The issue is basic to the construct of the USMCA (NAFTA replacement).
BMW made a multi-billion-dollar investment in Mexico in anticipation of exploiting the NAFTA loophole.  President Trump has closed the loophole.  The new USMCA agreement requires 75% of automobile parts made in North America; and 45% must come from plants with minimum labor costs ($16/hr), or face tariffs upon export to the U.S.
As a result BMW is now considering opening those higher-wage component supply operations in the U.S.

LOS ANGELES (Reuters) – BMW (BMWG.DE) is considering a second U.S. manufacturing plant that could produce engines and transmissions, Chief Executive Harald Krueger said on Tuesday, shortly after a report that U.S. President Donald Trump would impose tariffs on imported cars from next week
[…] BMW is considering changes to U.S. operations as sales in the region grow, Krueger said. BMW has a U.S. vehicle assembly plant, in South Carolina, is planning to open a Mexico factory next year, and is considering changes to its current scheme of importing engines and transmissions.

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A small but interesting development in the relationship between the U.S. and Mexico highlights a backstory CTH suspected several months ago {Go Deep}. August 25th:

As USTR Robert Lighthizer was working with the trade officials representing outgoing Mexican President Peña Nieto, White House adviser/emissary Jared Kushner was quietly working behind the scenes with AMLO trade adviser Jesus Seade and outlining the possibilities if they partnered with strategic economic objectives in mind.
As a result of Kusher’s dogged efforts to bring an entirely new dual-nationalist ‘focus’ within the trade construct, removing the historic globalist baseline, the outcome of the trade deal is excellent for both the U.S. and Mexico.  So today:

MEXICO – […] Kushner will receive the prize “for his contributions to achieve the negotiation of the new United States-Mexico-Canada Agreement (USMCA),” according to a statement by Mexico’s Foreign Relations Secretariat.
Peña Nieto will present Kushner, President Trump’s son-in-law, with the award on Thursday at the Group of 20 summit in Argentina, according to the Reforma newspaper.

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Press Secretary Sarah Sanders, National Security adviser John Bolton and National Economic Council Chairman Larry Kudlow hold a very important press briefing from the White House.
Chairman Kudlow discusses current economic issues, and the upcoming possible trade discussions with China at the G20 meeting in Buenos Aries, Argentina. At 19:00 minutes NSA John Bolton takes over to discuss the scheduling details of the G20.  [Interesting trilateral mentioned: Trump, Modi and Abe] At 30:00 minutes Sarah Sanders takes over.

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Canadian media are reporting that General Motors plans to shut down operation in Oshawa, Canada.   This is quite possibly an outcome that portends the sign of things to come…

CANADA – Numerous sources have told CTV Toronto that General Motors is planning to close all operations in Oshawa, Ont., affecting thousands of high-paying jobs.
The announcement is expected to be made on Monday, in the city of about 159,000 people located roughly 60 kilometres east of Toronto.  Sources said they believe the Oshawa closures are part of a global restructuring. (read more)

GM holds considerable risk exposure within the current state of international trade and economics as it relates to the auto industry.  As a result of the ongoing U.S-China trade confrontation, GM holds risk as a result of heavy investment in China.  Add to that exposure the very significant financial impacts about to start for heavy manufacturing operations inside countries aligned with the Paris Climate Treaty, and the risk increases.
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The Washington Times is reporting on a possible agreement between U.S. and Mexico officials to keep all Central American asylum seekers outside the U.S. during the process to evaluate their asylum claims.
The important backdrop here is the new Mexican President, Andrés Manuel López Obrador (AMLO), taking office on December 1st.  If the reporting is correct, there may be an agreement in the works between President Trump’s administration and AMLO’s team.
Reading between the lines, the mutually beneficial structure of such an agreement is likely based within prior economic (trade) discussions. [CTH sees Jared Kushner’s diplomatic fingerprints at work]  Friends with benefits….

(Via Washington Times) Immigrants seeking asylum in the United States by entering through Mexico could be required to wait south of the border while U.S. courts assess their cases, a member of the incoming Mexican government said in an interview published Saturday.
Andrés Manuel López Obrador, Mexico’s president-elect, plans to implement a policy known as “Remain in Mexico” after taking office next month, his top domestic policy official told The Washington Post.

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In June 2018 President Trump instructed U.S. Trade Representative Robert Lighthizer to initiate a 10% tariff on $200 billion of Chinese goods (Round #1).  After two months of China refusing to negotiate renewed trade deals in good faith President Trump instructed Lighthizer to increase the tariff rate to 25% in August (Round #2).  There is a third tranche of tariffs scheduled for January 1st, 2019.

With a full quarter of trade data to analyze the impacts, the results are now measurable.  A multinational group studying the outcome (full pdf below), identified that approximately 4.5% of the tariff is being carried by American consumers.  The overwhelming cost of the tariff is being paid (20.5% absorbed) by Chinese producers.

(Via Bloomberg) President Donald Trump is succeeding in making China pay most of the cost of his trade war.
That’s the conclusion of a new paper from EconPol Europe, a network of researchers in the European Union. U.S. companies and consumers will only pay 4.5 percent more after the nation imposed 25 percent tariffs on $250 billion of Chinese goods, and the other 20.5 percent toll will fall on Chinese producers, according to authors Benedikt Zoller-Rydzek and Gabriel Felbermayr.

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The most consequential long-term challenge being confronted by President Trump surrounds the influence of communist China, and their state-controlled economic conquest strategy.
To quantify the scale of the issues, in 2017 President Trump commissioned a Section 301 review by the United States Trade Representative Robert Lighthizer.  In March 2018, Lighthizer delivered his report.  That initial report became the baseline for the tariffs levied against Beijing.  Yesterday, Lighthizer released an update of that ongoing review.  The report is below:
[scribd id=393902698 key=key-kjNtouzB6djFEcPBapQB mode=scroll]
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Remember, the Chinese red dragon has a tendency to say one necessary thing publicly, while manipulating another necessary thing privately. Cunning is part of ‘The Art of War’.
President Trump is the first U.S. President to understand how the red dragon hides behind the panda mask.
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An article published originally in the U.K. Telegraph, and republished via Yahoo News outlines growing fear within the U.K. government and British intelligence officers surrounding President Trump discovering how far they were involved within “Spygate”.
The facts are not uncommon to anyone who has done research into the events of 2015 and 2016; however, the interesting aspect surrounds the current level of anxiety which indicates something is soon to become very public.
The central concern of the British officials surrounds President Trump declassifying evidence that will outline a coordinated effort by a weaponized U.S. intelligence apparatus to use their foreign counterparts for two aspects:  (1) to spy on the Trump campaign in 2016; and (2) to help carryout an entrapment scheme that would become the baseline for the FBI’s counterintelligence operation which evolved into Mueller’s Russian election interference investigation (aka. the “insurance policy”).
According to the Telegraph outline the current U.K. Prime Minister is intentionally being kept out of the communication loop because British intelligence are fearful President Trump might ask about her knowledge.  Keeping Theresa May blind to the U.K operations against Trump provides plausible deniability if questioned.  Additionally, all British embassy staff in the U.S. have been told to say absolutely nothing if questioned.
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CTH has pointed, repeatedly, toward a very specific economic and financial dynamic  because President Trump is uniquely focused on Main Street’s “real economy“.
Everything happening in/around the financial markets is very predictable when you focus on understanding the principles of Main Street MAGAnomics and how those basic principles diverge from Wall Street’s “paper economy” (currently weighted by tech stocks).

Everything is happening in a very predictable sequence. Few understand the MAGAnomic reset and what was predicted to happen in the space between disconnecting a Wall Street economic engine (globalism and multinationals) and restarting a Main Street economic engine (nationalism/America-First).  In 2016 CTH explained where we would be today. With current Wall Street events, perhaps it is worthwhile remembering the CTH forecast.

Originally outlined far more than a year ago. Reposted by request on Oct 11th.

President Trump’s MAGAnomic trade and foreign policy agenda is jaw-dropping in scale, scope and consequence. There are multiple simultaneous aspects to each policy objective; however, many have been visible for a long time – some even before the election victory in November ’16.  What is happening within the financial markets should not be a surprise.
If we get too far in the weeds the larger picture is lost. Our CTH objective is to continue pointing focus toward the larger horizon, and then at specific inflection points to dive into the topic and explain how each moment is connected to the larger strategy.
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If you want a prelude to how the democrat/globalist/left-wing political machine is gearing up to disrupt any U.S. economic success, here it is.   With the opportunity to discuss important and consequential economic initiative with Commerce Secretary Wilbur Ross, Yahoo Chief Narrative Engineer, Andy Serwer, runs through a litany of political talking points.

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There has been some banter about the possibility of Wilbur Ross being replaced next year, possibly by Mick Mulvaney.  While all such media speculation should be taken with a grain of salt, this interview highlights the foreseeable landscape of confrontation.
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