President Trump holds an interview with Fox Business News’ Blake Burman. The president hits on a variety of current headlines including ongoing COVID-19 mitigation, a potential fourth round of stimulus, the nonsensical Russia conspiracy nonsense and the 2020 election campaign.
During an interview with Fox Business’ Maria Bartiromo, Commerce Secretary Wilbur Ross notes that companies with headquarters in Hong Kong are likely to rethink those offices with China now taking control under Beijing’s sweeping new security law.
This is a significant statement and underpins the U.S. strategy that is dismantling the Chinese influence on global trade and manufacturing. As Secretary Ross noted: “I believe that there’s a good chance that all companies who have Hong Kong as their headquarters for Asia will begin rethink whether the new rules – the new relationship between Hong Kong and mainland China – whether those rules let Hong Kong be as favorable a place to have headquarters as it used to be.” WATCH (listen closely):
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There is a deliberate and blunt focus in the statements by Ross that will have a significant impact. Globally the world needs to accept the future of Hong Kong as a communist state, and disavow the notion of any semblance of an autonomous region. Secretary Ross just threw a bucket of cold water in the face of those who refuse to accept the reality as it exists.
Today the Federal Communications Commission (FCC) formally designated Chinese’s Huawei Technologies Co and ZTE Corp as posing as posing national security threats to the United States. This designation and declaration blocks U.S. firms from tapping an $8.3 billion government fund to purchase equipment from either company.
This is an important step toward eliminating Huawei 5G data risks within U.S. telecommunication networks. Additionally, the designation will have the forward impact of restricting U.S. allies from linking networks if they use Huawei/ZTE components.
In a statement earlier today, Commerce Secretary Wilbur Ross has announced the U.S. is revoking the special trade status of Hong Kong in response to escalating encroachment by China in violation of the prior agreement for autonomy.
It is a challenging status to modify because the administration does not want to reduce the ability of Hong Kong to operate as an autonomous economic region. However, at the same time Beijing is taking control of all systems within Hong Kong and as such policies must be adjusted. It would be an exercise in futility to expect China to retreat.
WILBUR ROSS – “With the Chinese Communist Party’s imposition of new security measures on Hong Kong, the risk that sensitive U.S. technology will be diverted to the People’s Liberation Army or Ministry of State Security has increased, all while undermining the territory’s autonomy. Those are risks the U.S. refuses to accept and have resulted in the revocation of Hong Kong’s special status.”
Commerce Secretary Wilbur Ross appears on Fox News with Stuart Varney to discuss a change in federal hiring policy. However, within the interview Ross notes some key economic data that has a very solid predictor value for economic growth.
Both the spending rates and the savings rates for Americans are at all time highs. The COVID-19 lockdown has limited purchase options, leading to less initial spending; however, consumers have a lot of recent cash reserve as shown in their rate of savings.
Ross is right, within this dynamic, as soon as economic limits are removed, the spending will boost the economy very quickly.
Jumpin’ ju-ju bones… New home sales jumped a whopping 16.6% in May, blowing past the estimates of a 2.9% rise. The May increase in sales is nearly 13 percent higher than the same month one year ago.
Home sales are a key indicator of economic health because purchases of homes requires (1) income, a stable job; and (2) an optimistic financial outlook from the buyer.
Sales of new single-family homes jumped 16.6% in May from April, to a seasonally adjusted annualized pace of 676,000, the Census Bureau reported Tuesday. The median economist estimate was for 640,000, according to Bloomberg data.
In addition to a larger-than-expected monthly surge, May sales were nearly 13% higher than a year ago. As the US economy reopens, people are flocking back to the housing market in droves — the rosy sales are a rebound from three months of declines ending in April. (LINK)
In the economic balancing act toward China Larry Kudlow represents the good cop, Peter Navarro represents the bad cop and President Trump navigates the market responses. Neither person is factually in conflict with the other; the nuance is in the expression and each person has a role to play. Sometimes teeth, sometimes not. It depends on need.
Last night trade advisor Peter Navarro noted the U.S. position with China and trade is still in a state of serious conflict. This is accurate, and a more confrontational posture has been expressed by President Trump. Today Larry Kudlow moderates the Navarro position to lessen the Wall St. concern over a looming decoupling. It’s all a dance.
The need for nuance becomes clear as we watch Stuart Varney pushing the Wall Street concern angle on behalf of U.S. multinationals. The administration does not want to spook the stock market while they deal with a China confrontation. WATCH:
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Kudlow represents the panda mask. Navarro represents the eagles claw. President Trump advances or retracts each position as he controls the market response. The objective is a slow, steady, smiling decoupling that doesn’t unnerve anyone… but the direction is always toward the decoupling.
President Trump is delivering the proverbial economic death by a thousand paper cuts.
White House Trade Policy Advisor Peter Navarro outlines what many CTH readers are aware of. John Bolton begged for the job and enlisted Sean Hannity and Mark Levin to get advanced recommendations. That’s how he got in. However, as National Security Advisor John Bolton never understood the President Trump doctrine, using economics to achieve national security objectives. Underline it, highlight it, that’s the primary issue.
In this interview Navarro goes full wolverine on Bolton, and deservedly so. What Navarro outlines is the truthful reality. You can tell because it aligns at every level with what we watched every day while John Bolton was in the administration. God bless Navarro for truthfully calling the baby ugly. WATCH:
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John Bolton felt unimportant in the world of geopolitics because President Trump relied on the economic team of Secretary Mnuchin, Secretary Ross, USTR Lighthizer and Trade Advisor Peter Navarro to achieve national security objectives.
Bolton was the knuckledragger at the end of the table, useful as leverage, where Trump could point to him and say lets make a deal to keep the warmongers like this guy out of the picture. Bolton’s biggest problem was with that Trump doctrine.
This hearing might be a little too wonky for some, but not too many other policy issues touch 100% of American lives. U.S. Trade Representative Robert Lighthizer will be delivering testimony today outlining the 2020 trade policy agenda.
The testimony is before the House Ways and Means Committee, and will be livestreamed on the committee website [SEE HERE] and below at 10:00am ET from the Longworth House Office Building. USTR Lighthizer is the sole witness.
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Lighthizer will also be testifying to the Senate Finance Committee at 3:00pm. [LINK]
