Earlier today Nancy Pelosi was questioned about why the House was not voting to pass the USMCA trade agreement.  Speaker Pelosi immediately fell back upon her talking point: “we are working toward yes.”   This is complete hogwash.  There are no discussions. Pelosi is doing what Pelosi does best, politicizing anything positive for the U.S. economy in a concerted effort to undermine Trump in 2020.
Here’s what is going on.
Nancy Pelosi and her far-left ideologues entered an agreement with their Canadian liberal allies and Justin Trudeau to stall the USMCA passage.
Trudeau’s government ideologues agreed not to call the USMCA up for a vote in the Canadian parliament.
Speaker Pelosi is waiting to see if Trudeau can win re-election.  If Canada re-elects Trudeau on October 21st, Pelosi will announce the labor provisions are not strong enough within the USMCA deal; discussions with the Trump administration are not resolving the issues; the U.S. workers are not protected enough, and she is tabling any vote.
Speaker Pelosi will then wait until after the 2020 election.  The purpose is political.
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Earlier today President Trump met with Italian President Matarella and held a press availability in the oval office prior to bilateral discussions. [Video and Transcript below]

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[Transcript] – PRESIDENT TRUMP: Well, thank you very much. It’s a great honor to have the President of Italy with us. He is a man of great distinction. He’s highly respected in this country. And it’s nice to have you at the White House. Thank you very much, Mr. President.

We’ve had a great relationship with Italy for a long time. I don’t think it’s ever been closer than it is now. We have won a $7.5 billion award from, as you know — I guess it’s been pretty big news. And I know that this is against the European Union and World Trade — good ole World Trade. For a long time, they’ve been taking advantage of the United States. And I know Turkey is going to talk to us about their share of it because they feel they shouldn’t have to pay so much.

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Commerce Secretary delivered a speech to the Federalist Society today as he explained U.S. trade policy under President Trump and the long-term goals and objectives.

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Hat Tip OverTheMoonbat for making sure we didn’t miss this segment from last week.  This video also explains why Larry Kudlow, Secretary Mnuchin, Secretary Ross and Peter Navarro have tended to spend more time discussing economic policy with CNBC analysts than Fox Business.   However, before watching, it is worth revisiting the background.

For three years CTH has explained the challenge in dealing with, or renegotiating with, the Beijing, China ideology.  Encapsulated thus in 2018:

[…] China has no cultural or political space between peace and war; they are a historic nation based on two points of polarity. They see peace and war as coexisting with each other.
China accepts and believes opposite or contrary forces may actually be complementary, interconnected, and interdependent in the natural world, and they may give rise to each other as they interrelate to one another. Flowing between these polar states is a natural dynamic to be used -with serious contemplation- in advancing objectives as needed.
Peace or war. Win or lose. Yin and Yang. Culturally there is no middle position in dealings with China; they are not constitutionally capable of understanding or valuing the western philosophy of mutual benefit where concession of terms gains a larger outcome. If it does not benefit China, it is not done. The outlook is simply, a polarity of peace or war. In politics or economics the same perspective is true. It is a zero-sum outlook.
If it does not benefit China, it is not done !

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Steve Bannon is at his best when he explains how the Chinese Communist Party (CCP) use their power in economics -against the capitalist view of profit- to erode the values of western companies and corporations.   Good points made in this interview.

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Here is the video and transcript from the Oval Office press announcement by President Trump and Chinese Vice-Premier Liu He.   USTR Lighthizer and Secretary Mnuchin also provided some insight into “Phase-One” of the U.S-China trade agreement.

[Transcript] – PRESIDENT TRUMP: Well, thank you very much. We’ve had a lot of very big news and some very good news today. But I’d like to hold this for China. There’s nothing bigger than what we’re doing with China. I think it’s important that these are the questions that are asked. And, as you know, we have the Vice Premier of China, one of the most respected men in all of China, and the world, for that matter. And we have great respect for him, a great friendship with him.
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Lots of dragon-dancing with a very hungry panda.

President Trump, U.S. Trade Representative Robert Lighthizer and Treasury Secretary Mnuchin gathered with their Chinese counterparts in the Oval Office for a lengthy  announcement of “phase-one” of a U.S-China trade agreement.  Vice-Premier Liu He leads the Chinese delegation.  [No point sheet on USTR website yet]  According to the presser:

Phase One has reached ‘agreement in principle‘, and includes: Intellectual Property issues; Banking and Financial Services to include currency devaluation; and major agricultural purchases ($50 billion +).  There will be several phases, and each phase will have an individually tailored enforcement mechanism. [Note: this approach sounds similar to the ‘six sectors and stages’ USTR Lighthizer discussed in March 2019.]
The Phase One agreement details still have to be put on paper over the next five to six weeks.  The U.S. and China are hopeful to have ‘phase one‘ complete by December. In exchange for current AG purchase commitments, and as an act of good faith while phase-one is finalized, the U.S. will suspend the tariff rate increases scheduled to take effect on October 15th. The tariff increase from 25% to 30% has been ‘suspended‘.
The scheduled U.S. tariff increases for December are still planned; however, they will be assessed as part of the ongoing negotiations.  Meanwhile, touchy issues like tech company Hauwei, 5G, telecom and the Chinese firms on the U.S. blocked “entity list” (ie. trade ‘blacklist’) are not part of the discussions.  Those issues fall under U.S. National Security and will not be part of any ongoing trade negotiations.
[Video Below]
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Despite Wall Street headline writers trying to frame an opposite reality, President Trump has no disposition toward making a trade deal with China.  Conversely, China has no intention of changing the closed and state-controlled structure of their economy.  That’s the reality amid a trade dance that is going absolutely no-where.
This quote is priceless: “We can add the Diplomatic war to the Financial war, Currency war and Technology war, that we already have,” John Browning, managing director at brokerage BANDS Financial in Shanghai, said in a note to investors.

The Chinese position is thus:

REUTERS […] The U.S. demand that the Chinese Communist Party fundamentally change how it directs China’s massive economy to shift to a more Western model of free-market capitalism is irrational and misguided, a Chinese diplomat in the United States said.
“What we achieved during the past few decades shows that our system is good for development in China,” the official said, speaking on condition of anonymity.

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Today at 3:30pm ET, President Trump will sign the U.S-Japan trade agreement and U.S-Japan digital trade agreement.  This represents “stage-one” (agriculture, industrial tariffs, digital trade) of a complex U.S-Japan trade agreement negotiated by U.S. Trade Representative Robert Lighthizer and Japanese Foreign Minister Motegi. (Details)
[Update – Video and Transcript Added]

[Transcript] THE PRESIDENT: Well, thank you very much everybody. I want to start by wishing my very good friend, Prime Minister Abe of Japan, a very happy birthday. He’s 39 years old today. (Laughter.) So please extend my wishes to the Prime Minister. He’s a great gentleman and we have had tremendous success.
As you know, in addition to what we’re talking about today, they’re building — Japan — many car plants in the United States, which they weren’t doing for a long time. And they’re building in Michigan, Ohio, lots of different states. And we just appreciate it very much. Been a tremendous investment.
But we’re here to talk about a little bit of a different purchase, and that’s good as far as we’re concerned. And I want to thank you very much. Very much. Thank you. (Applause.)
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An interesting article within The Atlantic draws attention to one of the more intended consequences of Maganomics: wages for the middle-class Americans are rising twice as fast as wages for high-income earners.

(Source)

Yes, President Trump is closing the wealth gap.
This dynamic is directly attached to President Trump’s MAGAnomic policy that focuses wage and income benefit directly to Main Street, “production economy”; and reverses the process that was driving benefit to U.S. multinationals on Wall Street, the “service-driven” economy.   As noted in The Atlantic:

[…]  According to analysis by Nick Bunker, an economist with the jobs site Indeed, wage growth is currently strongest for workers in low-wage industries, such as clothing stores, supermarkets, amusement parks, and casinos. And earnings are growing most slowly in higher-wage industries, such as medical labs, law firms, and broadcasting and telecom companies. (more)

While there are not technically going to be direct losers in a Main Street economy, there will undoubtedly be some amid the investment class who will be lesser-winners.
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