Yesterday President Trump invited the media to keep their cameras on during a round-table discussion on trade.  He did this for a reason.  President Trump wanted the American voters to watch Republican politicians demand that he stop trying to bring manufacturing jobs to the United States.

In essence, Trump doing what Trump does best, played the role of Toto and pulled back the curtain on the Republican anti-American corporate business agenda.  The republicans in attendance never paused to reflect upon the sunlight or the reason for their specific invitations. They are comfortable back-room deals and POTUS Toto relaxed them perfectly.

One by one the Republicans took-the-bait and fully exposed themselves.  Lamar Alexander, Mike Lee, Pat Toomey and Roy Blout all took turns telling POTUS to quit trying to save American high-wage jobs, drop the national economic view and just accept multinational corporate globalism.

The subsequent full-throated establishment display stands as one of the greatest plays of the Trump administration to date. However, it was Republican Senator Ron Johnson from Wisconsin who really went the full distance:

[Transcript] […] In Wisconsin, a big manufacturing state, in seven years I have not visited one manufacturer that could hire enough people. That was certainly my experience in the last 20, 25 years. For a host of reasons, we tell our kids you have to get a four-year degree. We pay people not to work. So we do need to be concerned about, in such a tight labor market, do we have enough workers in manufacturing.

So my final point is, it makes no sense for me to try and bring back high labor-content manufacturing to America. We need to do the value added things. And so I would just say, proceed with real caution there.  (more)

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Earlier today one of the more consequential meetings took place between President Trump and his economic team -vs- the professional UniParty apparatus consisting of multinational corporate-purchased Democrats and Republicans.

The policy discussion isn’t sexy or headline making from the perspective of the U.S. media; however, the resulting outcomes will have more of a bearing on you and your family than any other economic policy conflict in this administration.

On one side we have President Trump and a very focused policy and trade group containing Commerce Secretary Wilbur Ross, Treasury Secretary Steven Mnuchin and U.S. Trade Representative Ambassador Robert Lighthizer. On the other side the corporate UniParty apparatus consisting of U.S. Chamber of Commerce Republicans and Democrats.

An encapsulated view would be Main Street (Trump) -vs- Wall Street (UniParty).

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This is THE battle. This is the “trillions at stake“. Everything else is chaff and countermeasures; a war is being waged around this financial issue. Everything within the current conflict is downstream from the economic argument around these issues.

This is the epicenter of the entire institutional conflict against President Trump. This is why THE SWAMP, through all its various affiliated and indulgent enterprises – including the intelligence apparatus, are waging a battle against the disruption that is President Trump.

It is the money.

Period.

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Apparently a group of GOP Senators are proposing an outline (pdf below) for the Republican senatorial legislation for immigration reform.  A first review of the seven  senators outlined in the group shows a majority-minded tilt toward the CoC position(s), with a dose of Chuck Grassley sprinkled in to make their GOPe mix palatable.

With the 1000mg bitter pill of a massive budget bill still blocking our trachea, upon first glance we note an ideological similarity here to the failed Obamacare repeal construct (amid the big picture analysis). The backdrop is a faux-deadline of March 5th where POTUS asked congress to solve the DACA issue. Here’s the press release:

WASHINGTON D.C. -A group of U.S. Senators tomorrow will introduce a common-sense proposal aimed at providing legal certainty for undocumented children brought to the United States by their parents and preventing others from falling into the same legal limbo in the future.

Their proposal, which mirrors the White House framework announced by President Trump, provides a generous opportunity for approximately 1.8 million DACA or DACA-eligible immigrants to earn citizenship while strengthening our nation’s border security and enforcement measures to reduce illegal immigration.

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The NAFTA sell-off is underway.  Relax.  No big deal.  The “NAFTA Reality Correction” is approximately 5 to 7%.  Multinationals hold greatest exposure. Everything is temporary.

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Twists and turns as Wall Street paper economy shifts toward ultimate equilibrium with Main Street real economy.  Real company P&L results (MAGA) will eventually replace speculative stock valuations.  Volatility is the norm while navigating the space between.

President Trump will pull the U.S. out of NAFTA and direct the U.S. Trade Representative to engage in bilateral trade deals with Canada and Mexico individually.   There is no other possible alternative and here’s why.

First, the essential problem with NAFTA was an evolution over time.  In its current form NAFTA became an exploited doorway into the coveted U.S. market.  Asian economic interests, large multinational corporations, invested in Mexico and Canada as a way to work around any direct trade deals with the U.S.
By shipping parts to Mexico and/or Canada; and by deploying satellite manufacturing and assembly facilities in Canada and/or Mexico; China, Asia and to a lesser extent EU corporations exploited a loophole.  Through a process of building, assembling or manufacturing their products in Mexico/Canada those foreign corporations can skirt U.S. trade tariffs and direct U.S. trade agreements.  The finished foreign products entered the U.S. under NAFTA rules.
Why deal with the U.S. when you can just deal with Mexico, and use NAFTA rules to ship your product directly into the U.S. market?
This exploitative approach, a backdoor to the U.S. market, was the primary reason for massive foreign investment in Canada and Mexico; it was also the primary reason why candidate Donald Trump, now President Donald Trump, wanted to shut down that loophole and renegotiate NAFTA.
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It can be a little confusing to listen to business or economic news analysts discussing the current state of the economy.  They are all generally positive, but the inherent delivery of their forecasts is cast against the backdrop of their experience.  Almost no-one, currently in the business of economic analysis, has experience, life skills, analytical training or educational understanding based on anything other than a Wall Street economic outlook.
Business Schools stopped teaching the principles of Main Street economics forty years ago.  All modern analytical tools, and the data-systems therein, were structurally built upon an economic theory that establishes Key Performance Indexes based on Wall Street economic models.  Titans of industry were replaced by fast-talkers pushing paper.
The paper economy and the monetary policy therein, has been the underlying architecture of economic analysis for decades.  Within this process Main Street U.S.A., was assigned the role of a “service driven” economy. Institutionally everyone accepted this reality.  Thus, those same voices are conflicted and cannot reconcile today’s economic shifts.
The Atlanta Federal Reserve is now estimating the potential growth for the first quarter of this year at 5.4%.  This is a stunningly high projection when historic assumptions are factored.  However, in the new MAGAnomic economy, it’s high, but not out of line.

The Main Street economic engine is roaring back to life.  Real consumer spending jumped from 3.1 percent to 4 percent in the latest quarter.  Consumer spending is approximately two-thirds of our GDP.  However, the real key figure is ‘investment”.   Private fixed-investment growth surged from 5.2 percent to 9.2 percent, that’s where the growth projections should be focused.  Trump’s MAGAnomic policies are driving investment in the U.S. economic base.  The current growth in private investment has doubled.
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Commerce Secretary Wilbur Ross appears on CNBC to discuss ongoing trade initiatives including NAFTA, China and the more broad Asia background.  Additionally, Wilburine discusses growth in GDP and anticipated economic enhancements from the tax cut legislation.

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Earlier today it was announced that ADP private payroll growth for January has exceeded 234,000 jobs gained.   “The job market juggernaut marches on,” Mark Zandi, chief economist at Moody’s Analytics, said in a statement. “Given the strong January job gain, 2018 is on track to be the eighth consecutive year in which the economy creates over 2 million jobs.  (read full story on payroll report)
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NAFTA renegotiation round six ended yesterday in Canada will no substantive progress on the most contentious trade issues.  One negotiation chapter on corruption was closed, but there was little to no agreement on much else.
Each of the primary Trade Representatives gave a closing statement at the conclusion of Round #6.  U.S.T.R. Lighthizer blasted Canada for attempting to inject schemes, fraud and deceptive dealing within the negotiations. Princess Rainbow Sparkles from Canada tried to pretend the Canadian proposal was realistic.  It was all awkward.  Hopefully President Trump will soon get us out of this nonsense. Lighthizer Transcript below video:

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Ambassador Lighthizer: It is a pleasure to be here in Quebec. Montreal is one of the great cities of the world, and I have not been back in many years, and I’ve missed it. I used to come here in the 70s and 80s with my wife and children to go to Mont-Tremblant and learn how to ski. We loved the French culture, we loved the excellent food, the wonderful skiing and as I recall, it was cold all the time. That hasn’t changed at least.
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Round six of NAFTA renegotiation talks continue today as Canada and Mexico claim cautious optimism that a round seven will take place.  This round of talks is scheduled to continue through Monday and end with a much anticipated a joint press conference between Ildefonso Guajardo (Mex), Chrystia Freeland (Can) and U.S. Trade Rep. Robert Lighthizer.   There were seven rounds initially scheduled.
Canada and Mexico are trying to close less important, and less controversial, trade chapters in an effort to give the illusion of progress and frame a political narrative that lends itself toward continuing to talk; ie. round seven.
However, if there’s no significant progress on the larger issues it’s doubtful Lighthizer will find value in endless words that amount to nothing.
Canada and Mexico have been lobbying U.S. politicians hard to retain their parasitic trade positions.  Additionally, a significant number of Washington DC politicians are willing to take massive bribes from the U.S. Chamber of Commerce lobbyists and support the export of American economic jobs and wealth.   This is another key UniParty indulgence issue.
Big Corporate Agriculture (Big AG), the consortium of massive multinational agriculture companies who hold stakes in the entire continent, are pushing hard to keep their “controlled market” dominance in place, and is attempting to stoke fears using false claims about farms and negative trade impacts to farmers.  Pure nonsense.
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President Trump and U.S. Trade Representative Robert Lighthizer held an open-press Oval Office event to announce trade action, tariffs, against China (solar) and S-Korea (washing machines) for product dumping. [Details Here]
The backdrop of this executive action happens on the first day of NAFTA round six talks beginning in Canada.  Ambassador Lighthizer will be traveling to Canada shortly.  It is increasingly likely that President Trump will exit NAFTA as part of the larger initiative to draw manufacturing jobs back into the U.S.   In this round, we are hearing from those close to the work that Mexico and Canada are panicked and ready to concede in an effort to keep access to the U.S. market they are dependent on.
President Trump and Ambassador Lighthizer are now in the process of leveraging the U.S. business tax policy changes to hammer bilateral trade deals.  This is where the teeth of Team wolverine become visible.  All future action builds on all preceding action.

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The economic shift in 2018 will be a very visible Ambassador Lighthizer. Commerce Secretary Wilbur Ross built the larger foundation for U.S. trade policy and USTR action in 2017. Now that a smooth policy foundation is established, Robert Lightizer shifts into gear and becomes the trade-deal closer in 2018.
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