufactured in Germany.

(Via Daily Mail) – Mercedes-Benz will shift production of one of its vehicles to Tuscaloosa, Alabama by 2027. The German luxury carmaker’s move is the latest response from an industry caught in the expensive crosshairs of President Donald Trump’s 25 percent tariffs.

The decision marks a potential win for Trump’s protectionist trade agenda, which aims to boost US manufacturing by slapping steep tariffs on foreign-made goods. But there are many complicating factors.

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