• Same story, different day...........year ie more of the same fiat floods the world
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  • "Spreading the ideas of freedom loving people on matters regarding high finance, politics, constructionist Constitution, and mental masturbation of all types"

Trump's Economic, Tax & Spending Plans

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'American jobs are on the line because of Trump's trade war – and he knows it': Trudeau and Macron send warning they intend to get tough with US president at G7 summit

  • Justin Trudeau and Emmanuel Macron spoke at a joint press conference today
  • 'American jobs are on the line because of [Trump's] actions,' said Trudeau
  • Macron arrived in Canada Wednesday for talks in advance of pivotal G7 summit
  • He added: 'It will start to hurt American workers, the cost of raw materials will rise and industry will become less competitive'
http://www.dailymail.co.uk/news/art...warning-intend-tough-president-G7-summit.html
 

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'Trouble with almost every subject': Discord between EU leaders & Trump
RT



Published on Jun 9, 2018
This year's G7 summit in Canada is being dominated by divisions.
Not only is there resentment over America's new trade tariffs but Donald Trump's sowed further discord, by suggesting Russia should be re-instated to the group.
The proposal has split the allies - though they've agreed to keep it off the agenda this year.
 

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The ‘Fiduciary Rule’ May Sound Boring, But Its Collapse Threatens Your Retirement

Bloomberg
Katherine Chiglinsky
11 hrs ago

Among all the financial reforms launched during the Obama administration, the fiduciary rule may have been the most important to ordinary investors. Issued by the Department of Labor in 2016, the rule required brokers working with retirement accounts to put clients’ interests ahead of their own—for example, by recommending an annuity that was better for the client rather than one from a company that paid the broker a bigger commission. The regulation was hailed as an historic win by consumer advocates, and the financial-services industry began remaking many of its products and pay structures to comply.

Now the regulation is all but dead. In March a federal appeals court struck it down, and the Trump administration has not appealed the ruling. Where does that leave retirement investors? The outlook is anything but clear.

In April the Securities and Exchange Commission released its own plan for investor protection. In a proposed rule that runs hundreds of pages, the agency says it wants brokers “to act in the best interest of the retail customer” but adds, “We are not proposing to define ‘best interest’ at this time.” Instead, the agency lists “obligations” of brokers to ensure they don’t place their own interests before those of their clients and says financial companies must “establish, maintain and enforce policies” that are designed to spot and mitigate conflicts. “We don’t know what they mean by ‘best interest,’ ” says Barbara Roper, director of investor protection at the Consumer Federation of America. “And that is a problem they need to fix because this regulation, as drafted, depending on how it’s interpreted, could be anything from the status quo to a significant improvement in investor protection. And if it’s vague, it’s going to be difficult to enforce.”

The advent of the fiduciary rule led the industry to make changes that may not be reversed, according to Aron Szapiro, Morningstar Inc.’s director for policy research. After the Labor Department’s announcement in 2016, financial companies began moving to comply with it. Bank of America Corp.’s Merrill Lynch stopped offering many commission-based retirement accounts in favor of ones that charge fees. “At the very least, from a PR standpoint, it would be difficult to go back to the old ways of doing business,” says Brian Gardner, an analyst at Keefe, Bruyette & Woods Inc. “It just looks bad.”

Also, companies such as Primerica Inc. and Ameriprise Financial Inc. poured millions of dollars into training employees on the new rules, revising procedures and documents. “I don’t think some firms are particularly interested in going back and re-creating a new compliance regime to somehow take advantage of the absence of the fiduciary rule,” says Gardner.

While the rules remain uncertain, the debate has heightened public awareness of the investor-adviser relationship. The word “fiduciary” even seeped into popular culture, with comedian John Oliver devoting a segment of his HBO show to the fiduciary rule. Meanwhile, investors have to take the initiative, says Christine Lazaro, professor of clinical legal education at St. John’s University School of Law. They should “be comfortable asking more questions and not feel like they’re inadequate in some way because they don’t already know this information,” she says. “Have that conversation, and ask about anything that you don’t understand.”

BOTTOM LINE - An Obama-era rule that required some brokers to put clients’ interests ahead of their own has been struck down in court and may not be revived.

Read the original article here

http://www.msn.com/en-us/money/reti...reatens-your-retirement/ar-AAypJUS?ocid=ientp
 

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'We are close to a deal': White House says Trump and Trudeau are close to agreement on NAFTA at G7 summit after Canadian leader was seen locked in talks with the President

  • French President Macron and Canadian Prime Minster Trudeau both extended the olive branch to Trump
  • Posted photos on Twitter of their meetings with Trump at G7 in Quebec, Canada at G7 summit on Friday
  • Trump has lobbed Twitter attacks at France and Canada saying they charged 'massive tariffs' on US goods
  • He also angered the group of rich nations by imposing steel tariffs and calling for Russia's readmission
  • Italy's new Prime Minister Giuseppe Conte supported the idea but the other G7 leaders balked
  • Now White House says Canada is 'close to a deal on NAFTA' and also discussing a bilateral trade deal
  • But the G7 is likely to abstain from issuing a post-summit communique for first time due to lack of consensus
http://www.dailymail.co.uk/news/art...Trump-Trudeau-close-trade-deal-G7-summit.html
 

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Trump tries to defuse tensions with G7 allies after keeping them waiting at breakfast but remains adamant that he wants changes on trade tariffs and hails the summit an 'immense success'

  • Trump arrived late to the gender equality breakfast on Saturday, his last engagement at the summit in Charlevoix
  • He eventually sat next to IMF Managing Director Christine Lagarde and tried to engage her in banter
  • Afterwards, the president gave a speech hailing the summit an 'immense success' and celebrating his 'good' relationships
  • Trump insists Canada heard him out on his desired changes to trade tariffs which he deemed 'unfair'
  • He insisted again that Russia should be brought back into the group which he said would promote peace
  • Trump is now on his way to Singapore to meet North Korean leader Kim Jong-un on June 12
  • He said he was optimistic about their historic meeting and that he will know within the first minute if Jong-un is serious about denuclearization
http://www.dailymail.co.uk/news/art...s-easy-banter-allies-differences-persist.html
 

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Trump at G-7 floats end to all tariffs, threatens major penalties for countries that don’t agree

Washington Post
Damian Paletta, Anne Gearan
3 hrs ago

QUEBEC CITY - President Trump told foreign leaders at the Group of Seven summit that they must dramatically reduce trade barriers with the United States or they would risk losing access to the world’s largest economy, delivering his most defiant trade threat yet to his counterparts from around the globe.

Trump, in a news conference before leaving for Singapore, described private conversations he held over two days with the leaders of Britain, France, Germany, Italy, Japan, and Canada. He said he pushed them to consider removing every single tariff or trade barrier on American goods, and in return he would do the same. But if steps aren’t taken, he said, the penalties would be severe.

“We’re the piggy bank that everybody is robbing,” Trump said. “And that ends.”

The U.S. leader said his dealings with others leaders were cordial, and he repeatedly blamed past U.S. leaders for the current trade imbalance rather than other nations he said were savvy to take a good deal when they found one.

Trump repeated his view that Russia should be readmitted despite its annexation of Ukraine’s Crimea four years ago.

The leaders discussed the question of Russia’s inclusion in the group but reached no conclusion, Trump said.

“We didn’t do votes or anything, but it has been discussed,” he said.

Trump first referred to the Crimean annexation, which led to the G-7 disinviting Russia, only obliquely.

“Something happened awhile ago where Russia is no longer in,” he said. “I think it would be good to have Russia back in.”

“We’re looking for peace in the world. We’re not looking to play games,” Trump added.

Russia is a permanent member of the United Nations Security Council and plays a significant role in international security issues. Trump is not the first politician to make the real politik argument that Russia belongs at the G-7 table, but his position is a complete turnabout from the Obama administration, which condemned the 2014 Russian annexation from Ukraine and imposed sanctions on Russia in punishment.

“Crimea was let go during the Obama administration and you know Obama can say all he wants, but he allowed Russia to take Crimea. I might have had a very different” response, Trump said.

Trump’s pitch that world leaders eliminate all tariffs – or else – was his latest attempt to reorder the global trading system, which he says is stacked unfairly against the United States. The two-day summit here was intended to cool tensions between Trump and other world leaders, but as they departed on Saturday it became clear that many are still searching for answers and also searching for ways to deal with the unpredictable U.S. leader.

For example, on Friday evening, the White House issued a statement saying Trump and Canadian Prime Minister Justin Trudeau were very close to a deal to rework the North American Free Trade Agreement.

But during his comments on Saturday morning, Trump said there were still a number of different ways the NAFTA talks could play out, including the possibility of doing separate deals with Mexico and Canada, effectively cleaving the 20-year agreement in two.

“It was not contentious,” Trump said. “What was strong was the language that this cannot go on, but the relationships are very good.”

Trump gave a much different account of the talks during the two day summit as other officials. Canadians, for example, said Trudeau pushed back firmly on Trump’s imposition of tariffs on steel and aluminum imports. But Trump made it sound like other countries acknowledged that they were cheating the U.S. in these trade deals and he had finally caught them in the act.

“The European Union is brutal to the United States and they know it,” Trump said, adding that other leaders acknowledge as much in private.

“It’s like the gig is up,” he said. “They can’t believe they got away with it.”

European officials described a much different interaction and have made no public moves to back down from threats of retaliation against Trump’s tariffs. They plan to impose new barriers of their own.

As for Trump’s proposal to eliminate all tariffs, Trump said it was other clear how other countries would respond.

“I did suggest it,” Trump said. “I guess they are going to go back to the drawing board and check it out.”

http://www.msn.com/en-us/news/world...ntries-that-don’t-agree/ar-AAyqrwO?ocid=ientp
 

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Trump BACKS OUT of G7 agreement: President stuns leaders by leaving summit and then announcing on Twitter that America WILL NOT 'endorse the Communique' - before slamming 'dishonest and weak' Trudeau

  • Trump slammed Trudeau as 'dishonest and weak' on Twitter Saturday after leaving the G7 summit in Quebec
  • Stunned world leaders by pulling his endorsement for joint communique that traditionally follows every G7
  • Opened new front on trade dispute with Trudeau after White House said two leaders were 'close to a deal'
  • French presidential official says Trump delivered 'a long, frank rant' on trade in G7 session with world leaders
  • Now Trump is en route to Singapore for historic summit with North Korean leader Kim Jong Un on June 12
http://www.dailymail.co.uk/news/art...ned-G7-leaders-slams-meek-Justin-Trudeau.html
 

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'America stands with you, even if our president doesn't': John McCain says the majority of the US population is pro-free trade after Trump's latest salvo over tariffs at the G7 summit

  • McCain tweeted on Saturday in reaction to Trump's mounting trade feuds
  • Trump hurled insults at Canadian PM and rejected G7 joint communique
  • Demanded that Canada lower a 270% tariff on US dairy for relief on steel duties
  • Pew survey does say 56% of Americans agree free trade deals have been good
  • But support is sharply divided on partisan lines, not 'bipartisan' as McCain says
http://www.dailymail.co.uk/news/art...-says-majority-population-pro-free-trade.html
 

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Photo of Merkel, Trump Goes Viral

Newsweek
Gillian Edevane
13 hrs ago


© Bundesregierung/Jesco Denzel/Handout/Reuters German Chancellor Angela Merkel speaks to U.S. President Donald Trump during the second day of the G7 meeting in Charlevoix city of La Malbaie, Quebec, Canada, June 9, 2018.

German Chancellor Angela Merkel shared a picture on her official Instagram account that shows her staring down President Donald Trump during the G-7 Summit in Canada this weekend. True to form, online commenters have since turned the photo into a humorous caption contest.

Merkel—or an aide that runs her account—shared the picture on Saturday, as Trump was preparing to depart early from the meeting in Montréal, Quebec ahead of a high-stakes Singapore meeting with North Korean leader Kim Jong-un. The photo depicts Trump sitting behind a table with his arms crossed, while stony-faced aides and leaders look in his direction. Merkel looks especially peeved at the former business mogul, whose decision to raise tariffs on aluminum and steel rankled some foreign leaders ahead of the annual meeting.

Japanese Prime Minister Shinzo Abe is also in the photograph, standing with his arms crossed, while Trump’s national security adviser John Bolton stands nearby. The meeting also included Canada’s Justin Trudeau, France’s Emmanuel Macron, Italy's Giuseppe Conte and the U.K's Theresa May

Merkel's official caption is rather benign: "Day two of the G7 summit in Canada: Spontaneous meeting between two working sessions."

Many twitter users, however, had a deeper interpretation of the photograph. Merkel, arguably most powerful leader in Europe, has clashed with Trump numerous times. The two also share wildly different leadership styles. While Merkel takes a more traditional approach toward diplomatic relations, Trump, in contrast, has let his characteristic bluster lead the way, frequently speaking off the cuff and making disparaging remarks about other heads of state. Many—if not most—of the captions created by social media users riffed on that contentious dynamic.

Others, meanwhile, said the photo perfectly encapsulated what was a difficult summit for Trump, who reportedly told aides he didn't want to attend and who arrived late to the first working session—a meeting in which women's empowerment was on the agenda.

But the summit was off to a rough start before it even began, sparked by both Trump's unconventional leadership style and his May 31 announcement about tariff hikes. The president also said repeatedly he wanted to let Russia rejoin the G-7 Summit, despite it having been suspended following the 2014 annexation of Crimea from Ukraine.

During a solo press conference shortly before he departed, Trump rebuffed rumors that the atmosphere was anything but pleasant. Also true to form, he described the reports as "fake" news.

“I would say that the level of the relationship is a 10. We have a great relationship — Angela and Emmanuel [Macron] and Justin [Trudeau]. I would say the relationship is a 10."

He continued, blasting a CNN reporter.

"The relationship that I’ve had [with the other leaders] is great, so you can tell that to your fake friends at CNN," the president said.

http://www.msn.com/en-us/news/world/photo-of-merkel-trump-goes-viral/ar-AAyr0ub?ocid=ientp
 

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Putin on Trump’s call to have Russia back with G7: We never left
RT



Published on Jun 10, 2018
Russia has never turned its back on the G8 (now G7), Vladimir Putin said, speaking at the Shanghai Cooperation Organisation (SCO). The latter, however, is now stronger in some aspects, including power parity, he added. READ MORE: https://on.rt.com/9790
 

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Trump After G7 with audio compressed so you can hear reporter questions
Pirate Radio 9


Published on Jun 10, 2018
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'Amused Trump, and tired and doubfounded Merkel: Body language expert breaks down THAT famous photo from the G7 summit - and reveals how it shows what the world thinks of the U.S.

  • Patti Smith talked to DailyMail.com about the notorious and tense group photo
  • Says Trump's crossed arms show he has 'shut down from any other viewpoint'
  • And Merkel's defiant stance means she's likewise 'not going to change her mind'
  • Trump looks 'amused' by situation, while Merkel is 'fatigued and dumbfounded'
http://www.dailymail.co.uk/news/art...age-expert-breaks-famous-G7-summit-photo.html
 

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That picture looks staged. IMHO
 

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Merkel: G-7 summit with Trump was a 'sobering' experience

AP
10 hrs ago

FRANKFURT, Germany — German Chancellor Angela Merkel found the contentious Group of Seven summit with U.S. President Donald Trump a "sobering" and "depressing" experience but said European leaders won't be "taken advantage of" on trade.

She conceded in an interview on German public television Sunday that the meeting's outcome "wasn't a great thing."

"I have spoken of a sobering experience, which for me is a lot," she added.

Merkel, French President Emmanuel Macron and the other leaders clashed with Trump over steel and aluminum tariffs as well as his decision to abandon a deal with Iran to limit its nuclear program.

The group managed a common statement in which they agreed to disagree on some issues, only to have Trump disavow the document in a tweet after leaving the meeting.

Merkel said that "taking it back by tweet was of course sobering and also a little depressing."

She said the European Union would "act" against the U.S. trade measures, which European leaders regard as going against the rules of the World Trade Organization.

http://www.msn.com/en-us/news/world...s-a-sobering-experience/ar-AAytwie?ocid=ientp
 

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The Geostrategy That Guides Trump's Foreign Policies

by Tyler Durden
Sun, 06/10/2018 - 23:15


Authored by Eric Zuesse via The Strategic Culture Foundation,



According to Alastair Crooke, writing at Strategic Culture, on June 5th:

"Trump’s US aims for ‘domination’, not through the globalists’ permanent infrastructure of the US defence umbrella, but through the smart leveraging of the US dollar and financial clearing monopoly, by ring-fencing, and holding tight, US technology, and by dominating the energy market, which in turn represents the on/off valve to economic growth for US rivals. In this way, Trump can 'bring the troops home', and yet America keeps its hegemony [America’s control of the world, global empire]. Military conflict becomes a last resort.”​


He bases that crucially upon a landmark 6 November 2017 article by Chris Cook, at Seeking Alpha, which laid out, and to a significant extent documented, a formidable and complex geostrategy driving U.S. President Donald Trump’s foreign policies. Cook headlined there "Energy Dominance And America First”, and noted that,

“Towards the tail end of the Clinton administration and the Dot Com boom in 2000, [Trump’s U.S. Treasury Secretary until April 2018] Gary Cohn of Goldman Sachs had dinner with his counterpart at Morgan Stanley, John Shapiro. From this dinner was hatched an audacious plan to take control of the global oil market through a new electronic global market platform."

This “global market platform," which had been started months earlier in 2000 by Jeffrey Sprecher, is “ICE,” or InterContinental Exchange, and it uses financial derivatives in order to provide to Wall Street banks control over the future direction of commodites prices (so that the insiders can game the markets), by means of the financial-futures markets, locking in future purchase-and-sale agreements. It also entails Wall Street’s buying enormous commodities-storage warehouses and stashing them with such commodities -- such as, in that case, aluminum), and so it influences also the real estate markets, and doesn’t only manipulate the commodities markets. Those vast storehouses (and the operation of the U.S. Government’s Strategic Petroleum Reserve, to carry out a similar price-manipulation function in the oil business) are crucial in order for the entire scheme to be able to function, because without control over the storehousing of physical commodities, such futures-price manipulations aren't possible.

Consequently, ICE couldn’t get off the ground without major Wall Street partners, which are willing to do that. Cohn and Shapiro (Goldman, and Morgan Stanley) backed Sprecher’s operation; and Wikipedia states that,

"Wall Street bankers, particularly Goldman Sachs and Morgan Stanley, backed him and he launched ICE in 2000 (giving 80 percent control to the two banks who, in turn, spread out the control among Shell, Total, and British Petroleum)."

This is today’s financial world - a world in which billionaires control the future directions of commodities-prices, and thus manipulate markets, and even determine the economic fates of nations. It’s not the myth of capitalism; it is the reality of capitalism. It functions by means of corruption, as it always has, but the corrupt methods constantly evolve.

However, Trump’s geostrategy goes beyond merely this, especially by bringing into the entire operation the world’s wealthiest person, the trillionaire King Saud, who, as the sole owner of the Saudi Government, which in turns owns the world’s largest corporation Aramco, which in turn dominates the oil market and which is also #6 in the natural-gas market (far behind the three giants, which King Saud is trying to destroy — Russia, Iran, and Qatar — so that the Sauds will become able to dominate even there). Trump’s geostrategy ties King Saud even more tightly than before, into America's aristocracy.

King Saud, as Cook noted, is trying to disinvest in petroleum and reposition increasingly into natural gas, because outside the United States and around the world, people are seriously concerned to minimize global warming so as to postpone global burnout from uncontrollably soaring atmospheric carbon. Petroleum has an even worse carbon footprint than does natural gas; and therefore natural gas is the world’s “transition fuel” to a ‘survivable’ future, while solar and other alternatives take hold (even if too late). Despite all of the carbon-fuels industries’ propaganda, people outside the United States are determined to delay global burnout, and the insiders know this. King Saud knows that his petroleum-laden portfolio will have to diversify fast, because the long-term future for petroleum-prices is decline. And he won’t be able to control prices at all in the natural-gas business unless he’s got America’s aristocracy on his side, in the effort to keep those prices up (at least while the Sauds will be increasing their profits from natural gas). Unlike his dominance over OPEC, Saudi Arabia has no such position to control natural gas-prices. He thus needs Wall Street’s cooperation.

Cook said:

"The second objective was a switch from oil to natural gas, and when the U.S. [military] was obliged to leave Saudi Arabia, they [the U.S.] thereupon established their biggest regional base in Qatar, who co-own with Iran the greatest single natural gas reserve on the planet – South Pars.
Energy Dominance
In the four months since President Trump's announcement, the market strategy developed by Gary Cohn is now being implemented and its elements are emerging into view.
Firstly, there has been a massive inflow of Managed Money into the oil market, particularly the Brent contract, which has seen the Brent oil price increase by 35% since the starting point, which I believe can be dated to the August Brent/BFOE Crude Oil option expiry on June 27th 2017. …
The dominant market narrative is that the backwardation in Brent is evidence of surging global oil demand which has emptied inventories and is leading the price to new sunlit uplands. However, I see the market rather differently.
Firstly, whether the Brent spot month is supported by financial, rather than physical demand, the result will still be a backwardation, and because few oil producers expect a price over $60 to be sustainable they therefore hedge and depress the forward price. In support of this view, I am far from the only market observer who believes that Aramco, and Rosneft would not be selling equity if either Saudi Arabia or Russia believed the oil price trajectory will be positive even in the medium term. …
This still leaves open the $64 billion question of which market participant is motivated and able to support the ICE Brent term structure for years into the future by swapping dollar risk (T-Bills) for long term oil risk (oil reserves leased via prepay purchase/resale contracts).
My conclusion by a process of elimination is that this Big Long can only be Saudi Arabia and regional allies, with Saudi Arabia now under the management of the thrusting young Mohammad bin Salman."


However, I do not agree with Alastair Crooke’s “In this way, Trump can ‘bring the troops home', and yet America keeps its hegemony [America’s control of the world, global empire]. Military conflict becomes a last resort.” I explained at Strategic Culture on March 25th “How the Military Controls America” and noted there that “on 21 May 2017, US President Donald Trump sold to the Saud family, who own Saudi Arabia, an all-time-record $350 billion of US arms-makers’ products.” This means that not only Wall Street — the main institutional agency for America’s aristocracy — and not only American Big Oil likewise, are committed to the royal Saud family, but U.S. corporations such as Lockheed Martin also are. Vast profits are to be made, by insiders, in invasions and occupations, just as in gas and oil, and in brokerage.

Although Trump routinely talks about withdrawing U.S. troops, he does the exact opposite. And even if this trend reverses and America’s troop-numbers head down, while the U.S. economy becomes increasingly dependent upon Big Oil and Big Minerals and Big Money and Big Military, America’s military budget is, under Trump, the only portion of the entire U.S. federal Government that’s increasing; so, “Military conflict becomes a last resort” does not seem likely, in such a context. Rather, the reverse would seem to be the far likelier case.

War against King Saud’s chosen enemies (Iran, Qatar, Syria) and possibly even against the U.S. aristocracy’s chosen enemy, Russia (and against Russia’s allies: China, Iran, and Syria) — seems more likely, not less likely, with Trump’s geostrategy.

In fact, on 29 June 2017, when President Trump first announced his “Unleashing American Energy Event,” the President spoke his usual platitudes about the supposed necessity to increase coal-production, and what he said was telecast and publicized; but his U.S. Energy Secretary, the barely literate former Governor of Texas, Rick Perry, also delivered a speech, which was never telecast nor published, except that a few days later, on July 3rd, an excerpt from it was somehow published on the website of Liquified Natural Gas Global, and it was this:

“I want to address what Mr. Cohn was talking about from a standpoint of how important American energy is as an option, not as the only option, but as an option to our allies and to count[r]ies around the world.
At the G7 it was really kind of interesting. The first thing they beat on the table talking about the Paris accord, you can’t get out of it, and I was kind of like OK. Then we would go into our bilats and they’d go, how about some of that LNG you’ve got? How do we buy your LNG, how do we buy your coal? And it was really interesting, it was a political issue for them. This whole Paris thing is a public relation, political issue for them.
We made the right decision, the President made the right decision on this. I think it was one of the most powerful messages that early on in this administration that was sent.
We are in a position to be able to clearly create a hell of a lot more friends by being able to deliver to them energy and not being held hostage by some countries, Russia in particular. Whether it is Poland, Ukraine, the entirety of the EU. Totally get it, if we can lay in American LNG, if we can be able to have an alternative to Russian anthracite coal that they control in the Ukraine. That singularly will have more to do with keeping our allies free and building their confidence in us than practically anything else that I have seen out there. It is a positive message around the world right now.”


If that was more the reality of Trump’s “Unleashing American Energy” policy than just the pro-global-burnout cheerleading of Trump’s mere words, then it seems to be — in the policy’s actual intent and implementation — more like “send more troops in” than “bring the troops home,” to and from anywhere. It is more like energy policy in support of the military policy, than military policy in support of the energy policy.

This sounds even better for the stockholders of Lockheed Martin and other weapons-firms than for the stockholders of ExxonMobil and other extractive firms. On 6 March 2018, Xinhua News Agency reported that, “U.S. President Donald Trump's chief economic adviser Gary Cohn has summoned executives from U.S. companies that depend on aluminum and steel to meet with Trump this Thursday, in a bid to persuade the president to drop his tariff plan, media reported Tuesday.”

After all: Goldman has warehouses full of aluminum, and has the futures-contracts which already commit the Wall Street firm to particular manipulations in the aluminum (and other) markets. Controlling the Government so that it does only what you want it to do, and only when you want the Government to do it, is difficult. In any aristocracy, some members need to make compromises with other members, no matter how united they all are against the publics’ interests. This is the way it’s done - by compromises with each other.

https://www.zerohedge.com/news/2018-06-10/geostrategy-guides-trumps-foreign-policies
 

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CANADA SIGNALS IT WILL USE MILITARY EQUIPMENT TO RESIST US PROTECTIONIST MEASURES || WARTHOG 2018 \
Warthog Defense


Published on Jun 11, 2018
The Canadian government is sending a pointed message it is ready to use military equipment purchases as a wedge against U.S. protectionist actions.

By: David Pugliese

https://www.defensenews.com/air/2017/...
 

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Trump: Trudeau's criticism will cost Canada 'a lot of money' as president doubles down on trade war while praising Kim Jong-Un as smart, loved

  • Trump's war of words on Trudeau led critics to question why he was bashing a U.S. partner while appearing to cosy up to one of its bitterest long-time foes
  • Trump said he had a good relationship with Trudeau and Kim
  • He vowed U.S. allies will no longer take advantage of America on trade
  • He said Trudeau must not have known he was watching his post G7 presser: 'Justin probably didn't know that Air Force One has about 20 televisions'
  • Trump on Kim: 'He's got a great personality. He's a funny guy, he's very smart'
http://www.dailymail.co.uk/news/article-5834263/Trump-Trudeaus-criticism-cost-Canada-lot-money.html
 

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Senate Adds ZTE-Deal-Killing Amendment To "Must Pass" Defense Bill



by Tyler Durden
Tue, 06/12/2018 - 12:29


As was widely expected, a group of senators have successfully attached an amendment that would effectively kill the Trump administration's deal with Chinese telecoms firm ZTE to a "must-pass" defense authorization bill, according to Axios- the latest sign that the movement to kill the deal is gaining momentum, even among Republicans who rarely oppose the president. The measure has found support among a bipartisan group of Senators who claim that the ZTE deal poses potential national security problems, according to Democratic Sen. Chris Van Hollen, who introduced the amendment alongside Republican Sen. Tom Cotton. In addition, Van Hollen maintains that the ZTE deal is "genuinely a bad deal" that must be overturned.

The amendment to kill the deal, which was first unveiled last Thursday shortly after Commerce Secretary Wilbur Ross announced the administration had worked out a deal to save ZTE, would reimpose the White House's original ban on ZTE buying components from US firms (what some have described as a "death sentence" for the company). Still, the bill as amendment has a long way to go to make it out of the Senate, let alone the House, where it will likely face more intense opposition.

The White House announced the initial ban on ZTE buying parts from US firms in April, after the company was found to have violated a settlement originally imposed over ZTE's sales to Iran in defiance of US sanctions. As part of the original settlement, ZTE had agreed to fire certain senior managers and withhold bonuses from others. But the company didn't follow through with either promise.





Van Hollen told Axios that the administration has resisted Congress's push to make the ZTE penalty permanent almost since the beginning. After discovering that Van Hollen and others were planning a bill to make ZTE's punishment permanent, the administration "wanted to flout Congress's intent and decided to put its foot down on the accelerator" and announced its deal before the original amendment could be brought to a vote. President Trump first declared his intention to help save ZTE late last month with a tweet about "too many jobs in China lost." Still, since Trump's inauguration, only a handful of Republicans have voted against his agenda.

"China is using its telecommunications companies as means to conduct espionage," said Sen. John Cornyn (R., Texas). "We need to solve the larger puzzle of trade and national security in addition to the enforcement action for the violation of sanctions."But lawmakers aren't the only ones who are skeptical of ZTE. For years, defense officials have accused the telecoms giant and other Chinese firms of manufacturing equipment that could be used to spy on Americans, according to the Wall Street Journal.

Meanwhile, Commerce Secretary Wilbur Ross insisted the Trump administration's treatment of ZTE isn't part of a broader quid pro quo meant to achieve a better trade deal with China. Instead, Trump and his allies have insisted it was a gesture of goodwill to thank China for helping organize the Singapore summit with North Korea. Peter Navarro, a White House trade advisor, described the ZTE deal as a tough deal that would allow the company a last chance - but not without substantial cost.

"The president did this as a personal favor to the president of China as a way of showing some goodwill for bigger efforts, such as the one here in Singapore," Mr. Navarro said on Fox News Sunday. "But it will be three strikes you’re out for ZTE. And everybody understands that within this administration. So they’re on notice."

Per terms of the settlement, ZTE would pay a penalty of $1.3 billion (plus place another $400 million in escrow to be seized should the company again fail to hold up its end of the bargain). The company would also be forced to accept - and pay for - a team of compliance officers that will be led by a "special independent compliance coordinator" who will report jointly to ZTE's CEO, its board and the Commerce Department. The company will be forced to pay for the monitors for ten years. The company will also be required replace its entire board of directors and senior leadership team. In exchange, ZTE will resume buying products from US firms.

But if the measure does pass, we imagine it will set back the behind-the-scenes trade negotiations with China, despite Ross's insistence that the ZTE deal was "quite separate" from all that. Meanwhile, ZTE shares are set to begin trading in Hong Kong on Wednesday after a nearly two-month suspension, according to WSJ.

https://www.zerohedge.com/news/2018...d-kill-trumps-zte-deal-must-pass-defense-bill
 

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The Real Reason Trump Lost It With Trudeau?


by Tyler Durden
Tue, 06/12/2018 - 13:00


Authored by Patrick Buchanan via Buchanan.org,

At the G-7 summit in Canada, President Donald Trump described America as “the piggy bank that everybody is robbing.”

After he left Quebec, his director of Trade and Industrial Policy, Peter Navarro, added a few parting words for Prime Minister Justin Trudeau:

“There’s a special place in hell for any foreign leader that engages in bad faith diplomacy with President Donald J. Trump and then tries to stab him in the back on the way out the door. … And that’s … what weak, dishonest Justin Trudeau did. And that comes right from Air Force One.”​

In Singapore, Trump tweeted more about that piggy bank.

“Why should I, as President of the United States, allow countries to continue to make Massive Trade Surpluses, as they have for decades … (while) the U.S. pays close to the entire cost of NATO-protecting many of these same countries that rip us off on Trade?”​

To understand what drives Trump, and explains his exasperation and anger, these remarks are a good place to begin.




Our elites see America as an “indispensable nation,” the premier world power whose ordained duty it is to defend democracy, stand up to dictators and aggressors, and uphold a liberal world order.

They see U.S. wealth and power as splendid tools that fate has given them to shape the future of the planet.

Trump sees America as a nation being milked by allies who free ride on our defense effort, as they engage in trade practices that prosper their own peoples at America’s expense.

Where our elites live to play masters of the universe, Trump sees a world laughing behind America’s back, while allies exploit our magnanimity and idealism for their own national ends.

The numbers are impossible to refute and hard to explain.

Last year, the EU had a $151 billion trade surplus with the U.S. China ran a $376 billion trade surplus with the U.S., the largest in history. The world sold us $796 billion more in goods than we sold to the world.

A nation that spends more than it takes in from taxes, and consumes more of the world’s goods than it produces itself for export, year in and year out, is a nation on the way down.

We are emulating our British cousins of the 19th century.

Trump understands that this situation is not sustainable. His strength is that the people are still with him on putting America first.

Yet he faces some serious obstacles.

What is his strategy for turning a $796 billion trade deficit into a surplus? Is he prepared to impose the tariffs and import restrictions that would be required to turn America from the greatest trade-deficit nation in history to a trade-surplus nation, as we were up until the mid-1970s?

Americans are indeed carrying the lion’s share of the load of the defense of the West, and of fighting the terrorists and radical Islamists of the Middle East, and of protecting South Korea and Japan.

But if our NATO and Asian allies refuse to make the increases in defense he demands, is Trump really willing to cancel our treaty commitments, walk away from our war guarantees, and let these nations face Russia and China on their own? Could he cut that umbilical cord?

Ike’s Secretary of State John Foster Dulles spoke of conducting an “agonizing reappraisal” of U.S. commitments to defend NATO allies, if they did not contribute more money and troops.

Dulles died in 1959, and that reappraisal, threatened 60 years ago, never happened. Indeed, when the Cold War ended, out NATO allies cut defense spending again. Yet we are still subsidizing NATO in Europe and have taken on new allies since the Soviet Empire fell.

If Europe refuses to invest the money in defense Trump demands, or accept the tariffs America needs to reduce and erase its trade deficits, what does he do? Is he prepared to shut U.S. bases and pull U.S. troops out of the Baltic republics, Poland and Germany, and let the Europeans face Vladimir Putin and Russia themselves?

This is not an academic question. For the crunch that was inevitable when Trump was elected seems at hand.

He promised to negotiate with Putin and improve relations with Russia. He promised to force our NATO allies to undertake more of their own defense. He pledged to get out and stay out of Mideast wars, and begin to slash the trade deficits that we have run with the world.

And that’s what America voted for.

Now, after 500 days, he faces formidable opposition to these defining goals of his campaign, even within his own party.

Putin remains a pariah on Capitol Hill. Our allies are rejecting the tariffs Trump has imposed and threatening retaliation. Free trade Republicans reject tariffs that might raise the cost of the items U.S. companies makes abroad and then ships back to the United States.

The decisive battles between Trumpian nationalism and globalism remain ahead of us. Trump’s critical tests have yet to come.
And our exasperated president senses this.

https://www.zerohedge.com/news/2018-06-12/real-reason-trump-lost-it-trudeau
 

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The Trade War Begins: US Announces Target List On $50BN In Chinese Tariffs; China Vows Imminent Retaliation


by Tyler Durden
Fri, 06/15/2018 - 08:17


Update: China immediately vowed to retaliate to the trade war:
  • CHINA SAYS DOESN'T WANT TRADE WAR, BUT WILL HAVE TO RETALIATE
  • CHINA TO IMMEDIATELY TAKE MEASURES OF SAME SCALE AGAINST U.S.
  • CHINA COMMERCE MINISTRY SAYS THE MEASURES HARM INTERESTS ON BOTH SIDES

Earlier in the day, Chinese Foreign Ministry spokesman Geng Shuang told a regular daily news briefing said that “If the United States takes unilateral, protectionist measures, harming China’s interests, we will quickly react and take necessary steps to resolutely protect our fair, legitimate rights,”

* * *

At 8am EDT on Friday, as previewed extensively the the US formally announced the list of Chinese products to be hit with tariffs.

In the first official shot in the US-Chinese trade wars, the US will implement 25% tariff on $50BN in Chinese imports, representing 1,102 product lines with the list of imported goods among those listed on China’s 2025 plan.

The tariffs will be implemented in two tiers, the first one on July 6, and will cover $34BN in imports, and a second wave, which will cover the remaining $16BN, or 284 product lines, and will undergo further review in a public notice and comment process, including a hearing.

Today's official escalation followed the disclosure in April of a preliminary list targeting about 1,300 products worth $50 billion in Chinese imports, and which was subject to public comment.

Having warned earlier in the week that he would confront China “very strongly” over trade in the coming weeks, Trump this morning said in a statement that the “The United States can no longer tolerate losing our technology and intellectual property through unfair economic practices."

He added that “These tariffs are essential to preventing further unfair transfers of American technology and intellectual property to China, which will protect American jobs,” he said. “In addition, they will serve as an initial step toward bringing balance to the trade relationship between the United States and China.”

Some more details on the list of goods:

  • USTR SAYS LIST INCLUDES 1,102 PRODUCT LINES TOTALING $50B
  • USTR SAYS CHINA TARIFF LIST CONSISTS OF TWO SETS
  • USTR SAYS FIRST SET OF CHINA TARIFFS TO START JULY 6
  • USTR SAYS FIRST SET OF CHINA TARIFFS TO COVER $34B IN IMPORTS
  • USTR TO FURTHER REVIEW $16B IN IMPORTS IN 2ND WAVE OF TARIFFS

Just as notable, the US vowed to pursue more tariffs if China retaliates, which as we speculated, is the reason why the Trump admin also plans on releasing a list of $100BN in goods subject to tariffs, and which can be implemented as soon as 60 days.

The full statement by the President Regarding Trade with China is below:

My great friendship with President Xi of China and our country's relationship with China are both very important to me. Trade between our nations, however, has been very unfair, for a very long time. This situation is no longer sustainable. China has, for example, long been engaging in several unfair practices related to the acquisition of American intellectual property and technology. These practices, documented in an extensive report published by the United States Trade Representative (USTR) on March 22, 2018. harm our economic and national security and deepen our already massive trade imbalance with China.​
In light of China's theft of intellectual property and technology and its other unfair trade practices, the United States will implement a 25 percent tariff on S50 billion of goods from China that contain industrially significant technologies. This includes goods related to China's Made in China 2025 strategic plan to dominate the emerging high-technology industries that will drive future economic growth for China. but hurt economic growth for the United States and many other countries. The United States can no longer tolerate losing our technology and intellectual property through unfair economic practices.​
These tariffs are essential to preventing further unfair transfers of American technology and intellectual propertv to China. which will protect American jobs. In addition. they will serve as an initial step toward bringing balance to the trade relationship between the United States and China.​
The United States will pursue additional tariffs if China engages in retaliatory measures, such as imposing new tariffs on United States goods, services, or agricultural products: raising non-tariff barriers: or taking punitive actions against American exporters or American companies operating in China.​

And here is the full announcement from the US Trade Rep website:

SECTION 301 PRODUCT LIST

  • On April 3, 2018, USTR announced a proposed list of approximately 1,300 tariff lines valued at an estimated $50 billion. The list was published in the Federal Register on April 6, 2018.
  • To develop the initial proposed list, USTR worked with other agencies to identify products that serve to advance or unfairly benefit from China’s distortive industrial policies.
  • This proposed list underwent extensive public comment. Interested persons filed approximately 3,200 written submissions. In addition, USTR and the Section 301 Committee convened a three-day public hearing from May 15-17, 2018, during which 121 witnesses provided testimony and responded to questions.
  • USTR and the interagency Section 301 Committee have carefully reviewed the public comments and the testimony at the three-day public hearing. In addition, and in accordance with the President’s direction, USTR and the Section 301 Committee carefully reviewed the extent to which the tariff subheadings in the April 6, 2018 notice cover products containing industrially significant technology, including technologies and products related to the “Made in China 2025” initiative.
  • Based on this review process, the list of products announced today:
    • Removes 515 product lines from the initial proposed list;
    • Recommends adding 284 product lines to target products that benefit from China’s industrial policies;
    • Maintains 818 products lines from the initial proposed list unchanged.
  • The 284 product lines being proposed will now undergo further review in a public notice and comment process, including a hearing. After completion of this process, USTR will issue a final determination on the products that would be subject to the additional duties.
  • USTR will provide an opportunity for the public to request exclusion of a particular product from the additional 25 percent duty. USTR will publish the details of this product exclusion process in a subsequent Federal Register notice.

And now we wait China's retaliation.

https://www.zerohedge.com/news/2018...arget-list-chinese-goods-subject-50bn-tariffs
 

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Trump's trade war heats up: President approves tariffs on $50billion worth of Chinese imports that could come into force TODAY as world's second largest economy promises swift retaliation

  • Trump had warned of tariffs over Chinese theft of patents from US tech firms
  • Tariffs will target technologies where China hopes to become a world leader
  • Other items possibly included are flamethrowers, defibrillators and false teeth
  • Comes after Trump slapped steep tariffs on imported steel and aluminium imported from Canada, the EU and Mexico
http://www.dailymail.co.uk/news/art...es-tariffs-50billion-worth-Chinese-goods.html
 

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Canadians are shopping 'Trump free' by boycotting US goods, stores and cancelling vacations to the States in solidarity with Trudeau

  • Angry Canadians are buying homegrown products instead of US goods
  • Hashtags are trending on Twitter including #BuyCanadian and #BoycottUSA
  • Instead of Walmart and Starbucks, shoppers are buying locally-sourced goods
  • Others have cancelled their trips to the US and are venturing to parts of Canada
  • This is in retaliation to President Trump's trade war sparked after he called Prime Minister Justin Trudeau 'dishonest and weak'
http://www.dailymail.co.uk/news/art...otting-goods-stores-cancelling-vacations.html
 

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Trump Hits China With Tariffs, Vowing More If It Strikes Back
June 15, 2018 by Bloomberg



FILE PHOTO: Containers are seen at the Yangshan Deep Water Port in Shanghai, China April 24, 2018. REUTERS/Aly Song/File Photo

By Andrew Mayeda and Jenny Leonard (Bloomberg) — President Donald Trump’s administration moved the U.S. to the brink of a trade war with China, announcing tariffs on $50 billion in Chinese imports that America’s biggest trading partner has vowed to retaliate against.

In a statement Friday, Trump pledged additional tariffs if China follows through on the retaliation threats. The first set of tariffs will total $34 billion and take effect July 6, with another $16 billion still to be reviewed, the U.S. Trade Representative said in a separate statement. The USTR’s list includes 1,102 product lines.

“The United States can no longer tolerate losing our technology and intellectual property through unfair economic practices,” Trump said in the statement.

Criticism from business came swiftly and U.S. stock futures fell.

“Imposing tariffs places the cost of China’s unfair trade practices squarely on the shoulders of American consumers, manufacturers, farmers, and ranchers. This is not the right approach,” Thomas Donohue, president of the U.S. Chamber of Commerce, said in an emailed statement.

China, the world’s No. 2 economy behind the U.S., has pledged to retaliate on U.S. exports including soybeans and pork. The U.S. imported $505 billion of goods from China last year and exported about $130 billion, leaving a 2017 deficit of $376 billion, according to government figures.

Trump has frequently cited such an imbalance as the justification for a punitive trade policy toward China, Canada, Mexico, the European Union and other trading partners.

“These tariffs are essential to preventing further unfair transfers of American technology and intellectual property to China, which will protect American jobs,” the president said in his statement Friday. “In addition, they will serve as an initial step toward bringing balance to the trade relationship between the United States and China.”

The move is a response to the USTR’s so-called Section 301 investigation earlier this year that accused China of stealing U.S. intellectual property in an effort to dominate the development of advanced technology.

Trump is shaking up the world economic order with his zeal for tariffs and embrace of trade conflict. He threw a meeting of the Group of Seven into turmoil by revoking support for the group’s joint statement and berating the summit’s host, Canadian Prime Minister Justin Trudeau.

So far, the U.S. has imposed tariffs on steel and aluminum imports. Economists expect the direct impact on the U.S. economy to be modest. But if the president follows through on all the duties he’s threatened, including the tariffs against China, U.S. inflation could accelerate by 15 basis points, according to Goldman Sachs.

Trump’s tariffs may also influence his efforts to bring peace to the Korean peninsula. Beijing is an important player in talks with North Korea on abandoning its nuclear-weapons program.

The president has been under pressure from U.S. lawmakers over his decision to soften a penalty on Chinese telecom-equipment maker ZTE Corp. In April, the U.S. banned the ZTE from buying American technology for seven years, effectively putting the company out of business. But Trump said this month ZTE could avoid the ban if it paid at least $1 billion in penalties, among other things. U.S. senators are seeking ways to block the deal in Congress.

© 2018 Bloomberg L.P

http://gcaptain.com/trump-hits-china-with-tariffs-vowing-more-if-it-strikes-back/
 

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China Strikes Back At Trump Tariffs
June 15, 2018 by Bloomberg



Containership at port in the morning sun, Photo By Virojt Changyencham, Shutterstock

By Andrew Mayeda (Bloomberg) The Trump administration moved the U.S. to the edge of a trade war with China by announcing tariffs on $50 billion in Chinese imports and pledging additional investment restrictions, which Beijing immediately vowed to retaliate against.

The response from China signaled a rapid escalation of the dispute. The world’s No. 2 economy will impose tariffs with “equal scale, equal intensity” on imports from the U.S. and all of the country’s earlier trade commitments are now off the table, the Commerce Ministry said in a statement on its website late Friday. U.S. goods slated for levies include soybeans and corn, a potential blow to rural states that backed Donald Trump’s election in 2016.

Trump on Friday pledged more tariffs if China follows through on the retaliation threats, without specifying an amount. In April, he asked officials to consider an additional $100 billion in levies. Meanwhile, U.S. Trade Representative Robert Lighthizer said an announcement on U.S. investment restrictions on China will follow in the next two weeks.

“Our hope is that it doesn’t lead to a rash reaction from China,” Lighthizer said in an interview on Fox Business Network on Friday. “We hope that this leads to further negotiations and we hope it leads to China changing its policies, at least with respect to us, and opening up their market.”

The first wave of 25 percent tariffs will hit $34 billion in goods and take effect July 6, with another $16 billion still to be reviewed, the U.S. Trade Representative said in a separate statement.

The USTR’s final list includes 1,102 product lines, down from about 1,300 initially, mainly focused on China’s Made In 2025 plan to become dominant in high-technology industries such as robotics, aerospace, industrial machinery and automobiles. Consumer goods including mobile phones and televisions aren’t being hit with the tariffs.

Hours later — early Saturday in China — the nation’s Finance Ministry issued a list of 545 product categories, also covering about $34 billion in exports from the U.S., to be subject to an additional 25 percent tariff starting July 6. They included a variety of agricultural products, including soybeans, corn and wheat along with beef, pork and poultry, plus automobiles. A second set of tariffs to begin at a later date listed other goods including coal, crude oil, gasoline and medical equipment.

Trump defended his decision on Friday, saying the U.S. requires a fairer trade relationship with China as he played up his personal friendship with Chinese President Xi Jinping.

“Look, he’s my friend, President Xi. He’s a great man, he’s a wonderful guy, but at some point we have to straighten it out,” Trump said in an interview on Fox News. “So much of our secrets — you know, we have the great brainpower in Silicon Valley. And China and others steal those secrets, and we’re going to protect those secrets. Those are crown jewels for this country.”

U.S. and European stocks fell and bonds gained on the news.

By Andrew Mayeda and Jenny Leonard, Bloomberg

http://gcaptain.com/china-strikes-back-at-trump-tariffs/
 

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Wealthy Blue-Staters Are Using Shady Alaskan Trusts To Dodge SALT-Deduction Caps


by Tyler Durden
Sat, 06/16/2018 - 17:45


Wealthy Americans living in blue states are scrambling to find tax loopholes that will help them get around one of the most controversial (and for some, infuriating) provisions in President Trump's tax plan: The capping of the so-called SALT deduction. Enter real-estate planner Jonathan Blattmachr, who this week made the mistake of explaining to a Bloomberg reporter about a plan he's devised for his clients who are trying to get out of paying the additional taxes on their summer homes in the Hamptons or Cape Cod. According to the Bloomberg story, Blattmachr is planning on transferring the interest in his two New York residences - one in Garden City and one in Southampton - into LLCs, which he will then divide up into five separate trusts that will be based in Alaska. He can then use the trusts to take the maximum $10,000 deduction five separate times. In this way, he can deduct $50,000 in mortgage taxes from his federal tax bill instead of $10,000.

"This is an under-the-radar thing and it’s novel," said Blattmachr. (Or at least it was under-the-radar until you went blabbing to the media). The trusts that Blattmachr and other savvy estate planners are using to take advantage of this loophole are called non-grantor trusts. While trusts are typically used by the wealthiest Americans to preserve their wealth as it's handed down from generation to generation, the tax law is giving the merely wealthy an incentive to explore setting up these trusts to pay taxes at rates found in low-tax red states. The trusts can help property owners avoid paying an additional $100,000 in taxes across their properties.





However, the plan isn't practical for everybody, and even those who can reap the benefits over the long term must take an up-front risk because they must pay the maintenance costs for the trusts - which can be as high as $20,000 - up front. If the IRS ever issues guidance invalidating the loophole, there's no way to recover those costs.

Setting up dozens of non-grantor trusts for those with six-figure plus property taxes can be impractical and burdensome. Plus, those whose taxes are under six figures feel the new cap most acutely, according to Steffi Hafen, a tax and estate planning lawyer at Snell & Wilmer in Orange County, California. Those clients often have monthly mortgage payments that eat up a big chunk of their take-home pay, Hafen said.​
More than 10 percent of taxpayers in New Jersey will see a tax hike under the new law - the highest percentage in the U.S. - followed by Maryland and the District of Columbia at 9.4 percent, 8.6 percent in California and 8.3 percent in New York, according to an analysis earlier this year by the Tax Policy Center. Those who’ll pay more are mostly being affected by the state and local tax deduction limit.​
Mark Germain, founder of Beacon Wealth Management in Hackensack, New Jersey, said the strategy is "absolutely viable," adding that he has about a dozen clients who want to create non-grantor trusts.
Building and administering the trusts could cost about $20,000, according to Brad Dillon, a senior wealth planner at Brown Brothers Harriman. But those expenses would be justified after a few years, said Scott Testa, a lawyer who leads the estates and trusts tax practice at Friedman LLP in East Hanover, New Jersey.​

Already, it's unclear just how much longer individuals will be able to take advantage of the loophole. As Bloomberg explains, an existing provision in the US tax code could easily be revived to prohibit Americans from using trusts to avoid paying SALT taxes. Though it would take effort on the IRS's part.

Still, the Internal Revenue Service could issue guidance that would prevent taxpayers from using the trusts to get around the SALT cap. An existing provision says that multiple non-grantor trusts with identical beneficiaries and identical grantors - and whose primary purpose is to avoid taxes - can potentially be considered a single entity, with just one $10,000 SALT deduction. But the measure has never been bolstered by regulations, leaving it vague.​
That IRS provision could potentially derail the whole strategy, Dillon said. But compared to the other workarounds that have been proposed by high-tax states, the non-grantor trust "is the only one that’s come out of the fray that seems like a viable structure," Dillon said.​

Furthermore, people with large mortgages might have difficulty convincing their lender to allow them to transfer ownership over to an LLC.

The strategy isn't for everybody: People with large mortgages on their homes might not be able to win approval from the bank to transfer ownership to an LLC. Also taxpayers with a primary residence in Florida, which like Alaska doesn't have an income tax, can't take advantage of the scheme because of complex rules surrounding the state's homestead exemption.​

But for those who are curious, here's an in-depth explanation of how the process works:

Here’s how it works: First, you set up an LLC in a no-tax state such as Alaska or Delaware. Then, you transfer fractions of that LLC into multiple non-grantor trusts, which are trusts that are treated as independent taxpayers (unlike grantor trusts, where the person who creates them are generally taxed on the trust income). Each trust can take a deduction up to $10,000 for state and local taxes.​
If a spouse is designated as the beneficiary, another "adverse" party - meaning someone who may want the money also -- has to approve any distributions.​
Keep in mind that you no longer control or can benefit from anything placed in the trust. And you have to put investment assets in the trust that will generate enough income to balance out the $10,000 deduction. One option would be a vacation home that generates rental income, according to Steve Akers, chair of the estate planning committee at Bessemer Trust. Marketable securities could also work.​
Some caveats: If the home placed in the non-grantor trust is sold, the trust recognizes the gains on the sale and has to pay taxes on it - and it won’t be able to take advantage of a special home sale exclusion that’s available under a separate tax rule. For those with New York residences, putting the home in the LLC or the trust could potentially trigger the state’s 1 percent mansion tax, which is levied on sales of homes of at least $1 million.​

As we pointed out earlier this year (citing research from BAML), the Northeast and West coast - traditionally liberal bastions and, according to some, explicitly targeted by the Trump administration - generally have higher average amounts and will feel most of the pain. The chart below shows a heat map for average amount claimed under SALT deductions, with redder states farther above $10k and greener states below.



For those who are still getting up to speed on the new tax law, Goldman offered this guide earlier in the year to the most important provisions. Of course, estate planners aren't the only ones searching for loopholes. Several blue-state governors have threatened "economic civil war" on Washington by devising loopholes for their residents that will allow them to take advantage of a "charitable" fund being set up by certain states that will essentially allow them to convert some of their taxes into charitable contributions that can still be deducted from their federal tax bill. However, the IRS has already warned states not to try and circumvent the SALT deduction caps. The retaliation has sent state lawmakers scrambling for an alternate solution. As next year's tax deadline draws closer, expect the conflict between blue states and the federal government to intensify.


https://www.zerohedge.com/news/2018...hady-alaskan-trusts-dodge-salt-deduction-caps
 

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China’s Tariffs on U.S. Oil to Disrupt $1 Billion Per Month Business
June 18, 2018 by Reuters



Photo: By Matej Kastelic / Shutterstock




By Henning Gloystein SINGAPORE, June 18 (Reuters) – China’s threat to impose duties on U.S. oil imports will hit a business that has soared in the last two years, and which is now worth almost $1 billion per month.

In an escalating spat over the United States’ trade deficit with most of its major trading partners, including China, U.S. President Donald Trump said last week he was pushing ahead with hefty tariffs on $50 billion of Chinese imports, starting on July 6.

China said Friday it would retaliate by slapping duties on several American commodities, including oil.

Investors expect the spat to come at the expense of U.S. oil firms, pulling down the share prices of ExxonMobil and Chevron by 1 to 2 percent since Friday, while U.S. crude oil prices fell by around 5 percent.

“This escalation of the trade war is dangerous for oil prices,” said Stephen Innes, head of trading for Asia/Pacific at futures brokerage OANDA in Singapore.

“Let’s hope cooler heads prevail, but I’m not overly optimistic,” he added.

The dispute between the United States and China comes at a pivotal time for oil markets.

Following a year and a half of voluntary supply cuts led by the Middle East-dominated Organization of the Petroleum Exporting Countries (OPEC), as well as the non-OPEC producer Russia, oil markets have tightened, pushing up prices.

The potential drop-off in American oil exports to China would benefit other producers, especially from OPEC and Russia.

The OPEC kingpin Saudi Arabia and Russia indicated on Friday they would loosen their supply restraint and were starting to raise exports.

A cut in Chinese purchases of U.S. oil may also benefit Iran’s sales, which Washington is trying to curb with new sanctions it announced in May.

“The Chinese may just replace some of the American oil with Iranian crude,” said John Driscoll, director of consultancy JTD Energy Services.

“China isn’t intimidated by the threat of U.S. sanctions. They haven’t been in the past. So in this diplomatic spat they might just replace U.S. crude with Iranian oil. That would obviously infuriate Trump,” he said.

BOOMING BUSINESS
China’s aggressive riposte to Trump took some in the industry by surprise.

U.S. crude exports to China have been rising sharply, thanks to a production surge in the past three years that was a welcome alternative to make up for the cut in supplies from OPEC and Russia.

“We’re caught by surprise that crude oil is on the list,” said an official with a Chinese state oil major, asking not to be named as he was not authorized to speak to media.

“We were actually preparing to raise imports according to an earlier government line,” he added, referring to a Beijing policy enacted earlier this year to help reduce the U.S. trade deficit with China.

See Also: The Not-So-Surprising Commodity Excluded from China’s Tariff List

U.S. oil exports, which have been surging thanks to a sharp increase in production in the past three years, were seen as a viable alternative to make up for the cut in supplies from OPEC and Russia.

Shipping data in Thomson Reuters Eikon shows that U.S. crude oil shipments to China have soared in value recently, jumping from just $100 million per month in early 2017 to almost $1 billion per month currently.

The threatened tariff would make U.S. oil more expensive versus supplies from other regions, including the Middle East and Russia, and likely disrupt a business that has soared recently.

“With Trump’s politics, we’re in a world of re-aligning alliances. China will not just swallow U.S. tariffs,” said Driscoll.

“This is tit-for-tat petroleum diplomacy,” he added. “The OPEC/non-OPEC cartel is the big beneficiary of all this oil diplomacy, as it will squeeze global spare oil capacity and likely push up crude prices.”

(Reporting by Henning Gloystein in SINGAPORE Additional reporting by Aizhu Chen in BEIJING; Editing by Philip McClellan)

(c) Copyright Thomson Reuters 2018.

Read Next: China a Big Win for U.S. East Coast Ports

http://gcaptain.com/chinas-tariffs-on-u-s-oil-to-disrupt-1-billion-per-month-business/
 

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Trump ups the ante and moves towards a trade war with China by threatening tariffs on $200billion worth of imports

  • Trump moved toward preparing new tariffs on $200B Chinese imports Monday
  • The tariffs would be the latest round of punitive measures in an escalating dispute over the large trade imbalance between the US and China
  • Trump recently ordered tariffs on $50B in Chinese goods in retaliation for intellectual property theft
  • China retaliated by raising import duties on $34billion worth of American goods, including soybeans, electric cars and whiskey
http://www.dailymail.co.uk/news/article-5857645/Pompeo-China-engaging-predatory-economics-101.html
 

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NEW U.S. ‘SPACE FORCE’ WOULD ADD TO ALREADY STRETCHED DEFENSE BUDGET || WARTHOG 2018
Warthog Defense


Published on Jun 19, 2018
President Donald Trump’s push to establish a sixth military branch dedicated to space would probably be a lot more expensive than just extending the U.S. Air Force’s capabilities -- and no doubt the nation’s largest defense contractors love that idea.

By Justin Bachman

https://www.bloomberg.com/news/articl...
 

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China Accuses U.S. of Initiating Trade War as Trump Issues New $200 Billion Threat
June 19, 2018 by Reuters



donvictorio / Shutterstock




By Michael Martina and Eric Beech BEIJING/WASHINGTON, June 19 (Reuters) – U.S. President Donald Trump threatened to impose a 10 percent tariff on $200 billion of Chinese goods and Beijing warned it would retaliate, in a rapid escalation of the trade conflict between the world’s two biggest economies.

Trump’s latest move, as Washington fights trade battles on several fronts, was unexpectedly swift and sharp.

It was retaliation, he said, for China’s decision to raise tariffs on $50 billion in U.S. goods, which came after Trump announced similar tariffs on Chinese goods on Friday.

“After the legal process is complete, these tariffs will go into effect if China refuses to change its practices, and also if it insists on going forward with the new tariffs that it has recently announced,” Trump said in a statement on Monday.

The comments sent global stock markets skidding and weakened both the dollar and the Chinese yuan on Tuesday. Shanghai stocks plunged to two-year lows.

China’s commerce ministry said Beijing will fight back with “qualitative” and “quantitative” measures if the United States publishes an additional list of tariffs on Chinese goods.

“Such a practice of extreme pressure and blackmailing deviates from the consensus reached by both sides on multiple occasions,” the ministry said in a statement.

“The United States has initiated a trade war and violated market regulations, and is harming the interests of not just the people of China and the U.S., but of the world.”

U.S. business groups said members were bracing for a backlash from the Chinese government that would affect all American firms in China, not just in sectors facing tariffs.

Jacob Parker, vice president of China operations at the U.S.-China Business Council in Beijing, said China would undoubtedly “begin looking at other ways to enforce action against U.S companies that are operating in the market.”

Some companies have reported Beijing is meeting with Chinese businesses to discuss shifting contracts for U.S. goods and services to suppliers from Europe or Japan, or to local Chinese firms, Parker said.

Washington and Beijing appeared increasingly headed toward open trade conflict after several rounds of talks failed to resolve U.S. complaints over Chinese industrial policies, lack of market access in China and a $375 billion U.S. trade deficit.

U.S. Trade Representative Robert Lighthizer said his office was preparing the proposed tariffs and they would undergo a similar legal process as previous ones, which were subject to a public comment period, a public hearing and some revisions. He did not say when the new target list would be unveiled.

“As China hawks, like Lighthizer and (Peter) Navarro, appear to have gained power within the Trump administration lately, an all-out trade war now seems more inevitable,” said Yasunari Ueno, chief market analyst at Mizuho Securities in Japan.


TIT-FOR-TAT
On Friday, Trump said he was pushing ahead with a 25 percent tariff on $50 billion worth of Chinese products, prompting Beijing to respond in kind.

Some of those tariffs will be applied from July 6, while the White House is expected to announce restrictions on investments by Chinese companies in the United States by June 30.

“China apparently has no intention of changing its unfair practices related to the acquisition of American intellectual property and technology. Rather than altering those practices, it is now threatening United States companies, workers, and farmers who have done nothing wrong,” Trump said.

Trump said if China increases its tariffs again in response to the latest U.S. move, “we will meet that action by pursuing additional tariffs on another $200 billion of goods.”

Trump said he has “an excellent relationship” with Chinese President Xi Jinping and they “will continue working together on many issues.”
But, he said, “the United States will no longer be taken advantage of on trade by China and other countries in the world.”


COOLING CHINESE ECONOMY
The intensifying trade row threatens to put more pressure on the already cooling Chinese economy, risking an end to a rare spell of synchronized global expansion and collateral damage for its export-reliant Asian neighbors.

China’s central bank unexpectedly injected 200 billion yuan ($31 billion) in medium-term funds into the banking system on Tuesday in a move analysts said reflected concerns about liquidity but also the potential economic drag from a full-blown trade war.

China imported $129.89 billion of U.S. goods last year, while the U.S. purchased $505.47 billion of Chinese products, according to U.S. data.

Derek Scissors, a China scholar at the American Enterprise Institute, a Washington think tank, said that means China will soon run out of imports of U.S. goods on which to impose retaliatory tariffs.

China was unlikely change its industrial policies in response to the U.S. trade threats, he said. That could take a long and painful trade fight.
“As I’ve said from the beginning, China will back off its industrial plans only when U.S. trade measures are large and lasting enough to threaten the influx of foreign exchange. Not due to announcements,” he said. ($1 = 6.4462 Chinese yuan)

(Reporting by Eric Beech and David Lawder in WASHINGTON; Michael Martina and Ben Blanchard in BEIJING; Additional reporting by Lee Chyen Yee in Singapore Writing by Tony Munroe; Editing by Cynthia Osterman, Sandra Maler & Kim Coghill)

(c) Copyright Thomson Reuters 2018.

http://gcaptain.com/china-accuses-u...e-war-as-trump-issues-new-200-billion-threat/
 

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Senate Votes to Give Military $700 Billion
RT America



Published on Jun 20, 2018
The US senate voted to give the military over $700 billion for the 2019 budget - making this the largest approved defense budget in modern American history. Many economists and lawmakers say they're not happy with the move. RT America's Ashlee Banks reports.
 

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Trump to Propose Government Reorganization, Targeting Safety Net Programs

NYT
By GLENN THRUSH and ERICA L. GREEN
12 hrs ago



WASHINGTON — President Trump plans to propose a reorganization of the federal government as early as Thursday that would shuffle key community development, housing and food programs to new departments, where they could be easier to cut or contain, according to administration officials briefed on the proposal.

The plan, which will most likely face significant opposition in Congress from Democrats and some Republicans, includes relocating many social safety net programs into a new megadepartment, which would replace the Department of Health and Human Services and probably include the word “welfare” in its title.

Mr. Trump and his budget director, Mick Mulvaney, the architect of the plan, have sought to redefine as welfare subsistence benefit programs like the Supplemental Nutrition Assistance Program, or SNAP, and housing aid. It is part of a rebranding effort, championed by conservative think tanks and House Republicans, to link them to unpopular direct-cash assistance programs that have traditionally been called welfare.

“They have been using the word welfare because it is pejorative,” said Elaine Waxman, a senior fellow in the Income and Benefits Policy Center at the Urban Institute, a nonpartisan Washington think tank. “The programs you can call welfare are actually very small in comparison to SNAP, which is an income support necessary to help families, workers and millions of kids.”

At the heart of the plan is an attempt to shift SNAP, which serves more than 42 million poor and working-class Americans, to the new agency from the Agriculture Department. Conservative think tanks, including the Heritage Foundation and Koch-related entities, have long sought to de-link food aid from agriculture in hopes of cutting costs.

Senate Republicans, who have already rejected a more modest Trump administration attempt to increase work requirements for SNAP recipients, are unlikely to sign off on the proposed shift, which was first reported by Politico.

As recently as earlier this month, Mr. Mulvaney was also considering merging the Labor and Education Departments, either in the new welfare agency or in a new stand-alone department, according to a person with knowledge of his plans.

Calls to the White House and its budget office were not immediately returned.

The recommendations also include a number of less contentious proposals to streamline the government.

Mr. Mulvaney’s proposal is, in part, a back-to-the-future bureaucratic move. From 1953 to 1979, the Department of Health, Education and Welfare housed most of the nation’s social welfare and economic support programs. It was abolished by Congress under President Jimmy Carter, and split into the Department of Health and Human Services and the Department of Education, in recognition that no single department could manage all of the old department’s functions.

Another proposal included in a draft circulated to officials last week is an attempt to move the $3 billion Community Development Block Grant Program to the Department of Commerce from the Department of Housing and Urban Development, an official said.

This year, Mr. Mulvaney zeroed out funding for the grant program, which provides a broad and flexible funding pool for an array of community development, only to have Senate Republicans restore the cuts.

An adviser to a senior Senate Republican said the move to the Commerce Department was an attempt to strangle the program by removing it from career HUD officials who were more sympathetic to the demands of impoverished communities than Commerce Department officials.

Conservatives have been agitating to remove development programs from HUD for years. In 2006, aides to President George W. Bush unsuccessfully pushed to shift 18 programs to the Commerce Department.

Under Mr. Trump’s plan, HUD would gain control over the Agriculture Department’s rural housing program. A proposal to shift veterans’ housing to HUD was considered but rejected, according to an administration official with knowledge of the plan.

The Education Department has been eyeing several programs run by the Labor Department that it believes it would run more effectively, according to an extensive proposal drafted by Education Department officials last fall, and obtained by The New York Times in March.

Among the proposals in that plan was for the Education Department to reroute funding from the Labor Department’s program for adult and dislocated workers to invest in federal financial aid grants for the unemployed to use at short-term job training programs. The Education Department also proposed to take over some administration of an overhauled H1-B visa program for skilled workers to enter the United States, allowing it to use visa fees to bolster science, technology, engineering and math education.

The proposed merger of the Education and Labor Departments was first reported by Education Week.

Mr. Mulvaney and White House officials have closely guarded details of their plan, sharing them with political appointees but not career staff members at cabinet departments.

Administration officials said the blueprint for the plan was a 2017 list of reorganization recommendations produced by the conservative Heritage Foundation.

The group’s wish list includes the elimination of a handful of well-known federal programs, including the Consumer Financial Protection Bureau, the Corporation for Public Broadcasting and the Export-Import Bank. It was not clear if Mr. Mulvaney had adopted those suggestions. But he is expected to propose far-reaching overhauls to the consumer bureau, which he runs as a second job.

http://www.msn.com/en-us/news/polit...ing-safety-net-programs/ar-AAyVpwQ?ocid=ientp
 

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Senate Passes Fiscal Year 2019 Defense Authorization Bill

By: Ben Werner
June 19, 2018 3:26 PM


The U.S. Senate passed its version of the Fiscal Year 2019 defense authorization bill, setting the stage for negotiations with members of the House of Representatives to create a unified set of policy and spending priorities to approve later this year.

Named for Sen. John S. McCain (R-Ariz.), the chair of the Senate Armed Services Committee, and passed by a bipartisan vote of 85-10, the Senate National Defense Authorization Act sets a variety of defense policy and spending priorities, including accelerating missile defense, ship and submarine building and military research and development.

The Senate bill authorizes $23.1 billion for shipbuilding, including fully-funding the purchase of 10 battle-force ships and authorizes work developing the Columbia-class of nuclear ballistic missile submarine (SSBN-826). Funding for the Littoral Combat Ship is limited to one hull by the Senate bill until the Pentagon provides more information related to the transition to future guided-missile frigate (FFG(X)).

The bill also authorizes increasing military personnel totals, including setting a new Navy end strength level of 331,900 active duty personnel. Currently, the Navy reports having 325,673 active duty personnel, including 4,398 Midshipmen at the U.S. Naval Academy.

In terms of policy, the Senate bill authorizes the Navy’s adoption several readiness provisions included in the Surface Warfare Enhancement Act of 2018, which was passed in the wake of last year’s deadly collisions between USS John S. McCain (DDG-56), USS Fitzgerald (DDG-62) a pair of commercial ships.

“I am proud that the Senate voted overwhelmingly to pass the National Defense Authorization Act and I’m deeply humbled that my colleagues saw fit to do me the undeserved honor of designating it in my name,” McCain said in a statement. “This legislation continues our reform agenda and helps better position the Department of Defense and the joint force to implement the National Defense Strategy by continuing to restore readiness, rebuild capacity, and modernize capabilities.”

Some Senate priorities differ from those approved by the House. For instance, the Senate authorizes $7.5 billion to purchase 75 F-35 Lighting II Joint Strike Fighters, which is two-fewer than what House members authorized in their bill. The House bill also includes a provision allowing the Pentagon to purchase more F-35 aircraft if the program can save enough money through production efficiencies and other cost savings work.

https://news.usni.org/2018/06/19/senate-passes-fiscal-year-2019-defense-bill
 

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Cash-strapped Coast Guard has spent $20 MILLION and counting on patrolling the waters off Mar-a-Lago when Trump visits 'Winter White house'

  • President Donald Trump has taken 16 trips to the Florida resort he owns
  • Secret Service patrols the waterways every time he is there
  • He also gets air support including a Coast Guard helicopter
  • Armed Coast Guard vessels patrol the waters
  • Costs do not include salaries and other expenses
  • Trump frequently golfs there and brings family members along with him
  • Trump also visits his clubs in Virginia and New Jersey
http://www.dailymail.co.uk/news/art...LION-counting-patrolling-waters-Mar-Lago.html
 

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Trump threatens 20 per cent tariffs on cars built in the European Union fuming 'build them here!' in latest trade war threat against an ally

  • The swipe came hours after the EU slapped $3.3 billion tariffs on U.S. products
  • Europe was responding to Trump's tariffs on steel and aluminum
  • Trump blasted EU tariffs on U.S.-manufactured
  • Said if they are not removed soon the U.S. would put tariffs on 'all of their cars'
  • The administration has been looking at same national security exception used to impose steel tariffs
  • 'Build them here!'
  • European auto companies have set up factories in the U.S. to reach the market
http://www.dailymail.co.uk/news/article-5872033/EU-slaps-tariffs-US-trade-war-erupts.html
 

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Singapore, Trade, And Geopolitics: "Nothing Short Of A Nuclear War Can Stop This"


by Tyler Durden
Fri, 06/22/2018 - 19:45


Authored by Alasdair Macleod via GoldMoney.com,

The Western media was incredulous. The Donald had disregarded diplomacy, scuttled out of the G7 meeting in Canada without endorsing the G7 agreement, and ended up shaking hands with a previously avowed enemy in Singapore. The formally leisurely pace of global diplomacy, where all is pre-agreed before the photo-op showing unanimity of leadership, was ditched in favour of the Art of the Deal. Foreign correspondents for the established media were confused and obviously out of their depth, particularly over the deal with President Kim Jong-un.




As a female journalist pointed out at the press conference after the meeting, Kim has proven to be ruthless and untrustworthy, killing members of his own family and imprisoning and torturing his own people. How could Trump possibly come to terms with him, and concede, apparently without consulting South Korea, to suspend joint exercises, and agree to the objective of a complete denuclearisation of the peninsular, which is the implication of the eventual withdrawal of American forces entirely from the South?

The Singapore deal was in fact not a deal, but an endorsement of the earlier agreement between the two Koreas at Panmunjom on 27th April. And this is the point, Singapore was the US confirming it accepted Panmunjom.

The razzmatazz of a Singaporean summit plays well to Trump’s electoral base, as did his disdain for G7 and his trashing of Trudeau, who he described as “very dishonest and weak” over trade. Trump’s supporters also buy into his fake-news accusations, conveniently placing him beyond criticism so far as they are concerned. Now they are seeing concrete results from the man they elected President, ahead of the mid-term elections in November.

We need to look into the North Korean situation with greater objectivity, before commenting on recent trade policy developments.

Korea and its economic role in Asia
The Panmunjom Agreement was an agreement between the two Koreas only. No other powers are a party to it. That was why Singapore had to endorse it, China having already done so. Essentially, it was the graceful way for everyone to back out of an intractable position, dressed up as a victory for Trump, whereas in truth it is also a thorn in China’s side being removed.

North Korea has a far longer border with China than with South Korea. Having a totalitarian state on her eastern flank was never ideal, even though it acted as a buffer between China and the Americans in South Korea. The similarities with the earlier case of the Iron Curtain in Europe in the late eighties are striking. On one side there was growing capitalist prosperity, widening the gulf with socialist stagnation on the other. China could tolerate it today, but Kim would have been increasingly aware that time was running out for his government, just as Secretary-General Gorbachev recognised it when he proposed the historic meeting in Reykjavik with President Reagan in October 1986.

Events at that time moved quickly, even though the Reykjavik meeting ended without a formal agreement. Twenty-five months later, the Berlin Wall dramatically fell, symbolically marking the end of seventy years of Soviet communism. Those same economic tensions exist between China and North Korea today. North Korea’s bankruptcy means that it has not the economic resources to continue with its nuclear program to credible effect. Kim was forced to come to an agreement with China as a way out of his difficulties, and that is why he visited Beijing to meet President Xi one month before Panmunjom.

Trump’s Singaporean summit was an admission that China holds the winning cards over Korea, and that America will be forced to withdraw its military from the East Asian landmass. It signals something else, and that is the neo-cons have lost much of their influence in Washington. Trump is succeeding in bringing the administration under his control with respect to foreign policy. We see this with the court cases over Russian interference in the presidential election fizzling out, and attention switching towards allegations against the Clintons. Rather cleverly, Trump is manoeuvring himself into a convincing position ahead of the mid-term elections.

So far as China is concerned, it is also a strong win. In the east, at least, she has secured herself against a US military presence, which will retreat to Japan and her islands. And even Japan realises her future is increasingly China-related. The industrialisation of North Korea will bring significant economic benefits to China as well, just as the development of Eastern Europe did to Germany.

Trade tariffs
There seems little doubt that Trump is playing the trade tariff card strongly, because of the mid-term elections. Recently I was on a television panel with Steve Malzberg, the American journalist and TV presenter close to the Republican camp, who was adamant that Trump was just delivering on his election promises.


It is important to understand this is his overriding motivation, but it is not necessarily the advice he gets from Larry Kudlow, his economic adviser.

Kudlow was an economist in the Reagan administration, with Professor Steve Hanke of John Hopkins University. Hanke wrote a Forbes article at the time of Kudlow’s appointment, pointing out that he, Kudlow (and also Reagan) were free-traders. Hanke’s knowledge of Kudlow’s true understanding of economics is personal. We can therefore assume that Kudlow would have informed Trump of the errors of tariffs, which are not difficult to explain and understand.

Trump’s spats with Canada and the EU over tariffs at the G7 were interesting in this regard. Trump was talking about tariffs imposed against America being an obstruction to free trade, a subtle but important difference from his protectionist trade policy originally set out as central to his mandate to Make America Great Again. There is further evidence of this from part of the transcript of an interview Kudlow gave on CNN on 10th June:

TAPPER: We acknowledge that free, fair and mutually beneficial trade and investment, while creating reciprocal benefits, are key engines for growth and job creation. We strive to reduce tariff barriers, non-tariff barriers and subsidies. We call for the start of negotiations this year to develop stronger international rules on market-distorting industrial subsidies and trade-distorting actions by state-owned enterprises.
That is what President Trump believes in.
KUDLOW: Yes.​

There can be little doubt, based on the events at G7 and Kudlow’s comments, that Trump has indeed quietly modified his position on trade. And it is notable that his intended introduction of tariffs against China focuses on products that the Chinese will support under their “Made in China 2025” policy. This policy, which has similarities with Germany’s “Industry 4.0” plan adopted in 2013, is broader. Germany’s plan was to encourage SMEs to interconnect in their production chains in order to improve output, quality and production efficiency. China’s plan is to do the same, and also to improve intellectual property protection for SMEs. The state will provide up to 40 innovation hubs, but companies will be encouraged to operate on more market-based standards. In the context of a mercantile economy, this policy is designed to ensure the country’s industrial sector is world-standard for not only China’s growing middle classes, but also competitive abroad in terms of quality rather than on price.

The problem with it is America’s suspicion that the 2025 policy is intended to be protectionist. A target in the plan is for 70% “self-sufficiency” in components in advanced technologies. Foreign-owned manufacturers may feel shut out of production chains except for minor roles. Chinese corporations are also actively acquiring foreign-owned businesses for their technology, which can then be transferred to China.

Allegations over state-sponsored behaviour include forced technology transfer agreements, commercial espionage and patent infringements.
Trump is promoting his trade war with China as against trade that is not free, whereas the issue is considerably more complex. Trump was elected on a protectionist ticket, while China has benefited from free trade. Trump was elected as a nationalist, while China merely has a national strategy. That strategy is to evolve her economy from being a manufacturer of standard goods to become the Germany of the East – hence the interest in Germany 4.0. By 2025, China intends to have only a residual interest in her current export lines to the US, and all foreign manufacturers will have relatively free market access to China’s markets for finished products. But with China’s 45%-50% savings rate, even if the 2025 plan did not have the 70% self-sufficiency target in place, it is hard to imagine in practice it would be any less.

The Chinese could therefore easily concede this target and be persuaded that aggressive moves to transfer technology and infringe international patents are unnecessary. That is the climb-down Trump presumably aims to achieve. But he has to be careful, because American corporations have much to lose. Already, US based manufacturers of goods incorporating tariffed steel and aluminium have been placed at a disadvantage against foreign competition. General Motors, Ford and Chrysler may now find it more profitable to beef up their Mexican operations for export-related production, relative to existing facilities in the US.

By 2025, the really serious game on the world stage will be a Eurasia-wide infrastructure play with a market currently covering 4.62 billion souls (67% of the global total), where China and Russia will be the ringmasters. There is nothing, short of a nuclear war, the US Government can do to stop it. That is the reality that is now accepted in Washington, and perhaps in Langley as well, given that the stuck-in-the-mud neo-cons are now being side-lined.

That being the case, will America retreat into isolationism,
or does she, through realistic foreign policies, maximise the opportunities for US-owned businesses in Asia?​

These outcomes are very different.

That make-your-mind-up-time for America is rapidly approaching, and surely, the Donald knows it. He needs to back down from trade wars even more than China.

https://www.zerohedge.com/news/2018...eopolitics-nothing-short-nuclear-war-can-stop