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One of the side effects of the Ukraine war is the gradually improving relations between the US and Iran. The US released some funds to Iran that were frozen. Here Iran responds by slowing down its buildup of near weapons grade nuclear fuel. In this way president Biden has tackled the difficult problem of Iran's nuclear program in a low profile way, one of the achievements of the Biden administration's foreign policy.

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President Trump's focus in the State of the Union message in 2020 in the U.S. Congress was on what he had done for U.S. prestige and perception- "In three short years, we have shattered the mentality of American decline and we have rejected the downsizing of America's destiny. We have totally rejected the downsizing." "We are moving forward at a pace that was unimaginable just a short time ago, and we are never going back." The theme of the speech- "The Great American Comeback." No longer were other nations be allowed to take advantage of America, American interests would come first, and this also meant blue collar working families and middle class. Trade deals with Mexico and Canada, trade deal with China, reversing of the trade deficit, bringing back about 12,000 of the 60,000 thousand factories lost over two administrations Democratic and Republican of the last 16 years with many more factories in the pipeline, increasing jobs and incomes in an unprecedented way, were all the focus of the speech. The president basically sidestepped the impeachment for Ukraine policy and implementation, and focussed on the optimism from reversing American decline in trade, jobs, and manufacturing under past Republican and Democratic administrations.   ...

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Mead on Greenland and DJT at Davos- he says in WSJ that Europe and US have a lot in common. From the way the media handled it it played right into Mette Frederiksen of Denmark's effort to portray the US in a colonial light when the colonial power on record is Denmark which followed the British, the Dutch and the Spanish in setting up colonial empires, but just failed to compete and sold off its colonies one by one to the US or traded it for territory. Denmark has along dispute with Germany on Schlewig-Holstein. Germany's Merz avoided the rhetoric and his foreign minister Wadephul emphasized importance of Greenland for security of Europe and indirectly of the eastern seaboard of the US. Germany and Italy meet Feb 12 and both coungries will work with the US. Britain's Starmer joined the Nordic countries in protest with its own colonial record providing some of the darkest hours for China during the Opium Wars. Farage and Conservatives see Greenland would be best in US control for US and European security. This means much of Europe is still with the US on the Greenland issue though misrepresentations of the US position by Denmark and many Democrats continue because of a certain inveterate opposition to DJT, with no mention of Admiral Robert Peary's discoveries in north of Greenland in the 1890's (for US Navy), and Democrat Harry Truman's offer of $100 million for Greenland in 1947, going back to Secretary of State Seward's effort to add Greenland to the Alaska Purchase in 1867. ...

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China will continue to keep its $1.19 trillion dollar U.S. bond holdings as it is a liquid and secure place for its foreign exchange reserves, say sources close to SAFE which handles the investments. China has over $3 trillion in foreign exchange reserves.

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More evidence in Commerce Department trade figures that president Trump's strategy of imposing tariffs on $200 billion of Chinese goods and renegotiating trade pacts with Canada, Mexico and South Korea was not sufficient to reverse the huge U.S. trade deficit. The international trade deficit in goods and service increased 19% in December from prior month to $59.8 billion. Excluding services that U.S. sells to foreigners such as tourism, intellectual property and banking, the deficit grew to $891 billion the largest on record.

Mr. Trump's tax policy of increasing the fiscal deficit increased growth in the U.S. at a time when the rest of the world economy was slowing leading to higher demand for imports, and the 4 increases in interest rates by the U.S. Federal Reserve helped strengthen the U.S. dollar that pushed up imports.

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A graphics view of the severe trade imbalance in U.S. trade with China and the trade war after president Trump put tariffs in place.

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Robert Kagan makes the case for continued leadership of the U.S as a champion of liberal democracy and free trade, as the view that it will just happen in a multipolar world of China, India, the U.S. and Europe, is not credible. The existing democracies- India, Brazil, Turkey, S. Africa, Australia -are weak and lack the experience to provide this leadership. India and China could easily end up in rivalry in a multipolar world. This has implications for today. The U.S. cannot provide this leadership as a services economy- it needs a strong manufacturing base to do this. Lessening inequality was a hallmark of the progress made in the 20th century, and especially the six decades since World War II when the U.S. clearly exercized this leadership. The progress to European unity was another hallmark of these six decades. A healthy Japan was also part of this.

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UAW's Shawn Fain's support of US 25% auto tariffs April 2, 2025. Fain says-“We applaud the Trump administration for stepping up to end the free trade disaster that has devastated working class communities for decades.” US president Biden supported the UAW, even standing in a picket line to support UAW negotiate a contract for fair wages for workers with the three US automakers, Ford, GM and Stellantis. For decades workers in the US faced the threat of outshoring to Mexico to reduce wages. This action on tariffs will increase depressed wages for American workers in the same way that president Biden's action helped negotiate better wages. In this sense both Biden and DJT are on the same track. In fact president Biden 2020-2024 decided to keep most of the tariffs put up by president Trump in 2016-2020. It is likely that a future Democratic administration will continue DJT tariff policies to achieve domestic goals such as fair wages for American workers, and for rebuilding American manufacturing in the way president Biden has done. This is in fact one of the singular achievements of the Biden administration for building the working class and middle class neglected by Clinton, Bush and Obama administrations. On this issue both Biden, Trump and any future US president will be on the same page, because it is about fair trade, to even the playing field, and is right by American workers and American values. History will show that this required courage and persistence on the part of Biden and DJT, and was done not on whim as is falsely portrayed but on the advice of people who had the experience, wisdom and sought the best for America such as Robert Lighthizer ,the US Trade Representative in 2016-2020 and his deputy Jamieson who is the USTR in 2025. Lighthizer is notable because he handled the unfair trade with the Japanese in the 1980's as Deputy USTR under Reagan, and knows fair trade and how to get it to build a strong American economy. ...

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Beijing's sensitivity to the Hong kong protests from the ongoing efforts to maintain economic growth in the face of the trade conflict with the U.S. and a tariffs war.

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WSJ interview with Narendra Modi before he meets Joe Biden at the White House. This interview talks about India seeking larger role in world affairs, about Indian democracy. Seen from inside India the perspective is different. India is at the same stage where China was in 1990-2000 with the rising aspirations of a billion people, Japan in the Meiji period in 1900. It is all about jobs, investment, technologies and manufacturing on a scale that surpasses China in that period with newer technologies to meet the rising aspirations of 1.4 billion people. China's trade with the US was three times higher than the Indian trade with the US in 2022, India desperately wants to catch up and fast. The Danish ambassador to India was asked what he saw in India today and he said it was the rising confidence of people that struck him most. The digitalization that has changed the way government benefits are provided to 1.4 billion people and opened bank accounts for all, provided delivery of services to all parts of the population. The infrastructure that is being built at breakneck pace, and new colleges and universities expanding access to quality education, healthcare.   ...

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The biggest decision coming out of the NATO and European Council meetings is Germany saying it supports stationing of long range missile systems in Germany by the US by 2026. German chancellor Scholz says the decision was a long time in the making and Germany supports it as a necessary step to secure the country. This happens as China's support to Russia continues through trade and economic relations and the Ukraine war prolonged for another year into 2025. Other decisions were to provide F-16's and added Patriot missile systems so that Ukraine can defend its skies from missile attacks.

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Xi Jinping's effort to shift the economy of China more towards serving the interests of Chinese who were left behind in the boom years includes a shift away from coal, away from real estate for speculation, and away from reliance on trade with the US and Europe as a driver for growth. This is proving to be difficult as the pandemic has increased demand for Chinese exports making trade a bigger driver for growth than before the pandemic. Introduction of a property tax to cut into real estate speculation has been scaled down to trials in 10 cities.  China did not put stimulus checks in the accounts of its people the way the US did which has led to Chinese domestic consumption not rebounding the way it has done in the US. Figures for consumer spending in China for September show an increase of 4.4% from the year earlier far below the pace of 8% set for 2019. The lack of social security and other safety nets in China makes people to save even more today. Chinese savings rate was 40% in 2019, today it is 45.2% for May 2021, according to one survey. Personal consumption makes up 38% of China's GDP in 2020, it was 39% in 2019. In the US it went up in 2021 June to 69% compared to 67% by the end of 2020. Infrastructure and construction deepened debt problems in China, and expanding exports created trade tensions. Both these problems have deepened with the pandemic. As this report says Chinese exports have gone gangbusters. Problems in production in Vietnam and Malaysia have added to export surge from China. China's trade surplus with the world is now at $535 billion in 2020, and surplus with US increased by 7% to $317 billion in 2020 from 2019.  Chinese government policy is now for "common prosperity" to reduce inequality and spread wealth and income more evenly for all the Chinese people. This is taking time and Chinese government policy is now set for the long run with these short run problems. ...

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Tariffs in the US for European goods are low, only 2.5%, compared to 10% with other countries, so low that free trade doesn't mean much of anyhting these days. Add to this the angst of free trade and globalization creating marginalized communities that depended on manufacturing in the heydays of the period after World War II for three decades till the eighties. Politicians and people in the US worry about other things. Jake Sullivan, NSA adviser at the White House says- "The project of the 202's and 2030's is different from the project of the 1990's. The US has a different set of fundamental priorities than simply bringing down tariffs."

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This response by experts on transatlantic relations rejects the other view expressed in Zeit Online that the U.S. under Trump remains estranged from Germany and the EU. These experts from the American Institute for German Contemporary Studies, American German Council, and Centers at John Hopkins and Georgetown for German Studies, reject the view that the Trump administration and Germany are that far apart on many issues as it appears from media coverage.  Foremost it points out that civil society relations are sound and growing. About 50 million Americans trace their descent to Germany, including president Trump, much larger to over half the U.S. population considering European descent. Much larger is the sense of a culturally shared future with the European Union, with the nations of Europe including Germany, France, Italy, Spain, the nations of Eastern Europe, and Britain. The civil society relationships run deep in a way that is hardly affected by the Trump administration. Within the Trump administration the policies to Europe these experts remind the reader, are determined by the "adults" in the administration, who are senior members of the administration. This is a crucial point as Trump administration policy is not determined by the president's liking for tweets as much as by senior cabinet members Tillerson at the State Department, Gen. Mattis at Defense, Kelly at the White House, and senior members of Congress including Senators Corker and other senior committee members. This is why Republican Senator Kay Hutchinson was chosen as Ambassador to NATO. It should be noted in this context of German-EU relations in president Trump's first year that there was a period of German disillusionment with president Obama, exacerbated by the NSA spying on German chancellor Merkel and on the EU delegation to the UN, with president Obama's failure to offer any apology. Relations recovered from that low point. No one suggested that there be a German led decoupling of the EU with America at that low point, or at another low point in German-U.S. relations with the setup of American Pershing II nuclear missiles on German soil under the Reagan administration when there were large scale protests.  The American view that the U.S. should not have to shoulder major responsibilities for defense and foreign relations by itself is not new say these experts, and goes back to earlier administrations before Trump.  The experts argue for an active role by Germany with its partners in Europe for defense and foreign relations, which should not be seen as a result of U.S. pressure, only responding to the situation as it has evolved upto this time. Views on immigration are also changing with effort by the EU and Germany, France, to reduce immigration from the source countries in Africa, and the changing perceptions about uncontrolled immigration in Germany and France, say the authors. A coordinated policy towards Russia  is seen as not having changed. And much as a reset in relations was advocated by Obama in the first year of his first term, the current policy of the Trump administration to work with Russia to lower tensions can be seen in the same way say these experts, and not as a fundamental shift in American policy. The deep relationship of Germany and the EU with China is another positive aspect that will also help the U.S. in framing its own policies towards China. The German-American relationship, and the European Union relationship with the U.S.  is seen as basic to the values and interests of the U.S. and Europe. This relationship is too deep and supported by civil society and Congress, the Republican Party, and the Democratic Party, by large trade relationships, to be affected by temporary differences under any one administration. Even these differences are part of a larger debate that is part of dialogue on issues in a democratic society, sometimes raucous and loud, and could be welcomed and carefully channelled in constructive ways.     ...

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China is in isolation and in a freeze in ways that are unprecedented, that have never happened before. It has depressed world trade, disrupted supply chains of world trade, forced companies to restrict their employees movement, or bring them back home. Apple with 10,000 employees has closed operations and offices in China till Feb. 9. This is happening for many foreign companies in China as they deal with something they have never encountered before.  There is slowing down in demand fro crude oil as the lockdown affects the economy of China and world trade, Oil prices dropped 16% since the virus was detected. When the Sars virus happened in 2003 the Chinese economy was sixth in size in the world, now it is the second largest. At that time 7 million Chinese travelled abroad, today it is about 150 million, affecting international tourism. First quarter growth in China is now forecast by economists surveyed by WSJ at 4.9%, the lowest in decades. ...

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The US could put 25% on Canada and Mexico starting February 1 for inadequate border security to stop the flow of illegal drugs, fentanyl and migrants to the US. By executive order DJT asks agencies to report on the issues of trade by April 1.

US Canada two way trade is about $1 trillion. Three quarters of Canadian exports go to the US and US imports half of imported oil from Canada. Canada's Trudeau says Canada will respond dollar for dollar to US tariffs.

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The Trump administration released its framework for NAFTA negotiations. The framework is designed to reduce the U.S. trade deficit and promote "Buy America" provisions. It will challenge Mexico on labor and environmental matters, which is likely to win the support of Democrats. A mechanism for preventing countries from getting unfair advantage through currency manipulation is part of the framework, yet less of an issue with Mexico and Canada. It will also work to protect U.S. trade interests in an effort to appeal to workers who supported Trump in the 2016 election. Overall it does not deviate much from established U.S. trade policy, according to the WSJ. For this reason the new guidelines were welcomed by the Mexican and Canadian governments. Mexico and Canada also see this as an effort to modernize the agreement to reflect changes in technology and commerce since NAFTA was signed. Under fast track trade promotion authority the president's Trade Representative Mr. Lighthizer can start negotiations in 30 days. One of the matters up for change is the Chapter 19 dispute settlement mechanism which makes it easier for Canada and Mexico to avert trade sanctions. Mexico's economic prospects have improved as the NAFTA renegotiation avoids the sharp rhetoric of the election campaign. The Mexican peso which traded at 22 to the dollar in January 2017 following the U.S. election, is now trading in July 2017 at 18 to the dollar.   ...

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This report in The Times take a look at the work Liz Truss has done as International Trade Secretary and now Foreign Secretary. Truss does not want Britain to become economically dependent on China. More than Johnson Truss is a UK Atlanticist who wants the UK to work with the US and the EU to build a western world that is entirely independent of China. Looking at her work and experience it would appear that Truss is the most underestimated of the candidates for prime minister, much more so than Sunak. She can be strident and aggressive but she has gone through a process of thinking and studying before that with a willingness to try new ideas. She come from an intellectual  family and one that was active in left wing activism. She studied at a comprehensive school in Leeds before going to Merton College Oxford  to study philosophy, economics and politics, and was willing to change her thinking when persuaded about a different course of action to get better results. She also gained the knowledge she needs to do her own thinking with experience first hand as Chief Secretary at Treasury, Secretary of International Trade, and as Foreign Secretary, getting trade deals with Australia and negotiating with other countries. Cameron, May, Johnson lacked this kind of knowledge and experience. And Sunak also falls way short of this kind of knowledge acquired and experience handling international assignments key to Britain's advancement after Brexit. ...

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Foreign policy of DJT Administration in 2025- asserting US interests, reviving the Monroe Doctrine for US policy in the western hemisphere, and rapprochement with Russia, China, Japan, EU, in international trade after tariffs against unfair trade. Mead says this has improved the US standing in world affairs and also has helped other nations in the world achieve their interests in their region. EU takes on a larger role in Ukraine freeing the US to assert itself in a much needed way to protect its borders and remove threat of drug and fentanyl trafficking from Venezuela and Mexico. Russia accepted as a Northern European power and NATO is pulled back as it should have been after the Soviet Union collapsed,  (it gets the "respect" it needs from the US so that it relinquishes efforts to disturb the peace in Latin America and the Middle East). It also frees up the US from other entanglements so that it can concentrate on both competition with China and negotiating win-win solutions on trade with China. US relations with Japan and South Korea are improved and both nations are taking a bigger role in their region with other partners India and Australia -so that the US frees up resources for tackling domestic and foreign problems that ensure US regains its position as a powerhouse for manufacturing, industry and world class infrastructure in the next decades to 2050. That is the surest way to a safer, better world for Latin America, Europe, Asia and Africa. ...

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Robert Reich, a former Labor Secretary, says that instead of "rebalancing" with Chinese consumers buying more American goods and China exporting less to the USA, things are headed in the opposite direction. Why? Because at the macroeconomic level China is devoting more of its country's resources to production capacity. Chinese consumers are taking home a smaller proportion of the total economy. In 2008 personal consumption amounted to 35% of the total economy, whereas in 1998 it was 50%. Capital investment in the same 10 years went up 35% to 44%. Chinese continue to save and these savings are going into infrastructure and manufacturing capacity. There is even a social twist to the savings, with fewer young Chinese women than men parents with boys have to compete in the marraige market and save assets for this. Households are also saving to support more elderly people as population is aging quickly with population policies. All this means that with all the talk (see links to Niall Ferguson and Krugman), the situation will likely roll on in this manner till things reach an impasse, or there is a strong political backlash in the USA which leads to stronger trade actions by the government, or there is a crisis. Meanwhile the trade deficit is headed higher and Chinese foreign reserves will go far above the current $2.3 trillion. And the Europeans will also be getting restless with their trade imbalance, as the euro edges higher and the yuan remians pegged to the dollar, leading to trade distortions. ...

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Factories with U.S. focused certifications and capital intensive machinery are hard to find in Vietnam, making it harder for companies to shift operations out of China. The trade war and tariffs are leading to a gradual shift in supply chains worldwide, with Vietnam andIndia two destinations for the shift. American manufacturers in China say China has a 15 year head start. A new strategy called China plus 1 is the first stage in this shift of supply chains as companies setup shop in places like Vietnam. India's business climate is more restrictive making Vietnam the first choice for companies looking to diversify production base from China centred manufacturing, as the trade war makes a shift imperative.

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"We will never abandon the American worker and her community wherever it is located," says president Biden's head of the Council of Economic Advisers (CEA). He tells the Economic Policy Institute that many economists had questioned the policies that hurt American workers even as early as 1996. He joined EPI in 1992 and says he has followed the trade debate since then and heard the warnings as China entered the WTO in 2001 after years of negotiations in the last year of the Clinton administration.  Common sense questions were asked- Why asked Thea Lee now at the Labor Department is it good to have protection of intellectual property rights but not labor rights under NAFTA. On TPP and FTA's or free trade agreements in general he who writes the rules gets to benefit from them. Free trade having far less to do with free trade as generalized is the first thing he noticed when coming to Washington. Certain business groups captured the task of writing the rules in TPP  to benefit them.   ...

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The move by Peugeot and Fiat Chrysler to merge is seen as an effort to use consolidation as a way to tackle depressed demand. Ford and GM are struggling in foreign markets, as Toyota and VW have expanded in foreign markets, and Geely has expanded in China with stakes in Daimler and Volvo AB. Added costs for the shift to electric cars, higher emissions standards,  are also hurting car makers. Global new car sales of 96 million in 2018 are expected to decline by 4% in 2019, and remain sluggish, with the U.S. China trade war and Brexit taking its toll. Some car companies are particularly affected. Chrysler's European car factories ran at about 52% in 2018, well below European industry average of 73%.

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China has two ports in Panama and significant investments in port and maritime activity that give it an advantage over the US in its own backyard. The Panama Canal was one of the bold endeavors of the twentieth century. In Path Between the Seas, David McCoullough describes this feat of engineering, the lives lost to malaria, the efforts it generated to find a cure for malaria, and the indomitable spirit of McKinley and Theodore Roosevelt that every American can rightly be proud of.  It was handed over by president Carter to Panama, in the way Clinton handed over entry into the World Trade Organization without protections and written agreement for level playing field in trade in the 1970's and in the 1990's when US had no idea that American business would create from these beginnings in phases supply chain partner, competitor, and adversary for America.  In 2025 Americans can look back and see that American interests were not protected in a period of so called "American triumphalism" under Carter, Clinton, Bush, Obama that has since disappeared with the loss of American manufacturing and destroying the small factory towns across America- and also France and EU nations- that depended on manufacturing for jobs and standard of living.  DJT is simply charting the long road back for America to the Bold Endeavours and Spirit of American adventure that Americans see in themselves as a nation founded on the frontier since Washington's days in the Pennsylvania country in the 1750's. The Spirit the led to the founding of the new nation through a protracted war on the frontier with the British. ...

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Hillary Clinton narrowly loses the Michigan primary to Bernie Sanders in March 2016, as the Sanders campaign focusses on Clinton's support for trade agreements that hurt American workers and lead to loss of manufacturing jobs. About three fifths of voters in the Michigan primary considered this a major issue. Many less educated younger workers see their job prospects diminish and wages drop with free trade that hurts American manufacturing jobs. Bill Clinton signed the NAFTA agreement with Mexico, and as a member of the Obama administration Clinton supported the Trans Pacific Trade Agreement, later opposing TPP when she left the cabinet. Sentiment against trade that hurts manufacturing jobs in the U.S. is strongest in midwestern states such as Michigan, Ohio and Illinois. This was also a major issue benefitting the Liberals under Justin Trudeau who won in Canada's industrial Ontario province which has suffered hollowing out and loss of manufacturing jobs under the Conservative Harper administration. In the U.S. the issue goes back to the Clinton Administration for two decades. New jobs created by Apple, Google, and other tech companies pale in comparison with the industrial jobs created in another era that benefitted working class families. This issue and high unemployment or under employment, lower wages for working class families, was a major issue in the 2016 U.S. presidential election campaign. Widening wealth disparities, and lack of upward mobility, high tution and healthcare costs for ordinary families, dominated the campaign in the U.S....