Earlier today President Trump and first lady Melania welcomed the President of Argentina Mauricio Macri and his wife Juliana Awada to the White House.
One of the key topics on the agenda for President Macri is trade with the U.S., specifically the Argentinian export of lemons into the U.S. Understandably California, and to a lesser extent Florida, citrus growers are opposed to large scale imports of competing crops.
Additionally, during the customary Oval Office photo-op President Trump remarks about the ongoing NAFTA trade issues, and the phone calls yesterday between Canadian Prime Minister Trudeau and Mexico’s President Peña Nieto:
“If I’m unable to make a fair deal for the United States–meaning a fair deal for our workers and our companies, I will terminate NAFTA.”
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The U.S. media are considerably invested in framing NAFTA trade issues around their ever-present need to oppose the White House (Trump Derangement Syndrome); and many of the recent media narratives around NAFTA are entirely false.
During an AP interview last week President Trump first mentioned a possibility of complete withdrawal from the 25-year-old NAFTA agreement. Today several outlets are reporting on a draft executive action to do just that.
BACKGROUND: One of the problems with the NAFTA trade agreement (and most other trade deals) has been that no administration ever reevaluates them to measure their long-term impact since implementation. It has been almost 25 years since Bill Clinton signed NAFTA (’94) and only now in 2017 is the Commerce Secretary Wilbur Ross evaluating the current value and measuring the economic impact to the U.S. in current terms.
Having spent over 30 years deep in the weeds on the actuarial side of trade and economics, I can guarantee you there’s a generational need to completely reset all frames of reference when it comes to imports, exports, and U.S. trade principles in general.
It is no longer worthwhile even beginning a conversation around the arcane concept of “free trade”, especially when discussing commodities and agricultural trade. The “free market” was structurally disassembled years ago when multinational corporations began using the business end of agriculture to create investment and global profit via Wall Street.
The BIG AGRICULTURE legislative lobbying groups are funded -much like the U.S. CoC- with multinational corporations and multinational investment banks. Agricultural prices, formerly referenced on basic supply and demand principles have been bastardized through global purchases, and contracts therein, of U.S. farm products.
Simple question to understand the dynamic: “If there is such a U.S. glut of raw milk, then why has the 10-year price of milk skyrocketed”? Within the answer to that question you realize the product is not domestic. It is controlled by multinationals, exported under controlled contract, and the domestic price (you pay) driven by global trade not domestic production/consumption (supply and demand).
The inverse (import pricing) is also true. We’ve been getting screwed by the multinational interests of global trade for decades. This is NOT ‘free trade’. The BIG CLUB owns the process (inputs and outcomes) and manipulates the market in their interests, not yours. There simply is no “free market”.
[TRANSCRIPT] – 3:14 P.M. EDT – THE PRESIDENT: Busy day. They had a very busy day — had a good day. We’re doing well, very well. Things are turning around. I know they’re turning around for you folks, so I just want to welcome you very much to the White House — special place — America’s farmers and ranchers.
I especially want to congratulate Secretary — now I can say, Secretary Sonny Perdue, who was just sworn in as the Secretary of Agriculture — (applause) — sworn in by Justice Thomas. And it was a beautiful ceremony, and we’re going to celebrate a little bit later, and that’s great. We’re very happy. And you had a good vote too.
(Via Reuters) The United States on Monday blacklisted 271 employees of a Syrian government agency it said was responsible for developing chemical weapons, weeks after a poison gas attack killed scores of people in a rebel-held province in Syria.
The U.S. Treasury Department sanctioned 271 employees of Syria’s Scientific Studies and Research Center (SSRC), an agency that Washington says develops chemical weapons for the government of Bashar al-Assad, the Treasury said in a statement.
Some of the people blacklisted had worked on Syria’s chemical weapons program for more than five years, the Treasury Department said. The sanction orders U.S. banks to freeze the assets of any employees named, and bans American companies from conducting business with them.
A newly empowered Chris Wallace takes the big government Fox Media position and begins arguing with OMB Director Mick Mulvaney. Interested observers will note Wallace defends the U.S. CoC lobbying position around the budget, health care, the border wall, the imminent risk of government shutdown, Trump’s “first 100 days”, necessary tax cuts, cuts to environmental protection etc.
It can be frustrating to watch because Chris Wallace is arguing the exact positions of Tom Donohue, the U.S. CoC and the K-Street swamp’s corporatist lobbyists.
Sometimes geo-politics can be funny and deserve a little snark in discussion. The International Monetary Fund (IMF), and World Bank, are holding a conference in DC. this weekend. Deplorable Secretary Mnuchin represents U.S. and Trump interests.
Amid the earlier G20 Summit the Trump effect ended up with changed language from the finance leadership. Titan Trump’s election changed the way the IMF and World Bank globalists talk about international trade. Bi-lateral and nationalism are no longer dirty words.
WASHINGTON (Reuters) – International Monetary Fund members on Saturday dropped a pledge to fight protectionism amid a split over trade policy and turned their attention to another looming threat to global economic integration: the first round of France’s presidential election. (more)
However, funnier still is the resurfacing of a familiar face. You might well remember former Mexican Finance Minister Augustin Carstens resigned as Mexico’s central bank chief just after the election of Donald Trump. Well, apparently, the job of saving face for the changed approach of the IMF/World Bank is now squarely on Carsten’s shoulders.
President Trump visited the Treasury Department today so sign one executive order and two presidential memorandums.
The executive order requires Treasury to identify and lessen burdens from tax regulations issued in 2016. The two memorandum focus on examining and possibly revisiting two areas of the 2010 Dodd-Frank financial reform law in an effort to remove the regulatory and compliance burdens on smaller banks.
When Dodd-Frank was instituted it was sold to the electorate as a bill to stop banks from becoming too big to fail, there were 12 massive banks under that definition. The goal was to create more national banks. Since passage those ‘too big to fail banks‘ have become even bigger. Twelve banks, are now five even bigger banks. Go figure.
[Transcript] 2:55 P.M. EDT THE PRESIDENT: Thank you very much, Steve. Great honor, I must say. It’s a great pleasure to be at the United States Treasury Department and to meet so many dedicated public servants.
I went through that beautiful hallway where those incredible paintings of past secretaries, and it was really very interesting. I want to read every one, I want to learn about every one of them, but we have one that I hope will go down as one of the greats. I think Hamilton is tough to beat, but maybe you can do that too. We’ll take it, right? But thank you very much.
Perhaps it’s because the complexity is difficult to distill; maybe it’s because some just can’t give President Trump any credit; or perhaps it’s because the scope is too challenging to comprehend against the constant belittlement meme du jour. Regardless of reason, President Trump is fundamentally realigning international geo-political alliances and almost no-one is connecting the dots.
President Trump obviously held a long-ball strategy with the Chinese; he’s described the approach in his books and lived the approach in his business life:
At the outset, position yourself at the furthest oppositional point when it costs you nothing; then leverage inward toward your opponent as they expend their resources to meet your stance.
Almost no-one is noting the scope of what President Trump has accomplished simply by positioning himself at the furthest extreme from the best interests of China, and then working his leverage back toward dual-interests as the Chinese expend capital to meet the point of mutual benefit.
President Trump has expended nothing other than his sheer will, and yet he has leveraged gains that are jaw-droppingly consequential.
♦ What’s the goal of identifying China as a currency manipulator? To stop China from manipulating currency, right? Well, arm-chair opposition says President Trump has reversed his position simply by ‘not doing something’. However, that opposition doesn’t seem to acknowledge the end-goal of the labeling has been achieved without expending an effort. The doing is unnecessary when merely the threat of the doing changes the behavior of the doer.
In two days, April 6th and April 7th, President Trump met with Chinese President Xi Jinping. What actions has President Trump taken, other than ‘not’ doing something, and what actions has President Xi Jinping taken? (more…)
As President Donald Trump and President Xi Jinping wrapped up the summit in Mar-a-lago, overshadowed in media reports by U.S. missile strikes in Syria, President Xi joined with President Trump and focused on stressing the positive mood of the meetings between the world’s two biggest economies.
Team U.S.A insisted both President Trump and their delegation had made good on the pledge to raise concerns about China’s trade practices and said there was some headway. Team China and President Xi agreed to a 100-day plan for trade talks aimed at boosting U.S. exports and reducing China’s trade surplus with the United States.
Secretaries Tillerson (State), Mnuchin (Treasury) and Ross (Commerce) held a debriefing session with the media at the end of the summit. What a stunning difference in the approach and level of direct and concise communication. (Oh, and side note – Wilburne continues to crack me up, even in the reading of his responses.) Here’s the transcript:
