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China has over the last 10 years expanded its investments and trade with Latin America to match that with its earlier investment in Africa. China's trade and investment structures in Latin America are designed differently to correct for earlier mistakes in Africa where investments turned into a debt trap for African nations. This time China invested slowly in Latin America and created better terms for loan repayment. A look at the public debt to China as percentage of GDP shows for Brazil $30 billion is less than 1% of GDP of $2.174 trillion (World Bank). After the outcry on public debt to China of Pakistan and some African nations China has a different strategy and Brazil has a different strategy slowing borrowing and focusing loans on infrastructure projects with good returns on investment. Brazil total debt to China since 2005 is $30 billion with loan borrowings slowing down (China's strategy) in the last decade, and carefully arranged by Brazil. Contrast this with $26 billion owed by Pakistan to China on GDP of Pakistan of 338 billion in 2023- 7.7 percentage points. Sri Lanka owes $24 billion to China on $84 billion GDP of Sri Lanka- 28 percentage points.   ...

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This report in WSJ looks at the impact of the 2018 Trump tariffs retained by president Biden as the US seeks to reduce its overdependence on Chinese imports and bring back American manufacturing. This followed misguided policies of previous administrations since Clinton that weakened American manufacturing strengths. Have the US tariffs on Chinese goods worked? The WSJ graph with information from US Census Bureau shows that imports from China in 2022 going down to the levels in 2007 of about 16-17% as a share of US imports, down from a high of 21% before the Trump tariffs halted a rapidly rising curve. Imports from Germany, South Korea and Japan in 2022 were down slightly hovering around 4.5%. Imports increased from Canada and Mexico, the US's traditional partners in North America, around 13.5% as a share of US imports for each country. Also increasing were imports from Vietnam. Some of the imports from Vietnam are Chinese products shipped through Vietnam to evade tariffs, and it is not clear whether the figures from Vietnam have been adjusted for this. President Biden is looking at different scenarios in an effort to tackle inflation. One supported by Janet Yellen, an economist at US Treasury is for the US to relax some of the China tariffs. Most economists in previous administrations including Yellen failed to understand what surrendering American manufacturing to China on the scale and speed that happened would do to communities across America that depended on factory jobs. The devastation of these communities has led to increased divisions in America, weakened American manufacturing, and led to outflow of technologies vital for national security and national well being.  Republican senators, US Trade Representative Katherine Tai and National Security Advisor Jake Sullivan are opposed to any relaxation of tariffs. Studies show the removal of the tariffs would have only a small impact on the consumer price inflation index reducing inflation by 0.26%. Lifting some tariffs on school supplies and summer bicycles as proposed by the US Chamber of Commerce would have little or no impact on the consumer price index for inflation. This is because the inflation is triggered by oil and gas price increases stemming from the Russian policies and invasion of Ukraine. This has also aggravated food and grocery costs  through blocking of agricultural imports from Ukraine. An additional factor was the increased demand after the pandemic easing in 2022, but that demand is already easing in July with glut in inventories at Walmart and Target, and excess warehouse capacity at Amazon. It would also send the wrong signal to China that the tariffs imposed by president Trump after a Section 301 trade investigation and based on improper loss of technologies to China are not being taken seriously by the US, says Republican Senator Hagerty of Tennessee. The Labor advisory committee to the US Trade Representative Katherine Tai also opposes any such move after the serious damage done to US workers and to US national well being and security. This happened under the Clinton, Bush and Obama administrations with failed trade policies that ceded manufacturing to China. ...

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As the August 1 deadline approached first the Japanese and then the Europeans who held out till the end sometimes treating the US with disdain and ridicule, realized that the US was dead serious about tariffs. Even the US business community tended to treat DJT tariffs with disdain not realizing that the tariff battles were first fought against Japan by Deputy USTR Robert Lighthizer under Reagan in the 1980's always to get a fair deal for the US. The recalcitrance of the Europeans and the Japanese can be understood by the non tariff barriers Japan placed on US products and the 10% tariff on US autos the European Union had in place for decades when the US only had a 2.5% tariff on German car imports.  The media in the US and Europe has utterly failed to tell the US side of the story. Here at Lyrarc we remain committed to bring out all the facts so that readers can better understand both sides. Initially the EU adopted an adversarial approach as shown in this report in WSJ by Kim Mackrael and Brian Schwartz. How is it that the Europeans and the Japanese took such a position when since 1980 there was no level playing field for the US on world trade clear for all to see? Not till late May as negotiations dragged on did Japan and the EU take stock of their own positions, DJT having to say US would impose a 50% tariff to get the EU to understand, saying "our discussions with them are going nowhere." In the end in Scotland Leyen and Sefovic for the EU accepted 15% tariff on EU imports to US. Akazawa of Japan had accepted this the week before. ...

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James McIntyre's book about Gordon Brown, (title is Power with a Purpose) who like Jimmy Carter, was more respected in retirement for doing good work humbly and not getting into a revenue generating speaker's circuit or consulting, or boards of directors of companies. McIntyre looks at his career, the involvement of Mandelson as Business Secretary, the failures of Mandelson and Blair in New Labour, and Gordon Brown's failure to revive the Labour Party. The Times says Gordon Brown has grown in stature since leaving No. 10 Downing Street. Under Blair, Brown was No.2 and headed the British Treasury as finance minister. He only became prime minister at the end of his career during the 2008-2009 financial crisis. He started the effort to redefine Labour Party after Margaret Thatcher defeated the Labour candidate from Plymouth Mr. Foot and swept out socialist Labour and the trade unions. Then followed privatization and changes in the British economy which were followed by Reagan in the US by 1980. Through this period Brown and Blair tried to create the concept of New Labour which won in landslides as Britain switched back to Labour as the alternative. As the Blair magic withered Brown was left tackling the 2009 financial crisis but failed to define what Labour was- his Business secretary was Peter Mandelson who unlike Brown was in Labour but in for his own purpose and had a cynical attitude to politics as a way to retire in some privileged business position on boards of directors. The result is well known Cameron and the conservatives who were even less qualified than an earlier generation of Conservative politicians, their decision to call the Brexit referendum, the verdict of yes on Brexit leading to Cameron's replacement by Boris Johnson, and Britain having 4 prime ministers in a span of five years as discredited austerity drive was replaced by Keir Starmer's Labour. This project with McSweeney as Starmer's campaign manager cleared Labour of socialist outlook Corbyn supporters, won in a landslide in 2024, only to fail to define the purpose for which Labour stood for and Starmer's ratings dropping to new lows of 18% support as Reform UK's Farage took up the issue of migrants and the culture that enabled migrants to enter the UK. Britain has been let down by two generations of less competent, poorly qualified for public service politicians over three decades since the 1990's- through Blair/Brown, Cameron, Boris Johnson and left struggling with Keir Starmer. Sixty years after decolonization of an Empire in the 1960's, Britain has not gained in purpose and strength, only drifting along as new powers emerge in Asia and the world changes. ...

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DJT 1.0 was led on the tariffs policy by USTR Robert Lighthizer, who had experience negotiating with the Japanese negotiators in the Reagan era. He is today respected by  Republicans, is seen in an important role in economic policy and to prepare the tariff policy actions of the new DJT administration. Lighthizer prefers to get Congress to take action with legislation. He also believes that domestic manufacturing will make gains with new and higher tariffs on Chinese imports. Lighthizer policy is falsely compared with Hoover Tariffs Act of 1930 when world trade was 9% of world GDP, today it is 63% of world GDP, and where under Hoover in 1930 the tariffs were across the board all countries 20,000 goods. Under Lighthizer on specific products where dumping is happening -steel, aluminium, autos, with Japan in 1960-70 or China 2000-2020 targeting American industries + technologies for takeover. And falsely when it comes to raising costs to each American family on average by $4000 a year by economists. The conventional view for business for 2000-2016 through Bush and Obama favoring free trade did not take into account the unusual experience of China which entered WTO in 1990, then expanded in a way unprecedented in history at 10-12% growth rates for 15 years destroying American manufacturing with dumping, having support of outshoring by companies in the US, and not giving reciprocal treatment for exports from the US to China. China also had unrestricted access to US technologies in this type of trade. Lighthizer's approach was to specifically address this problem not a general across the board tariffs on all goods (20,000 goods) on all countries as with the Hoover Tariffs Act in 1930. Lighthizer's approach adopted by DJT called for reciprocal trade response with China as the US had already done with Japan, not unilateral across the board tariffs, and when world trade had advanced to about zero tariff rates. And falsely compared to Hoover 1930 Act because under Hoover tariffs were 29-40%. raised to 60% when world trade was small, was 9% of GDP. The Biden administration has tacitly agreed with Lighthizer's vision by not reversing DJT tariffs. A new higher tariff will probably be selective based on the industry, country and what goals the US has set under the new administration for that industry. Some of the tariffs revenue may also be used for tax cuts. ...

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The US president has invoked emergency powers that relate to national security based on the fight against fentanyl -with 490,000 American lives lost over 12 years, 5 times that in the Vietnam and Korean Wars combined. And based on enormous trade imbalances that relate to national security with China having $1 trillion trade surplus 12 times the next highest trade surplus of $81 billion of Japan in 2007.

Note that appellate courts upheld the Nixon 10% trade tariffs based on invoking emergency powers also based on trade imbalances that time in the 1980's with Japan. The SCOTUS would be overreaching its judicial power to strike down the president on his main platform in the election, says one expert.

 

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Paul Volcker before the U.S. Senate Banking Committee on May 9, 2012, before the announcement of the $2 billion trading losses by J.P. Morgan Chase. The following day Chase announced the losses from trades made by JP Morgan trader Bruno Iksil- nicknamed the "London Whale"- who made a complex hedge on a group of corporate bonds, betting $100 billion that the bonds would not default. The Volcker rule as it is currently written would not prevent such a transaction. The problem as Volcker pointed out before the Banking Committee is that under "too big to fail," "the losses would be socialized with the potential gains all private."

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The aggressive effort of the US central bank, the Federal Reserve, to increase interest rates to dampen inflation will have an effect on Asian currencies and trade. The Japanese yen lost 14% of its value and the Korean won 8%, Chinese yuan 5% since the beginning of 2022. This is a result of the widening gap between interest rates in the US and Japan where the interest rates have not been increased due to mild inflation.  Asian trade is done in US dollars and exports to the US are invoiced in dollars. Citigroup says about three quarters of trade in Asia-Pacific is invoiced in dollars. Weaker currencies would translate into higher effective prices for imported commodities - energy and food. This pushes up domestic inflation and hurts manufacturing.   Add to this a shift in the US demand from goods into services in 2022 and there is weaker external demand for the economies of Asia. This will exacerbate the slowdown in Asian economies. Many countries such as South Korea and Thailand have increased their external borrowing in dollars. Debt service ratio was 21% in South Korea and 14.5% in Thailand, according to Bank for International Settlements. Years of low rates allowed governments in Asia to borrow more without incurring high interest bills. Now that situation is changing quickly and will result in difficulties for South Korea and Thailand says this report in WSJ. In the last 10 years Asian economies excluding China increased debt to GDP ratios by 15 percentage points, according to Gavekal. The result might not be debt crises as in Sri Lanka but painful slowdowns in economy with combination of loss in external demand from the US and higher inflation, higher interest bills. ...

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This NYT report on Mohamed Bin Zayed of the United Arab Emirates, who comes from Abu Dhabi one of the 7 emirates in the Gulf Coastal region, is rare and unusual. It provides stories the prince loves to tell that make a point about how he sees the world. Here he tells them to Robert F. Worth, in the only interview Mohamed bin Zayad has ever given to a journalist from US or Europe. It took a year just to get the interview. The title about a Dark Vision is inappropriate as Mohamed Zayad simply reflects what is a British way of looking at things- valuing the Constitution, keeping religion private even its deeply held beliefs and cultural traditions such as Bedouin's practice, and a general tolerance that characterizes British society and similar societies throughout the history of Europe and Asia that were sitting on shipping lanes and practiced trade for a livelihood. It is also important because the other Mohamed, Mohamed Bin Salman of Saudi Arabia is seen as someone influenced by the ideas of Mohamed Bin Zayad of Abu Dhabi. President Biden plans a trip to the region in coming months to continue on building a narrative of development for the region. This provide an insight into the coastal regions that include Gujarat across the Gulf in India, that for centuries traded with the Gulf kingdoms. They have a trading mentality and with it comes a tolerance that is also seen in trading nations such as England. This is what brought Britain to India (and China) says Mohandas Gandhi. Gandhi went so far as to say that if there was trade on the moon you would find a British shopkeeper was first to setup shop there. Zayed has as a minister in his cabinet, a woman who is minister of Tolerance, Sheikha Lubna al Quasimi.  Zayed is unique for three reasons. He has embedded in his views the spirit of tolerance. As Worth puts it in NYT, Zayed has grasped what is true to the spirit of the Gulf region. The country's location on an ancient shipping lane has bred a type of Islam in the Gulf region, that is open to the world and tolerant.  His father Zayed Nahyan's  tendencies to openness and frank demeanor combine with this tolerance to provide a different kind of leadership. His father had the pluralist instincts that combined traditional Bedouin attitudes with a rare liberal mindedness. He died at age 86 in 2004. Zayed bin Nahyan MBZ's father was selected for these very reasons by the British in 1966 to rule the small Gulf kingdom of Abu Dhabi. In 1966, says this NYT report, the country was mostly illiterate, half of all children died during childbirth and one third of the women during childbirth, there was a complete lack of western medicine. Zayed Nahyan's brother was averse to development making the British select Zayed Nahyan at the request of Abu Dhabhi families. These early years shaped Mohamed Bin Zayed's views of how to see the world. Zayed the son loves to tell stories, and this one in the NYT shows how Mohamed bin Zayed the son and Mohamed bin Nahyan the father share a sense of what it means to be human and support all people's aspirations for a better life. This is the narrative in India and the region of 1.8 billion people that extends from India to Indonesia and Vietnam. This was seen at the G7 when leaders of India and Indonesia were invited to meet with the G7 in Munich, Germany and taken as utterly serious participants in the discussions to shape the Free World. To see the difference- UAE has signed agreements to increase trade with India to $100 billion over 5 years and was thanked by prime minister Modi for treatment of 8 million Indian workers in the Gulf region during the pandemic. Saudis are now stabilizing the Turkish and Egyptian economies with aid and providing some of the funding assistance for Siemens to modernize the entire Egyptian rail system with the latest technology over the next 5 years. Projects of this size that have never been undertaken since 1945. Sometime in the 1980's when Zayed was a young military officer having completed training at the Royal British Military Academy at Sandhurst, England, and educated in Scotland, he went to the grasslands of Tanzania. During his visit to Tanzania he went to several villages to see the Masai tribes. When he returned he sat with his father crosslegged on the floor in traditional Bedouin and Asian style and told him about his travels. His father asked Zayed about all the details- the wildlife, the Masai people and their customs, the extent of poverty in the country. After hearing it all his father asked Zayed what he had done for the people he had encountered. In response Zayed shrugged and answered, the people he met were not Muslims. Zayed still recalls his father's reaction, sudden, forceful and indelible from memory. Zayad says his father took a sudden hold of his arm and spoke to him in a harsh tone and stern demeanor- " We are all God's children."     ...

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David Welch of BW says the Cash for Clunkers program is a lemon, because it is underfunded and its noo narrow for car buyers to benefit. Only about 250,000 car buyers can benefit from aprogram of this size of $ 1billion. THe program is from August to November 1. Here is the faulty arithmetic if the goal is to stimulate sales. THe program pays $3500 to $4500 but this is place of trade in value. A carbuyer has to turn in a car getting less than 18 mile per gallon, but most cars get more than that. THe luxury models that get less than 18mpg would sell for lot more than $4500 in trade in value. And the old cars that get less than 18mpg and are worth less than $4500 in trade in value really old cars probably owned by buyers who at a time of economic distress and growing jobless numbers and credit card debt are not likely to be looking to make a purchase. Welch says it might even help sell more pickups if the really old pickups are traded in by buyers for new ones that get more mileage.

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President Trump says he will reconsider his decision not to join the Trans Pacific Partnership. Trump says he will look for a "substantially better" deal that the one negotiated by president Obama. Trump added that the U.S. already has bilateral trade deals with six of the eleven nations in the TPP and negotiations are taking place with Japan a country with which the U.S. had difficulties in trade. This change of mind comes as Republicans in Congress and other groups including farm exporters are calling for using TPP as a way to pressure China. Wheat exporters in the U.S. say joining TPP would give them a level playing field with Australia and Canada for exports. This means reopening the negotiations with Japan conducted by the Obama administration and seeking more concessions from Japan. Japan's chief cabinet secretary says Japan has made all the concessions it could.  U.S. president Trump would have to come up with a better deal to justify joining TPP.

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India like China is more interested in modernization that brings equality with Europe and America so that the period of misfortunes that struck India and China- as a result of the vastly superior technology and force of Europe as it found a passage to the East around the Cape of Good Hope- is over.  Think about this. If anything happened to democracy and pluralism in the US Indian democracy and pluralism would still be standing a hundred years down the road or the next hundred years after that. What does that say about India? Why? Because India has learnt its lessons under Vivekananda, Tilak, Gandhiji, Modiji, and understands the need for technology, trade and modernization, which is what Modi as a Gujarati with the trading mentality like the British is really after. The so called Hinduism as it is really about the Upanishads and the Gita and the Buddha, and Communism, are really not the driving force in India or China.The Upanishads and Bhagavad Gita like the Bible offer a way an ethos to resolutely fight the corruption and leakages of funds that take the investments out of modernization leaving everyone poor. And India also benefits when democracy works and acts as an enabling force for a modern economy that creates "a rising tide that lifts all boats" (people). Democracy is the tool for development and to tackle diversity of 1.4 billion people. Adam Smith was right writing then in the 1780's around the French revolutionary period and American independence - "Hereafter perhaps the natives of these countries (India, China, Indonesia) may grow stronger, or those of Europe grow weaker, and the inhabitants of all the different quarters of the world may arrive at the equality of courage and force, which by inspiring mutual fear, can alone overawe the injustice of independent nations into respect for one another." India's leaders fought hard after the 1700's for preserving independence from the Portuguese, the Dutch and the British, only they were divided. Ranjit Singh in the north fought the Mughals and the British in the Punjab. The Marathas on the western front fought the Mughals and the British. The result as Gandhi points out in Hind Swaraj in his question "who made the British Company Bahadur?" It was Indian princely kingdoms vying for support from the armies of the British East India Company interested in profits from seizing Indian princely treasuries and trade. Note that Sri Lanka or Ceylon fell to the Portuguese in 1505. The technology gap between Europe and Asia had opened up even that early by 1500's in ship building, in warships and use of maritime navigation technologies. Consider that in 1534 Jacques Cartier was out on his first trips from St Malo, France across Atlantic to explore past Newfoundland to the mouth of the St Lawrence river. The Portuguese and then the Dutch had already beaten the British and the French by 100 years- Britain's exploration of India through East India settlements in Bengal began much later in the 1600's. India like China built around river based civilizations as Adam Smith points out in his Wealth of Nations, Chapter 7, Part 3, America and East Indies-of the natives of India and China Smith says their struck "a dreadful misfortune" that arisen more by accident, that "the superiority of force seemed to be so great on the side of the Europeans, that they were able to commit with impunity every sort of injustice in these remote countries." Every Indian or Chinese will agree with this so great was the misfortune for India and China from the injustice of European nations in the 19th century so much so that Cordell Hull speaking for Franklin Roosevelt and all Americans broadcast to the world in the throes of World War II in 1942 America's call to the world for a new world order based on freedom and development for all nations of Asia, Africa and Latin America. America's Secretary of State Cordell Hull said: "In this vast struggle, we, Americans, stand united with those who, like ourselves, are fighting for the preservation of their freedom; with those who are fighting to regain the freedom of which they have been brutally deprived; with those who are fighting for the opportunity to achieve freedom."     ...

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US - EU Trade Agreement with 15% tariff on EU imports to the US and $750 billion in US exports over 3 years of LNG, oil and gas, semiconductors etc. Including military purchases. EU would invest $650 billion in the US.  Aircraft and their components, particular chemicals, semiconductor equipment, some agricultural products looked set to be exempted from the new tariffs placed by the US on EU imports into US. To even the playing field where German and Japanese cars had a free ride into the American market since 1980, 15% tariffs lower than the 24-25% proposed tariff will be place on German cars. Business in the US sees this as a least bad outcome says WSJ. Yet this ignores that the US gave special privileges to Japanese and American car makers to export into the US since 1980 with no corresponding benefit to the US in other industries or to the US auto industry. This gives the US industries and the US science and technologies opportunities to get back into the game of exporting, opportunities that the US gave to Europe and Japan since 1960. It also strengthens the US economy by helping restore the US as the industrial power it was from 1920-1980.  ...

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Without a final Brexit agreement Britain has the advantage of being able to use Northern Ireland, which would remain in the EU, as a way to send British goods into the European market including goods from companies subsidized by Britain. This and related reasons on Britain being able to set its own rules on the borders between the two Irelands, and on its trade and movement of goods, is why Boris Johnson says Britain does not absolutely need an agreement on Brexit with the EU.

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Foxconn Technology Group, largest assembler of iPhones, plans to reduce its dependence on Chinaby building plants in India. Foxconn head, Terry Gou, plant to visit India after next month. The continued trade tensions between U.S. and China are leading to many companies looking at diversifying their supply chains away from China.Manufacturing high end phones in India would help Apple get around the 20% tariff on imported phones because Apple is losing market share with its high prices. Foxconn already makes phones in India for Xiaomi. Foxconn is also looking at Vietnam.

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A change in the tone of how the US sees China's military and nuclear weapons buildup in December 2025 from the US War Department as the US and China work to preserve a trade truce and better relations with planned US president DJT visit to Beijing in 2026. US has 3700 vs about China's 600 nuclear weapons growing to 1000 in coming years. US sees the Monroe Doctrine as its major foreign policy goal in 2026- US setting rules in the Western Hemisphere for Peace and Progress without the lawlessness of drug and people trafficking in Venezuela and Mexico of the last 2 decades across the Bush, Obama and Biden administrations. This is a major change in policy to ensure the safety and well being of American communities in 51 states of the Union, in addition to jobs and factory expansion across America by fighting unfair trade practices in the world economy.

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China is slowing infrastructure projects after loaning $30 billion to Venezuela. As Venezuela's economy declined under Maduro Venezuela is paying this off with oil exports in what is called a creditor trap. Both Russia and China are intent on trade with the US, Russia to open up business and trade and China to preserve it's trading and business relationship for its exports at a difficult time for it's economy. This tacitly preserves the idea of US direction in a beneficial way for the western hemisphere that was part of the message in 1823 by president Monroe to Congress. In the Mexican War, through Manifest Destiny during the administration of James Polk in 1843 this was still the accepted idea when Ulysses Grant a future president and civil war general on the side of Lincoln fought in that war. This brought slavery free, Spanish feudalism free, democratic processes and modernized economies to California, New Mexico, Utah and Colorado, much of the West and the Pacific shoreline. Russia hopes to get the US to accept it's aspirations to be a modern Northern power in Europe. The US DJT Republican administration has shown it's respect for Russia in its zone of influence, with it's main objection to Russia in Ukraine being the massive invasion of a neighboring country. When compared to Mexico it was the US replacing the Spanish who had invaded the Aztec tribes in Mexico setting up feudal regimes, not the US invading a neighboring country. The European Union and Germany now bear the burden of defending Western Europe as a European power. The situation is similar in Asia where China has it's area of influence and India, Japan, Australia as Asian powers sharing zones of influence in Asia with China, so that the US can maintain good relations with China including fair trade that brings back it's manufacturing. The US would continue to support Taiwan as an independent country. This balance can ensure peace in the Americas, Europe and Asia as nations modernize and choose better governance under governments that relate to their history and geography, as opposed to Communist and anti-communist or democratic or anti-democratic, when they meet the aspirations of their people.   ...

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The surge in the value of the dollar is creating turmoil in the world economy. The dollar reached 1.04 to the euro and 118 Japanese yen by Dec. 15, 2016. This means Japanese and European exports will be more competitive and lower U.S corporate earnings.  Emerging market economies hold about $200 billion in dollar denominated debt and this will become harder to repay with the surge in the value of the dollar. China faces larger capital outflows and the Bank of Japan has to navigate a new situation. Some countries such as Mexico are raising interest rates to reduce inflation as the value of the peso drops. The prospect of trade wars is also another aspect of uncertainty with the new Trump administration in the U.S.

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Panama Canal ad US control of a passageway through the seas the US build in the 1900's. The New Monroe Doctrine under DJT takes America back to the days in 1900 when president Teddy Roosevelt pushed thorugh the actions neded to build the Canal connecting the Atlantic to the Pacific. TR had the US Army Corps of Engineers start work in 1904 and said the famous words "Let the Dirt Fly." When Colombia refused to make this happen he formed the new nation of Panama. TR realized the importance of connecting the oceans- foresight for the massive expansion of world trade in the 1960-2025 period raising standards of living for the 3 billion people in India/China/Asia and for the 1 billion people of the EU and the US. Never before in history has such ahuge change in living conditions  and hopes and aspirations happened. Today when American ingenuity, invention and sense of purpose is derided or ridiculed, it serves as a reminder of the great endeavors that happened under American leadership and continue to this day into the future. ...

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This essay in the Economist warns that most of the public does not understand the dangers of the idea of no Brexit as a preferred option to a Brexit deal that gives too much to the EU. It says this is dangerous in terms of the harsh effects at the border with Ireland and on the economies of Ireland and Britain. It points out that the private view of the EU is very negative towards Brexit compared to the diplomatic comments, so that little should be taken for granted. The European Union and Britain would in the event of no deal on Brexit not follow agreed  terms such on as the 40 billion pounds exit bill, guarantee of EU citizens rights, averting of a hard border in Ireland. The unfriendly nature of such a no deal would lead to aggravating its effects, argues the Economist.  The Economist estimate is that about 4% of GDP would be lost over 5 years for Britain and Ireland. Supply chains would be disrupted. Depending on WTO rules alone is not sufficient as the EU has bilateral deals with many countries. The car industry is particularly vulnerable as it employs 800,000 people and exports 80% of output- it would lose EU certification and face 10% tariffs. EU has made clear that trade for chemicals, pharmaceuticals or cars depends on meeting its standards. These are only a few of the problems in trade as the list goes on and on. ...

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What a change DJT's first 100 Days and actions on immigration and tariffs , Ukraine and Russia, have made in China's and World relations in Asia, and in Europe - all for the better, significantly better relations worldwide.  China has worked out a peace settlement in Ladakh frontier with India. It has come together in Tokyo with Japanese prime minister Ishiba and China's Foreign Minister Wang Yi holding hands, and South Korea joining, all three nations vowing to remember history and work together. In Europe Russia is being brought back into the community of nations for big power cooperation with the US after 3 years of war in Ukraine. And Germany has removed its constitutional brake on spending that frees up $1 trillion in funding for infrastructure to replace much of its rail and other infrastructure built in 1900. One would not know this reading the NYT on democracy or the WSJ on tariffs or the Washington Post on assault on federal workforce, or the Atlantic, Politico, DW.com or FR24, Der Spiegel, nor Le Monde, much of the world media slanted on way or another. One does not hear about military exercises so often as the world realizes that so called large economies China, Germany, Japan and India all depend on American goodwill and willingness to give rather than take for most of the post war period since 1950. For the last 6 years in the latter half of the Trump administration and the 4 years of the Biden administration during the pandemic relations between China and the US deteriorated and China first retreated into its own then opened up a bit. The initial idea that it could manage the DJT trade actions evaporated as Biden continued the DJT first round of tariffs. Now Navarro, Lighhizer, and his deputy Jamieson are all back advising DJT for anew round of reciprocal tariffs and tariffs on Canada, Mexico and China for not stopping fentanyl flows.  In 2022 in eastern Ladakh China's PLA had a big standoff with Indian forces in eastern Ladakh at Galwan and Pangong Lake. The Quad was active with Australia India and the US in Indo Pacific and China conducted military exercises close to Taiwan.      ...

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Mark Landler of NYT provides the background of the relationship with China and Taiwan during the Reagan administration. Reagan criticized the decision to abrogate recognition of Taiwan as a candidate and in 1982 pushed for Six Assurances, one of which was the assertion that the U.S. did not formally recognize Chinese sovereignty over Taiwan. Mr. Trump told a news channel that he doesn't see why the U.S. is bound by a One China policy, and that this would have to be part of a deal that included trade, and solving problems related to North Korea, and the South China Sea island fortifications. 

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With Britain preoccupied with Brexit, and the U.S. in a trade dispute with China, Chancellor Merkel remains the only western leader to visit and hold extensive talks with Chinese leaders Li Keqiang and Xi Jinping. She also visits other Chinese cities such as Wuhan and gives a speech at Huazhong University of Science and Technology in Wuhan, in which she commented on the social credit system being implemented in China about the social creditworthiness of individuals and businesses.  Merkel sitting next to premier Li Keqiang in Beijing advocated "that conflicts be resolved without violence and that anything else would be a catastrophe." She called for a peaceful resolution of the situation in Hong Kong and for Hong Kong's rights to be "guaranteed." This is significant because the close cooperation between Germany and China is critical for China today to tackle the economic problems created by the trade disputes with the U.S.  Merkel has a close relationship with Chinese leaders and has visited China many times, giving her the confidence to talk to Chinese leaders without arousing any sensitivities about internal affairs of China. She is the only leader who can speak her mind to Chinese leaders, without offending them. When she used the word "catastrophe" she chose it carefully. It took decades for China to build the trust and relationships with Europe and the U.S. that it has.  Trading relationships matter for both China and western nations and are built on trust and good relations. With the Shenzen region growing faster than Hong Kong, and thinking like Beijing, China could tackle the situation in Hong Kong over a long period. ...

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Germany's DW.com says in this report- "However, economists have pointed out that the US benefits from having large trade imbalances with the rest of the world, as the dollar is used in most trade, and offers major tailwind effects to the US economy." Which economists one must ask? Most of these economists had turned their back on the working people in factories in America, on their wages turned into a downward spiral, on their jobs, their factories lost for three decades. Today the American people have a sense of the true cost of this colossal failure to protect American workers and small towns across America depending on manufacturing. The pandemic exposed the risks of supply chain shocks and inflation by overly concentrating manufacturing in China.  The US has 1 trillion in trade deficits each year and it is completing the destruction of manufacturing in the US. Half of this is with China as China exports through Vietnam and Mexico, third countries, in addition to 295 billion dollars of trade imbalance the US has with China. China, Mexico, Canada and Vietnam are the largest offenders. No country can long endure with such a loss of its manufacturing base. The US Navy itself is in danger without the manufacturing to compete with China that has taken up over 50% of shipbuilding, and soon will not be able to protect the free world if these types of economists and self serving German or other foreign interests drive a false narrative. Without the US Navy in the Pacific, Atlantic and Indian Oceans no one is safe, not Germany, not the EU, not India or the rest of the world. ...

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Greg Ip points out that the stronger dollar in 2018 is creating serious problems for Argentina, and will have an effect on Turkey, Indonesia and other developing countries. Dollarization hurts because it increases debt as debt servicing becomes costlier with dollar denominated debt and imports denominated in dollars become costlier. The dollar has increased in importance in the global economy. This is why the economic growth has suffered in developing countries in 2018. It is also why president Trump believes he can cut off Iran from the U.S. banking system to increase chance of new negotiations to fix flaws in the Iran nuclear deal, says Ip.   Argentina has seen internal problems compounded by the rising dollar causing the peso to drop by 17% so far in 2018. 88% of Argentina's imports are denominated in dollars. A rising dollar means it costs more in pesos for imports. Argentina's different levels of government have $98 billion in dollar denominated debt, and private sector has an additional $68 billion, the total being a third of its GDP. A decline in the peso means this is harder to pay off. About 40% of world trade, according to Harvard economist Gita Gopinath, is invoiced in U.S. dollars, four times U.S. share of world trade, and developing countries together owe $2 trillion in dollar denominated debt according to BIS. This makes it harder for developing countries such as Indonesia, Turkey, India, Argentina, Brazil, as they now face rising oil prices in combination with a rising dollar. In Argentina a poor crop for soyabeans and other agricultural exports in 2018 creates additional woes.   ...