Trump’s trade talks are simple, if you want a strong US

As I wrote in the late spring when the tariff war talk started, this is truly the art of the deal for President Trump.

By the actions of numerous previous administrations, the world and China particularly, took on the task of being our manufacturing base for better or worse.

So Trump said if they have to sell to us, which they do, then we need to get better terms. A business mentality, not a pie-in-the-sky globalist view of trade.

Look no further than the deal Trump has worked out with the EU. Trump told EC president Jean-Claude Juncker, if you want Mercedes and BMWs in our driveways, then you have to give us this and this. Leveling the playing field had to win the day, the Germans had too much riding on staying competitive with their cars.

Look at China as the perfect example. Since the initial $50 billion in tariffs was floated, its stock market has tanked and its currency, the yuan, has cratered to a 13-month low. This despite the yuan being pegged to the US dollar, which has not moved that much over the same time frame.

China has far too much invested in migrating its people from the countryside to the cities to create its nascent middle class of manufacturing workers to walk away from US trade.

Is Foxconn going to sell knockoff iPhones to Nokia?

To be honest it’s not even a fair negotiation on these tariff talks. Oh, sure China and the EU can be boastful and full of bluster about Trump’s tactics, but at the end of the day these products need to be here or else those widgets have no other natural market on the scale of the US.

Anyone of the last five presidents could have done this deal if they wanted to, but that’s the problem, they didn’t. They were beholden to globalist espousing one world government and currency.

So if you come at trade from an America First point of view, you get the best terms possible, like the EU paying us to ship their cars to the US, which is essentially what this new deal is because they took tariffs off our exports to the continent.

It’s really easy to get your terms when you acknowledge that there are borders to countries and they are there for a reason and we will defend ours both economically and militarily.

China has seen that and right after Labor Day it will capitulate to our terms in order to feed their people over the winter. Trust me on this, as Trump  says.

Advertisements

It’s about time we have a president to take EU to task over NATO spending

I have to tell you again, that it is so refreshing to have a president go over to the EU and call them out for their hypocrisy.

Case in point: The US pays on average 67% of NATO’s defense spending and where is a majority of that spending still directed too? Defending the EU against Russian aggression.

In 2017, NATO countries contributed $917 billion for defense, the US portion of that bill was $618 billion. Only three EU members contributed the recommended level of 2% of GDP to the alliance. Greece, UK and Estonia along with the US, which chipped in the most with almost 3.6% of our GDP.

Germany’s Angela Merkel was in President Trump’s sights over their energy spending with Russia.

“Germany, as far as I’m concerned, is captive to Russia because it’s getting so much of its energy from Russia,” Trump said. Turning to Jens Stoltenberg, the NATO secretary-general, he said: “Explain that.”

“We’re supposed to be guarding against Russia and Germany goes out and pays billions and billions of dollars a year to Russia.”

If Germany wants to do an energy deal with Russia, then that’s probably a bigger deterrent to hostilities then lining up tanks on the Crimea border. But don’t thumb your nose at US energy companies and then expect Americans to pay for your ease of mind.

Listen allies are one thing and surely if any act of aggression took place on the continent the US would come to their defense. But NATO is a Cold War relic, designed to syphon money from the US to Europe in a 60-year extended Marshall Plan.

If the Europeans and Germans in particular, are so concerned for their safety, then why is Germany only spending 1.2% of its GDP on NATO defense. Because it’s a ruse, a relic and no longer needed in this day and age.

And it’s about time we have a president to hammer that home to Europe.

JPM’s Dimon eyeing Deutsche with Chinese cash

Is Jamie Dimon looking to goose-step into Frankfurt and take over troubled Deutsche Bank using Chinese money?

That appears to be to the story coming out of Germany as Deutsche’s stock spikes more than 6% in European trading on the news.

JPMorgan and Industrial and Commercial Bank of China are looking to take a stake — size unknown –to bolster the troubled bank, the report from the business weekly WirtschaftsWoche said.

WIWO also reported that German Chancellor Angela Merkel had met Axel Weber, the former Bundesbank head who is now chairman of Swiss bank UBS, to discuss his thoughts on Deutsche Bank.

Newly installed CEO Christian Sewing has not given the market any confidence in his ability to turn around the much maligned institution, which has paid nearly $500 billion in penalties and fines to global regulators for its bad banking actions over the last decade.

Sewing is also seen as an impediment to change since he made his bones at the bank during this troubling time as I have written before.

Before the summer ends something will happen with Deutsche Bank. Whether that’s a merger with fellow-troubled German firm Commerzbank or a bailout through cash injections from EU this bank right now is on the ropes and getting pummelled.

Tariffs and the Art of the deal German-style

As I wrote last week this is more of a tariff tiff than a war.

You announce a number — $50B, $200B in tariffs — it doesn’t matter. It’s just a number to begin negotiations.

Wednesday morning news broke that the German ambassador was about to announce that the EU would abandon all import tariffs for cars between the European Union and the US provided the Trump Administration drop its 25% border tax on all EU car imports.

See its all negotiations and never really gets implemented. It’s the Art of the Deal so to speak. Finally, America has someone who does not bow to pressure from other countries that have enjoyed decades of favorable treatment selling into the US market.

This has everything and nothing to do with President Trump. Presidents Obama, Bush, Clinton, Bush could have done this. They couldn’t because they took the money of the multi-national corporations and the globalist free traders who demanded that the US come out on the losing end of most trade deals as a way to pay back for our other sins.

Enter Trump. No ties that bind to these factions. Knows a thing or two about negotiations and plays hardball with them. As I wrote earlier, do you think any country would forgo its ability to sell into the US over tariffs or import taxes?

Of course not. I think I hear China working the abacus to figure out its new proposal right now.

Most Americans should not fear the word tariffs

The tariff tiff between US and China is just that. Nothing even nearing a war.

If you believe that trade between the two countries will be hampered, constrained or restricted it will not it is merely hand wringing by liberal media.

No country would spite their citizens by cutting trade off with the US. We buy more from every country than any other country no matter the product or raw material category.

No the Trump administration is attempting to right a decades-long wrong when it comes to pricing and access to markets for US manufactures. Past administrations have short-shifted Americans for the idea of globalism vs nationalism.

Large US multinational corporations made huge profits working off of a globalist model where products were made in low-cost environments with taxes being held overseas.

The Trump White House wants to curtail this model in order for Americans to benefit from these jobs. The new Apple/Foxconn agreement is a possible template for his trade philosophy.

So the trade war headlines and rhetoric is coming from the left, which wants to continue the move to a globalist model at the loss of American workers. Tariffs are used to level the playing field to make the US stronger.

Why have we not heard of tariffs for over 20 years? Because previous administrations were giving the candy store away to China, EU and the like.

The White House wants to see the pendulum swing back to benefit Americans.