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U.S. strategy has shifted to keeping tariffs on Chinese imports intact as an enforcement mechanism to make sure China keeps to its commitments made in negotiations, says WSJ. U.S. trade negotiator Mr. Lighthizer sees the latest tariffs as leverage, and that tariffs would be removed only when China keeps its commitments made to the U.S. Initially Lighthizer opposed the move for additional tariffs imposed on September 1. Now he accepts the strategy to use tariffs as leverage. Mr. Trump told the Economic Club of New York that if no deal is reached in phase one then the U.S. will "substantially raise those tariffs, they are going to be raised very substantially." Because China is seen as not willing to provide written commitments with enforcement provisions the U.S. strategy has shifted to making the tariff removal an enforcement mechanism. President Trump has committed on the campaign trail to correct misalignment in trade with China. He makes the final decision in negotiations and use his negotiating style.  China sees making commitments on stopping all subsidies as affecting its sovereignty and its industrial model of state sponsored capitalism since opening in the 1990's to trade with the world. Both sides are looking for ways to gain the maximum concessions in Phase 1 of the trade deal as it is very uncertain whether any further progress can be made given the positions on each side, say experts. ...

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President Trump says the U.S. could permanently cut off funding to the WHO and revoke U.S. membership if the group does not make changes in the way it operates showing a lack of transparency in its operations and dependence on China. Mr. Trump says the WHO has shown "alarming lack of independence" from Beijing. In a direct letter to the Director-General Tedros Ghebreyesus -"it is clear the missteps by you and your organization in responding to the pandemic have been extremely costly to the world." Mr. Trump gave the WHO 30 days to make "major substantive improvements" or he would cut funding and reevaluate U.S. membership. Mr. Trump said in the letter that the WHO ignored early reports of the virus spreading in Wuhan, failed to share information with other countries. The U.S. which has the largest contribution by far to the WHO was unable to influence the organization. The U.S. has influence in finance at the IMF, the World Bank, and in the tech world, yet this did not extend to important matters of public health. It could be that public health had become an afterthought in the rush to prominence in tech and finance. The contributions of the U.S. exceed anything any other country has made. During the 2 years 2018 and 2019 the U.S. contributed $893 million, according to WHO records, cited in the WSJ. During this period the contribution of China was $86 million with an additional $50 million added recently. The $2 billion Mr. Xi said China will contribute is incorrectly reported as for the WHO, it is what China says it will use to support Africa and other countries in the world to fight the pandemic. ...

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President Trump reiterated his threat to place tariffs on $300 billion of Chinese goods in addition to earlier tariffs on $250 billion in goods.  The problem China faces is that it China imports less, far less than the U.S. does. China has only $10 billion in U.S. goods to place tariffs on. This is after placing tariffs on $110 billion in U.S. goods, mostly agricultural products such as soyabeans in retaliation for U.S. tariffs on the $250 billion of Chinese goods. China could place a ban on imports from Boeing or restrict the access for U.S. companies to the Chinese market. U.S. companies have invested billions of dollars in the China and employ about 2 million Chinese in well paying jobs. Concerns about unemployment would be uppermost to prevent these jobs being affected. Other concern for China is the loss of foreign investment as relations deteriorate. Already supply chains in some products such as clothing and consumer products is shifting other countries in Asia. In automobiles the regional hubs are expected to shift with India as a potential hub for Asia, and Mexico preserving its place as a North American hub following renegotiation of NAFTA. In media the dispute is leading to a shift from Chinese consumers buying Adidas instead of Nike and Huawei smartphones instead of Apple.  For an already slowing economy this hurts China more than the U.S. which is why the U.S. is pushing China to settle with an agreement that the U.S. can trust to bring down China's trade surplus. For the U.S. as most of the loss in exports is in agricultural products the solution has been to provide government aid to farmers, and for Mr. Trump to use the issue to point out that he is fighting for U.S. interests and for fairness. This is why the trade dispute poses more problems for China. Because the surplus is so wildly skewed in China's favor after the inaction of many U.S. presidents just as it was for Japan in the eighties, the situation appears to be headed towards a definite reversal of the lopsided trade surplus enjoyed by China. In the process the U.S. plans to build up the competitive edge it has lost to some degree.  ...

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The U.S. makes its first interest rate cut since 2008. The U.S. central bank, the Federal Reserve cut interest rates by a quarter percentage point on July 30 2019. For seven years after the financial crisis of 2009 the U.S. central bank cut rates to generate business investment confidence and initially to prevent a deep crash in stock markets. In making this cut the U.S. is now a follower of the European central bank which is cutting rates to stimulate the economy. The U.S. does not want to see too much divergence with European interest rates which are showing negative yields and the U.S. at about 2.25% putting the U.S. with a disadvantage in trade from a stronger currency that results from higher rates. That crisis was a result of poor lending by banks in an irrational search for profits that never materialized. It ended up hurting the savings of ordinary Americans who earned close to zero on savings accounts. A similar pattern was seen in Britain and the European Union, resulting in a loss of confidence of working class voters in the established political parties and the emergence of Trump in the U.S., UKIP in Britain, AfD in Germany and the National Front in France.  ...

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Peggy Noonan says that Trump's group has broken from the Republican Party. She also describes the Republican party as broken, that it cannot look to the past or 1980. She says two unwon wars, with one a catastrophe, and a great recession are enough to break any party. Worse the top of the party believes in things such as immigration, trade, entitlements, that the bottom doesn't, says Noonan. You have a situation where the base has left the party leadership. She describes Hillary Clinton as having a web of relationships and arrangements from the past, and with the idea that is popular among Republicans that she is only interested in acquiring power. Sanders is respected by Conservatives for his sincerity. Noonan sees God's role as chastising in this election, reminding people about what can go wrong and what needs to be done as the damage is surveyed for democracy and the country. The only reason for hope Noonan sees is in the way the 2016 U.S. presidential election is turning the decision over to the young people of America, who can decide who shapes the future. ...

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DJT launched a meme coin on Jan 20. The meme coins have no economic value what value they hold are from their value as cultural items on the internet particularly social media. Mind boggling the president's coin soars to value of $7.8 billion and Melania coin to $800 million. WSJ says the market value of the $TRUMP coin peaked at $15 billion. Eighty percent of the $TRUMP token supply is from Fight Fight Fight and CIC Digital, an affiliate of the Trump organization, according to the website connected to the token. Terms and conditions prevent buyers from joining class action lawsuits against the project and indemnify the project against any claims. Bitcoin went past $100,000 after Black Rock and Fidelity Investments launched ETF funds based on Bitcoin. $TRUMP lost half its value when $MELANIA was launched, then recovered. It has high volatility and crypto is in the same position for Bitcoin, leading experts to say crypto itself has peaked. ...

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The difference between the banks and the oil companies. The banks are doing better because of support from the central bank, the U.S. Federal Reserve. The oil companies are affected by low oil prices of less than $20. Shale oil companies in America are the worst hit unable to operate at prices this low. The oil deal negotiated by president Trump to get initially 9.7 million barrels a day off the market and with other cuts in supply from Venezuela and Iran about 20 million barrels a day, has not taken the pressure off oil prices, as demand has fallen off even more by over 30 million barrels a day.

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President Trump says TikTok app would be banned in the U.S. after September 15. He said he had talked to Microsoft CEO Satya Nadella and told him Microsoft could buy the apps U.S. operations but if it does so a substantial portion of the price must go to the U.S. Treasury because of the approval of the deal the U.S. is giving after the review. He told Nadella "Look it can't be controlled for security reasons by China- too big,too invasive. Here's the deal, I don't mind whether its Microsoft or somebody else, a big company, a secure company, a very American company buy it."

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A good meeting of Merz with Trump at the White House and reaching out at a personal level. The German leader handed Trump a birth certificate of his grandfather from the Palatinate region of Bavaria. Merz says-

"I'm returning with the feeling that I've found in the American president someone I can speak with very well on a personal level," he said. "We have a lot in common, even in the different career paths we've taken between politics. That creates a certain bond."

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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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Gerald Seib, executive editor of of the WSJ, attributes the divisions in America both on the left and the right to a deep skepticism among people about the intentions of the U.S. political and financial establishment to conduct the country's affairs in a way that benefits all people. Both the traditional Democratic and Republican establishments, the Bush-Reagan, Clinton-Obama politicians and the financial community were seen as self-serving and looking after their own interests. The right of center supply side economics and the the tolerance for immigration levels of 30% rise in the last decade were discredited. A much larger recovery program was seen as needed from the deeply bruising effects of the financial crisis of 2008, started by the reckless financial establishment behaviours, than either the Reagan supply siders or the Obama people had understood or planned. This opened the way for Mr. Trump to take up the cause of ordinary Americans with a message of ambitious infrastructure development, confronting China's use of trade adversely affecting American workers, and slowing down immigration. And within the Democratic party the emergence of Elizabeth Warren and Bernie Sanders with programs for a wealth tax that would finance Medicare for All and college education supported by the federal government. Both the traditional Republicans under Bush and Democrats under Clinton Obama were seen not upto the task, after the 2008 financial and economic crisis created deeper scars than were imagined possible. The lack of effective policies under Bush or Obama simply aggravating the situation further. The culture wars have split Americans down the middle with a breakdown of the traditional American family and social structures creating deep anxieties in America. Obama's comments unsettled people in the heartland when he said that economic decline in the Rust Belt had made people there to "cling to guns or religion or antipathy toward people who aren't like them."   The trillions of dollars spent in wars in Asia and the Middle East were seen by Mr. Trump as an enormous waste when much needed investment was deprived of attention at home. Mr. Trump hammered this point home till today it is well accepted across America.  Even as political divisions persist they are now on how to tackle the redevelopment and growth of the U.S. The new focus of agreement has shifted with agreement across the country that infrastructure development in the U.S. and defending workers rights to jobs and opportunities is the top priority. That trade relations need to be reshaped keeping this priority ever present in negotiations. As a result all parties could agree on infrastructure and the recently concluded agreement for trade with Mexico and Canada and phase 1 of negotiated agreement with China. In overseas affairs the U.S. under Trump seeks cost sharing with a 2% of GDP defense spending by other nations so that money can be diverted to use at home. In this sense the debate has already shifted in the U.S. and the UK to how to address the problems of uneven development and growth across the two countries and better allocation of scarce resources to needs at home. Which is for the U.S. a good thing in the middle of all the perception of divisions.      ...

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Following Brexit on January 31, 2020, Britain's government led by Boris Johnson prepares to negotiate new trade deals with the U.S. and other countries. The freedom to negotiate these trade deals was a key part of the plan of Brexit supporters and Mr. Johnson. The Times, Britain's leading newspaper, looks at the prospects of trade deals with each country- the U.S., Australia, New Zealand, Japan. Facing re-election Mr. Trump is seen as favorably inclined to work out a trade deal that he can show during the campaign. Trade discussions have taken place between the UK and Australia, Japan. Mr. Morrison in Australia and Mr. Shinzo Abe want to see strong trading ties and investment with Britain. Japan or Australia could be the first countries that work out a trade deal with Britain as discussions are at an advanced stage.  Britain has a small deficit with Japan in trade. It has a small dollar surplus in trade with the Australia and New Zealand. With the U.S Britain has a large surplus, it exports 121 billion pounds and imports 76 billion pounds. The prospects of trade deals are enhanced by the similarity in outlook of the governments of the U.S., Australia, and Japan, which share views on jobs expansion, economic growth and are centre right in economic philosophy. They also share a strong connection with working class voters under Johnson,Trump and Morrison. Mr. Trump is seen as a strong deal maker so that any deal would involve some concessions from Britain that increase U.S exports, including farm exports. Difficult issues with the U.S. are -pharmaceutical drug imports that could increase Britain's NHS cost for drugs, the digital services tax from Britain on U.S.  companies such as Google and the Trump retaliatory threat to impose tariffs beyond the current 2.5% on car imports of $11 billion from Britain. On agricultural imports Britain's natural foods preference conflicts with imports of genetically modified (GMO) foods from the U.S. Experts say this could lead to a partial or Phase 1 deal that does not need approval from the U.S. Congress, similar to the Phase 1 trade deal with China which sidestepped the thorny issues on trade. This is something both sides can show their support base as a win. ...

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Russian president Putin was hoping for an end to sanctions. The interference in the 2016 election was done with the hope that a Trump administration could make a difference in the sanctions after the deterioration of relations in the last year of president Obama.The U.S. Congress has moved to extend the sanctions, with Democrats and Republicans coming together on this issue. This means there is not much that president Trump can do to improve relations. This report in the NYT by David Sanger even goes as far as citing George Kennan from Foreign Affairs publication in 1947, that a "long term, patient but firm and vigilant, containment of Russian expansive tendencies," is likely to be U.S.policy.

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Scientists at the University of California, San Francisco say that manufacturers of PFAS forever chemicals are using a strategy to discredit good research that detail risks from carcinogens. They says that these manufacturers suppress unfavorable research and distort public discourse. Former EPA researcher Dourson is shown here with a company that gets half its funding from chemical companies. He pushes for allowing many times the permissible level of carcinogens set by the EPA, and supports use of forever chemicals, in this report in the WSJ. President Trump appointed him head of the chemcial safety unit at EPA, but Doursen withdrew when there was bipartisan criticism of ties to industry. Critics say he uses biased science that looks at cherry picked data. His company is called Toxicology Excellence for Risk Assessment, which he founded after taking a buyout of $25,000 from EPA, according to WSJ.

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The president tells a Wisconsin rally that he is not going to let one 60 minute debate obscure three and a half years of hard work. In the ABC interview tonight he says he was sick and feeling terrible that night of the debate, that it was a bad cold not a serious condition. That he should have listened to his instincts while preparing. This episode will be remembered in history as one which showed  an irresponsible media owned by television magnates trying to assert their power on a president who remains popular with the American people, and has the vast store of experience, wisdom and the character to get America through an inflection point, through the challenges of climate change, loss of manufacturing and overconcentration of supply chains in China that previous administrations since Reagan including Clinton, Bush, Obama and Trump had done little about. 

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Germany's Europe Minister does some FACT CHECK on Trump's statements that German's shift from fossil fuels has failed.

The German Foreign Ministry stated-

"Like it or not: Germany’s energy system is fully operational, with more than 50 percent renewables,” the ministry wrote, “And we are shutting down — not building — coal and nuclear plants. Coal will be off the grid by 2038 at the latest.”

Anna Luhrmann, Europe minister said-

"As democrats, we can no longer allow false statements to stand uncommented.”

"We have stopped using nuclear power and are burning less coal than we have since the 1960s. And our energy supply is and will remain stable."

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With the strong jobs growth report in September the US Federal Reserve, America's central bank, is expected to increase interest rates by 0.75% at its meeting on Nov. 1-2. That will be the fourth interest rate increase in 4 consecutive meetings of the Fed. It is designed to tackle inflation yet it also reverses the period of low interest rates for savers that extended from 2000 to 2020. This period covered two crises one created by irresponsible behaviour of banks in the financial crisis of 2000 and the second a natural health disaster from the pandemic when interest rates were brought down to zero as a policy response. During that period savers who suffered decline in savings with little interest income and lower income groups were hit by both the financial crises, employment gaps that hurt income and savings, and the shift of jobs overseas as jobs were shifted to China and American manufacturing declined. Economic policy was determined in that period by economists who failed to grasp the dangers to American manufacturing, to American communities with loss of jobs from offshoring, rising inequality that fragmented society.   This has changed under the Fed run by Mr. Powell first appointed by Mr. Trump and now renominated by Mr. Trump, who is not an economist and brings a very different mindset to central banking, going with common sense about what works for average Americans. a sense of humility, and down to earth about American workers and American manufacturing and its place in America. ...

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With stricter border control asylum seekers have dropped to 3500 a day at the US border with Mexico and the new government of Mexico under Caludia Sheinbaum is likely to cooperate with Biden to take back people of other nationalities. President Biden is about to pass an executive order that effectively closes the border with Mexico. Once daily crossings reach 2500 the border will be closed. The legal basis of the action is Immigration and Nationality Act clause 212F which says the president can take this action when he sees that "the entry of aliens or any class of aliens to the United States would be detrimental." This lowers the threshold from 4000 in the Senate bill negotiated by the president with Republican Senator Lankford to 2500 daily crossings. Mr. Trump had the Republican Speaker of the House not bring the Senate bill to a vote in the House. At the time Republicans in Congress said Biden should use his executive authority to do this and lower the threshold. The former president Trump also issued this kind of executive order in 2018 which was blocked in a federal court on grounds of humanitarian protection no matter how immigrants entered the country. This time there is a sense that the Congress, the president and public opinion supports this action and the president's authority. Mexican president Sheinbaum's support will also ease its implementation in 2024 and cut down border crossings from asylum seekers to lows below 2500 till a new Senate bill is taken up and passed with bipartisan support that exists in US Congress. ...

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The title says it all from BBC China Correspondent Laura Bicker. China is listening even as it is presenting itself as a nation that is putting up with an unfair tariffs war started by DJT. It has delayed tariffs till Feb 10 says this report and put tariffs on items which Europe needs from the US such as LNG and coal which China can get from Australia, saying that it wants to come to an agreement. My Fellow Americans, Canada, Mexico and China are putting themselves as aggrieved parties when there are two issues here one about fentanyl flows where none of the three nations have taken the needed action to stop all flows and control borders. The reader will find that much of the media titles blame the US for starting a tariffs war are misleading such as one in The Guardian-"In this era of Trump shakedowns everything has a price."  Or even in a Business friendly WSJ site- "The World has Changed since Trump's First Trade War. Other Countries are Ready to Fight Back." Or in Times of London sensational "World Watches as Trade War looms between China and the US," when US demand for effective action on borders and fentanyl flows from Canada, Mexico and China has little to do with trade. In fact it is incomprehensible that these three nations as neighbors and trade partners of the US have waited this long to act on fentanyl flows and controlling their border with the US.   ...

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This New Yorker has resilence in his roots in the Scottish Hebrides islands. No wonder he was able to take up the challenge of a US unable to extricate itself from  wars in the Middle East (Reagan, Bushes, Obama), and unfair trade with China, and an onslaught of unfavorable media attention. His name is DJT. According to the BBC in this story on Donald Trump's mother Mary Ann Mcleod, she was a regular churchgoer, well respected in the community, who visited her homeland in Scottish isle of Lewis, British Hebrides, frequently. Mary Ann McLeod is the youngest of 10 children of a Scottish family in the town of Tong in the Hebridean isle of Lewis in the North Sea, northwest of the Scotland mainland. Her father ran the local post office. The family was  relatively poor coming from Scottish people cleared of Highlanders during the Clearances and with fishing disasters in the family. Two hundred servicemen returning from the first world war to Tong lost their lives in a shipping disaster and the economy of the island was in poor shape. With no opportunities or future many immigrated to Canada. Mary Ann's sister Catherine immigrated to Canada and on a visit to Tong she took Mary back with her to New York in 1930. Mary worked as a nanny for a wealthy family in New York before meeting a socialite of German immigrants Fred Trump. Mary returned to Scotland in 1934 and by then she found a new life with Fred Trump whom she married. The couple lived in a wealthy area of Queens and Fred Trump ran a real estate business he had inherited with his mother. Donald Trump still has three cousins in Tong in the British Hebrides Scottish isles. His older sister Maryanne Trump Barry regularly visited Tong. Donald Trump visited Tong in 2008. Of this family a local who knows the cousins and the family John MacIver, a local councillor and friend of the cousins told BBC in 2017- "They are very nice, gentle people and I'm sure they don't want all the publicity that's around. I quite understand that they don't want to talk about it."   ...

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Discussion between New York Times reporter Bruni and Rep. Ryan, Rep Harman in the U.S. Congress. The problems facing the Democratic Party discussed include negativity towards Trump instead of  focus on issues facing working class Americans, and elitism.

Some of the problems can be traced to the Obama administration on trade issues, and inability to relate to working class Americans in midwestern states, that created an opening for the Republican Party and Trump. 

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Astoundingly in America 90 percent of people support universal background checks, yet private party sellers are not required to conduct background checks when selling guns. According to a Pew Research Center poll 67 percent of people support a ban on selling assault weapons to civilians, yet no such ban exists. It has taken this long just for president Trump to come out in favor of background checks. Ironically mass shootings have led to higher stock prices for gun manufacturers such as Smith and Wesson, as DW.com points out.  The National Rifle Association, NRA, has five million members and it lobbies hard to prevent gun control measures being passed in Congress. Members of Congress are even rated A to F based on their support for the NRA. Today an estimated 42% of Americans own guns, with 265 million guns in private hands. The NRA sees gun owning rights as part of the Second Amendment of the U.S. Constitution, believing that the right to bear arms is a basic right supported by the Constitution. The NRA over many decades has shown no flexibility in its stance and fierce lobbying has brought down every gun control measure introduced. ...