White House Manufacturing Policy Advisor, Peter Navarro, appears on Fox Business with Charles Payne to discuss the ramification of China ‘phase-one’ and the USMCA for the middle-class blue-collar economy.  Excellent interview, WATCH:

(more…)

Excellent sales report from the Dept. of Commerce reflects a 5.8 percent increase year-over year for December 2019.  U.S. consumer sales drive two-thirds of GDP; the December result is another indicator the GDP growth in the fourth quarter will likely be much higher than expected.

(Via CNBC) […] The Commerce Department said on Thursday retail sales increased 0.3% last month. Data for November was revised up to show retail sales gaining 0.3% instead of rising 0.2% as previously reported. Economists polled by Reuters had forecast retail sales would gain 0.3% in December. Compared to December last year, retail sales accelerated 5.8%.

It is weird to see how CNBC takes the good news, cites the factual impact of retail sales on GDP, and then proclaims the economy is likely faltering.  What the heck?
(more…)

In advance of the Senate beginning the impeachment trial of President Trump, the upper chamber ratified the USMCA trade agreement with an 89-10 vote.  The agreement now moves to the White House where President Trump will sign it.

The final ratification is the result of two-years worth of renegotiated trade reform, and the outcome gained bipartisan support in both the House and Senate.  The only republican senator who voted against the deal was Pat Toomey of Pennsylvania who is concerned the USMCA will weaken the position of Wall Street multinationals.
Nine democrat senators did not support the agreement because there wasn’t enough verbiage to support their climate change priorities, and the USMCA does not align with the Paris Climate Accord.  [Vote Tally Here]

USMCA gives American producers better access to Canadian dairy markets, and creates a cornerstone for a revitalized U.S. manufacturing base.  The deal has much more strict rules of origination for the auto-sector with 75% of parts and materials must be made in north America.  Combined with the requirement that 40% of those industrial parts must come from plants where workers make a minimum of $16/hr, the U.S. auto-industry will gain significant benefits.
(more…)

Treasury Secretary Steven Mnuchin appeared on Fox News with Brett Baier for a more detailed discussion of the U.S-China ‘phase-one’ trade agreement.  Additionally, Secretary Mnuchin discussed the status of sanctions with Iran and his view on impeachment.

.
…and Brett Baier is a human cabbage patch doll.
(more…)

After the signing ceremony to celebrate a historic U.S-China ‘phase-one’ trade agreement, President Trump and the U.S. trade delegation hosted Vice-Premier Liu He and the Chinese delegation for a luncheon. [Video and Transcript Below]

.
[Transcript] – PRESIDENT TRUMP: I thought that we would do it the way other; that the more I thought about this, the better it is. It’s — you can get your arms around it better the way we’ve got it. I like it better the way we’ve done it.

I just want to say this is a great day for both China and the United States. This is an agreement that people have been talking about for 40 years and never were able to get even a piece of paper signed. And we never had an agreement. And this is going to be a great agreement for both countries. It’s far greater than $200 billion, and it’ll grow every year. It also unifies the countries.

(more…)

White House National Economic Council Director Larry Kudlow appears on FOX Business for his first interview since the signing of the U.S.-China trade deal.  Mr. Kudlow is optimistic but also shares notes of caution for the compliance and enforcement aspects.

.
In the background of the delegation it should be noted Chinese Chairman Xi Jinping sent a hard-line handler, Commerce Minister Zhong Shan, to accompany the more moderate Vice-Premier Liu He.  Zhong Shan was noted at the center of the signing ceremony and directly opposite Robert Lighthizer at the luncheon.
The two Beijing representatives highlight the ongoing Dragon -vs- Panda dynamic within China.
Internal to Chinese politics…. If the reformers are successful (Liu He) the compliance and enforcement mechanisms will succeed and ‘phase-one’ will lead to future negotiations.  However, if the hardliners block reform (Zhong Shan), then the compliance and enforcement mechanisms will fail and ‘phase-one’ becomes a dead end.
(more…)

Earlier today President Trump, together with his trade delegation and the delegation from China represented by Vice-Premier Liu He, signed a new, fully-enforceable Phase One Trade Agreement. This is the first ever trade agreement any nation has attempted to change the dynamic of how a free-market system (USA) can engage with the Communist system within China. [Video Below – Transcript ADDED]
While ‘phase-one‘ was structurally created to set the foundation, and test the principles of enforcement, this historic trade agreement will frame the text that all other free-market nations will follow in their own efforts to come to a substantive agreement with Beijing.
This is a really big deal on a worldwide scale of international commerce.  Structurally the biggest changes inside China relate to Intellectual Property protections, U.S. ownership of assets, and changes within the Chinese legal system to stop Forced Technology Transfer.
During the ceremonial remarks Vice-Premier Liu read a statement from Chinese Chairman Xi Jinping to commemorate this historic trade agreement.

.
[Transcript]  PRESIDENT TRUMP: Thank you very much. Please. We greatly appreciate your joining us at this White House event. This is a very important and remarkable occasion.

Today, we take a momentous step — one that has never been taken before with China — toward a future of fair and reciprocal trade, as we sign phase one of the historic trade deal between the United States and China. Together, we are righting the wrongs of the past and delivering a future of economic justice and security for American workers, farmers, and families.

(more…)

U.S. Treasury Secretary Steven Mnuchin appears on FOX Business to discuss the U.S-China ‘phase-one’ trade agreement, the benefits, enforcement mechanisms and retention of tariffs and particular sanctions until compliance can be reviewed.
Phase-1 establishes the baselines; resets the ability of U.S. companies to enter China; establishes rules for market entry; and sets the parameters for enforcement.  Any future phase is contingent upon evaluation of phase-one enforcement mechanisms.

(more…)

U.S. Trade Representative Robert Lighthizer is a smart, serious and deliberate professional on a very specific and important mission for the United States.  In my opinion Lighthizer is the most under-appreciated member of an exceptionally good economic team. Everything about Lighthizer’s approach is based on enforcement.
Ambassador Lighthizer has been consistent over multiple years, on his intention to create enforceable trade reform between the U.S. and China, or, if needed, decouple the two economies if China fails to accept the necessary structural reforms.
Tonight, as the Chinese delegation arrives, Lighthizer discusses the U.S-China ‘phase-one’ agreement with Lou Dobbs. WATCH:

(more…)

Secretary of Treasury Steven Mnuchin appears with Maria Bartiromo to discuss the latest round of sanctions against Iran.  Secretary Mnuchin notes the economic engagement by China with Iran may open up Beijing to countermeasures for violating sanctions.
Additionally, Secretary Mnuchin outlines some aspects of the U.S-China ‘phase-one’ trade agreement and affirms the key point of enforcement mechanisms built into the agreement by U.S.T.R. Robert Lighthizer.  The official signing is this coming Wednesday.

(more…)