White House economic advisor Larry Kudlow made some news yesterday when he said he would like to see the Fed cut interest rates by half a point (.50%).  Director Kudlow then appeared on CNBC for a discussion of the economy and the United States’ ongoing trade discussions with China and Mexico.
The larger story is actually about the current state of the U.S. economy as Trump’s policies influence direct investment and re-establish a middle-class durable goods manufacturing sector. WATCH:

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In essence we are in that economic space where Trump has de-emphasized the Wall Street economy (multinational corps, investments and financials) and re-emphasized the Main Street economy (manufacturing, blue collar jobs).  The new trade deals represent an unusual economic paradox for Wall St.  National corporations thrive; however multinational corporations and their investment instruments can simultaneously suffer.
We can tell we are in the space between both of these economies, because actions by the Fed are having no impact on inflation.  Consumer prices are returning back to their natural dynamic.  I’m reposting an article below from December 2016, right after the 2016 election, because this odd economic landscape -while new- was entirely predictable.  I called it the “Third Dimension in American Economics“.
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President Trump holds a mini press conference with Small Business Administration head Linda McMahon to announce her departure.  During the presser President Trump also answers questions on a variety of current events. [Video and Transcript Below]

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[Transcript] Mar-a-Lago – Palm Beach, Florida, – 4:17 P.M. EDT
THE PRESIDENT: Well, thank you very much. Linda McMahon has done an incredible job as the head of the Small Business Administration. She has been a superstar. The fact is that I’ve known her for a long time. I knew she was good, but I didn’t know she was that good. She has been one of our all-time favorites. It was just so smooth. She’s helped so many people in the world of small business.
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Find another winnamin. This MAGAnomic win is quiet, but bigly.
The United States Court of International Trade (full pdf below) has rebuked a global industry challenge to President Trump’s Steel and Aluminum tariffs.
The court told the multinational trade association they lacked any authority to override the sovereign authority of President Trump, and his absolute right to apply a national security (section 232) declaration to protect the U.S. Steel and Aluminum industry.  Whoops…

(WASHINGTON DC) The Court of International Trade, the body that hears constitutional challenges to federal trade policy, rejected an effort to overturn President Trump’s 25 percent tariffs on steel imports on Monday.
The American Institute for International Steel, a trade association, had sued the administration, arguing that the president exceeded his authority when he claimed last year that the tariff was justified under Section 232 of the Trade Expansion Act, which involves protecting “national security.” The court said Monday that it lacked the authority to second-guess the president’s decision.

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Something slightly delayed next week’s schedule by a few days.  Quite possibly the issue with the “Sanctions”, discussed yesterday.  However, that said, the next two face-to-face discussions between USTR Lighthizer and Vice Premier Liu He have been scheduled.

Statement from the Press Secretary – At the direction of President Donald J. Trump, United States Trade Representative Robert Lighthizer and Secretary of the Treasury Steven Mnuchin will travel to Beijing, China, for principal-level meetings starting on March 28, 2019, to continue negotiations aimed at improving the trade relationship between the United States and China.

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Yesterday the U.S. Treasury announced sanctions against two Chinese shipping firms for violating ongoing sanctions against North Korea [TREASURY HERE].
With USTR Robert Lighthizer and Secretary Mnuchin set to travel this weekend to Beijing for ongoing trade discussion, the sanction timing complicates the dance with the dragon. Subsequently President Trump sends the following tweet:

Slamming China with sanctions (over DPRK dragon activity) while Beijing is showing the Panda mask (during Beijing trade negotiations) is not wise. If the Panda mask drops during trade negotiations to reveal the Dragon face, then ok. However, the majority of the West, driven by a misunderstanding of the China-DPRK relationship, does not know how directly a manipulative Beijing controls Pyongyang.
Taking aggressive sanction action against China could backfire with Beijing ordering those around Chairman Kim to test a missile.
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Shortly before the president signed an executive order on affirming first amendment rights on college campuses yesterday, President Trump sat down for an extensive interview with Maria Bartiromo.
The interview covers a wide range of topics with a primary focus on the U.S. economy, ongoing trade discussions and issues that impact the U.S. workforce. One of the granular issues that surfaces is a subject we discuss frequently, the value of the ‘chicken tax‘; the 25% tariff on imported trucks and SUV’s.   WATCH:

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Earlier this afternoon President Donald Trump delivered a speech in Lima, Ohio, at an Army tank plant.  The overall speech held a jobs and economic focus highlighting a strong U.S. economy that continues to expand.
Within the remarks President Trump mixed in a wide variety of current event topics including U.S. military success against ISIS; and the need for GM and the UAW to come to terms, then sell or re-lease the Lordstown, Ohio, auto plant.

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UPDATE Transcript Added – [Transcript] – 3:15 P.M. EDT – AUDIENCE: USA! USA! USA! (Applause.)
THE PRESIDENT: Well, you better love me; I kept this place open, that I can tell you. (Applause.) They said, “We’re closing it.” And I said, “No, we’re not.” And now you’re doing record business. The job you do is incredible. And I’m thrilled to be here in Ohio with the hardworking men and women of Lima. (Applause.)
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Oh dear, this doesn’t bode well for those who are concerned about U.S. imposed 20% auto tariffs on EU, mostly German, automobiles.  [NOTE: Pay attention to the timing here as it relates to Nord Stream 2] Germany’s chancellor Angela Merkel has announced she will no longer uphold her prior agreement for NATO military spending.

At the 2014 NATO meeting in Wales, all NATO members agreed they would immediately begin a process to increase their military spending to two percent of GDP.  However, over time, and in direct contravention to the purpose of the effort, Germany (Merkel) began secretly working behind the scenes with Russia (Putin) on the Nord Stream II gas pipeline.
The Nord Stream 2 pipeline delivers natural gas from Russia to Germany.  That pipeline is expected to go on-line this November, 2019.  Today, Angela Merkel announces she will no longer uphold Germany’s financial commitments to NATO. These two issues are directly related.  It now looks like Merkel made a back-door agreement with Russia on NATO.

(Via Daily Mail) Germany’s military spending is set to fall below its NATO targets, in the latest flashpoint in Berlin’s long-running row with Washington.
The latest German budget plans, revealed on Monday, will see defence spending drop well below the two per cent of GDP expected from NATO members.
U.S. ambassador Richard Grenell said the cuts were a ‘worrisome signal’, while President Donald Trump has repeatedly accused Germany of freeloading on U.S. military might.

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LOL, an interesting albeit typically lighthearted discussion with CEA Chairman Kevin Hassett on the budget proposal and status of U.S.T.R trade talks with China.

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Calling attention to the brutally obvious is a key element to President Trump’s use of Twitter.  In this example President Trump (the business executive) highlights how GM is shutting an Ohio auto-plant at the same time multiple auto manufacturers are expanding operations in the U.S.

President Trump is 100% correct.  In just the past few months, specifically as an outcome of the USMCA, six auto companies have decided to massively expand U.S. operations and spend over $20 billion on auto-manufacturing investments in the U.S.
It makes no sense for an existing auto plant to sit idle.  Come to terms with the UAW; make a good deal that helps membership and incentivizes ownership; sell the facility to a new group expanding U.S. investment; retool, and get people back to work.   Consider:
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