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China's tariffs on US products could be called self-respect tariffs as US exports to China are small compared to China's $1 trillion surplus a year. $143 billion mainly oilseeds and grains! US business not willing to rely on US labor created the outshoring that built Chinese industrial growth, shipping out technology in the process, that created this situation. Consultants to Apple at the time such as myself bringing Total Quality of Management from Japan to the US, could see the failure of production quality at the Colorado Springs plant just before Steve Jobs returned to the company in 1998. About 20-25% of PC product was defective on the production lines seen with my own eyes. Looking back I believe it was not just the workers but the managers and engineering that needed to guide and motivate the workers with new ways to build in quality control. These were the days when Apple's Steve Jobs hired Tim Cook to revamp production and ship it to China. American workers got blamed. Yet as Jim Carlton shows in "Apple the Inside Story of Intrigue, Egomania, and Business Blunders," by 1996 a new German CEO Michael Spindler 1993-1996 had driven the company to the ground. The struggle with Microsoft gave Jobs an idea- by shifting production to a low cost location he could make the high margins to outinvest all competitors with new products-ipods, iphones, ipads. There is nothing wrong with American workers and their craftsmanship. Timeline- Steve Jobs returns to Apple 1997-1998 Tim Cook is hired from Compaq to revamp manufacturing in 1998 1999-2000 - the strategy is made to shift all of the production to China. Jobs could generate the margins and quality to challenge Microsoft, and profits to invest in new products 2020 -   the weakness of the strategy is apparent with supply side shock for chips and computers with the pandemic stopping shipping 2024 - after taking small steps to shift production to India does little to shift back to America 2025- Apple facing serious tariffs and the country's mood shifting to Make in the USA tells the new US president DJT it will invest $500 billion to shift production back to America. ...

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The U.S. trade dispute with China takes a new turn after tit for tat tariffs, with the U.S. president Trump claiming that China was interfering in the U.S. midterm elections. This plays into the narrative in China that the U.S. does not want to see China's ascent as a global power. President Trump and Trade Representative Lighthizer have singled out "Made In China 2025," China's plans for tech leadership as a serious issue for the U.S. President Trump made his claim in a speech at the United Nations, saying that he was "the first president ever to challenge China on trade."

Many of China's tariffs on U.S. exports are targeted at agricultural products such as soyabeans and corn in heavily pro-Trump states, and in rural areas where the Republican party has a significant base. 

 

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U.S. president Obama offers his own assessment of the divisive rhetoric of Trump and its origins in the way the Republican Party has opposed him throughout his two terms, including opposition to Obamacare, and ways to tackle poverty, joblessness, without offering alternatives. He says conservative news outlets encouraged this trend till Mr. Trump said he could do this better by raising the level of rhetoric. Democratic candidates Hillary Clinton, Bernie Sanders and voices in the Republican Party are critical of the way Trump conducts his rallies, and the abusive rhetoric for Latinos, Muslims and minorities.

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Chancellor Merkel's now widely quoted words were made in Munich on May 27, 2017, after a NATO summit meeting in Brussels and a Group of 7 meeting in Italy, in which she was disconcerted by U.S. president Trump's positions on NATO, Russia, climate change, and trade. These words "the times in which we could rely fully on others - they are somewhat over." Merkel added "This is what I experienced in the last few days." After the election of Emmanuel Macron in France, Merkel expressed great relief at the outcome of the French election with Macron winning about two thirds of the vote, setting the stage for the election in Germany after several months of difficult watching and waiting. Now there is new confidence in Germany shaping its own future, with France and the rest of the European Union without Britain. Merkel says she "experienced this" meaning that she had undergone a transformation in these few months, and visibly in the last few days. She was also sending a message to Germans and people of the European Union - "we have to know that we must fight for our future on our own, for our destiny as Europeans." This also complements tactically to form the approach of Germany and France at the leadership of the EU, as French president Macron said at the end of the Group of 7 conference that multilateralism was intact, and the U.S. and EU shared many common goals.   ...

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This report in the Economist magazine says views in the Trump base of support in rural areas and among white working class voters are likely to persist for some time. One reason given is that many of these people live in isolation and little contact with the more educated urban voters in America. Another factor cited here is that only a fifth of voters follow politics closely, and of these voters only a small fraction have a good grasp of the positions of the two major parties. Most people follow the instincts and thinking of the groups they are with. As a result many of the issues covered in the media such as climate change and U.S. withdrawal from the Paris agreement, the Comey firing and the Mueller investigation into Russian meddling in the election, president Trump's Twitter comments, are not having much impact on the president's ratings among his support base at this early stage of the Trump presidency. Yet it is too early to tell only 6 months into the Trump term in office. After 8 years of president Obama's two terms in office voters who feel left out are not likely to change their views in so short a time. Republican voters as distinct from the core Trump base voter are also unlikely to change their views after 8 years of Democratic party administration. By staying close to traditional Republican party positions president Trump is likely to continue to have the support of the lifelong Republican party voters unless things change. Can a centrist position emerge after voter fatigue with excessive partisan opinion, as voters seek to make America a more quieter place and a consensus on working together to lift all boats emerges. This could be expected as time passes.   ...

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U.S. president Trump names Robert Lighthizer, the U.S. Trade Representative, as head of trade negotiations with China, following a weekend summit of G-20 in Buenos Aires where he setup a truce with Chinese president Xi Jinping. The truce means the next round of tariffs on $200 billion of Chinese goods will be suspended. China had hoped Treasury Secretary Mnuchin would head the negotiations. Mnuchin had negotiated with China earlier. Lighthizer has taken a long view on the negotiations wanting to strengthen the U.S. position particularly in relation to protecting U.S. technological edge and preventing transfer of U.S. technology to China. Trade expert Pillsbury of the Hudson Institute says this steers the negotiations from informal under Mnuchin to the legal negotiations under a trade negotiating team of Lighthizer that have set forth the charges against Beijing under U.S. trade law. The outcome sought is a legally binding document that commits China to getting certain results to reduce its trade surplus with U.S. of about $1 billion each day. Mr. Trump called for "level the field" in a message after the G-20 summit. Specific details of about 142 issues in trade were brought up in the talks of Trump with Chinese president Xi in Buenos Aires. ...

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Republicans in the U.S. are talking about impeachment more than Democrats in tweets, ads and messages they send out. The Democrats are talking about other issues and this is not what you would expect after Democrats voted together on party lines to pass two articles of impeachment of president Trump. Republicans may even use the issue of impeachment in favor of president Trump as the impeachment process moves to the Senate where Republicans are in a majority. Republicans believe president Trump did nothing wrong and may call Senator Biden and his son Hunter Biden to testify in the Senate about activities in Ukraine, say experts.

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President Trump wins two victories in his efforts to build a border wall on the southern border with Mexico and control the flow of migrants which he has called a national security crisis. The Supreme Court votes 5 to 4 to allow president Trump to use $2.5 billion in Pentagon funds to proceed building the wall. Mr. Trump also made an agreement with Guatemala where that nation will act a a gate keeper for people seeking to get asylum in the U.S. from economic problems in Central America.

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Pakistan prime minister Imran Khan visits the White House to meet president Trump. Mr. Trump welcomes Khan and lauds the Pakistani leader as an athlete and a leader. He tells him trade deals can be struck, future was bright and flow of aid can be turned on. Trump makes a casual offer to help mediate the dispute between India and Pakistan over Kashmir, even though it is certain that nothing comes out of this, because of India's position not welcoming other countries doing any mediation. At the heart of this reconciliation is Afghanistan and president Trump's conviction that Pakistan can get the U.S. out of Afghanistan. Trump stated this- "I think Pakistan is going to help us out, to extricate ourselves. Pakistan is going to make a difference." The idea is that Pakistan can persuade the militants, the Taliban, into a face saving settlement that will allow American troops to come home. Mr. Khan in turn stated that Pakistan had given up its policy of using Afghanistan to give it "strategic depth" against India. The army would not go behind the back of the civilian government to conduct a policy of its own. Mr. Pompeo and Mr. Trump are impatient to get this done. The deadline of Mr. Pompeo is September 1 and talks continue between the Taliban and representatives from Afghanistan. The U.S. effort is handled by Zalmay Khalizad. How Afghanistan is governed in the future is not determined and Pakistan has a key role to play in making a sensible solution take place if it decides that something new has to be tried.  In the past U.S. governments from both parties lacked the ability to take a good hard look at the facts the origin and evolution of this dispute. To tackle it directly with a willingness not only to call it for what it is but also to give the other side an incentive to try new solutions. The inventive style of the Trump administration to tackle the situation directly, but also come up with new and novel solutions is what is now being tried. ...

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Two weeks after his election Donald Trump says the U.S. will not join the Trans Pacific Trade Agreement during his term in office. Barack Obama took seven years to negotiate the trade agreement which was opposed by trade unions, the auto industry and was unpopular in the midwestern U.S. because of the impact of trade in hollowing out the manufacturing sector. Here Frank Sieren of the DW.com points out that the agreement was not really about trade, as most of the gains of trade had already been realized according to experts. It was part of the "pivot to Asia" to maintain American dominance in the region, says Sieren. After China pulled together some Asian and European countries into its trade agreement, the Regional Comprehensive Economic Partnership (RCEP), the U.S. pushed for TPP as a counterweight to the China sponsored trade zone. China says it will try to integrate the countries in TPP into the trade zone it has sponsored. President Trump has said that the U.S. is better off negotiating agreements with each country and not getting into multilateral trade agreements. He fought the election campaign on the basis of the opposition to TPP and trade agreements that unfairly hurt American workers. This could have provided the 110,000 margin of victory in the states suffering from the hollowing out in manufacturing such as Michigan, Wisconsin, Ohio and Pennsylvania. A similar hollowing out in Ontario favored Justin Trudeau's Liberals against the Conservatives in Canada's election. ...

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WSJ describes the role of U.S. Attorney General Barr working with president Lopez Obrador of Mexico in strengthening Mexican law enforcement, increased border checks to prevent heavy weapons trafficking, and making the changes in the legal system that would help extradition to the U.S. After a period in which Mr. Obrador vacillated in his approach for tackling migration he deployed the Mexican National Guard on the border with Guatemala. Mr. Barr met twice with Mr. Obrador to get Mexico's close cooperation to combat the opioid crisis in the U.S. After a new North American trade deal was signed into law to replace NAFTA Mexico is working closely with the Trump administration in a number of areas after initial disagreements. After the death of U.S. citizens in Mexico in an ambush in November president Trump called for designating the groups as foreign terrorist organizations. Mexico is now making changes for law enforcement and says it is doing so in Mexico's own interests. ...

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This editorial in the WSJ points out that president Trump's and the Iranian government's response in the firing of missiles at a U.S. airbase in Iraq were intended to quiet things down so that there was no escalation. Both sides were in effect standing down which president Trump called a good thing. 

Beyond deterrence the U.S. effort is also to work with its European allies to open a path to renegotiating the 2015 Iran nuclear deal so that a long term settlement can be reached for the region. 

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US president Trump calls for ending the Debt Ceiling on December 18, 2024.

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It is hard to imagine that one is even writing about this, as shocking as it is- the 4 or 5 minutes between a decision to launch nuclear weapons and the end of life on this planet earth as we know it. Here Sam Nunn, a U.S. senator who was part of the negotiations for arms control and who is the leading American in this field talks about the unimaginable danger. He says the strategy from the Cold War where Russia and the U.S. put their nuclear forces in a position to be launched within minutes, 4 to 5 minutes, is outdated and needs to be changed. Hillary Clinton described the issue in the television debate. Yet this was not discussed because of the nature of the 2016 presidential election with lack of serious discussion.  And both Nunn and Clinton emphasize that once the missiles are in the air they cannot be ordered to go back. Accidental error, judgemental error, informational error in which one side thinks the other has launched a missile, a firing by mistake, are possible. In this situation Nunn says Trump is temperamentally unfit, and Clinton is fit to take on the responsibility. Yet the question this raises is as Nunn signals- is anyone but God fit to make this decision to launch nuclear weapons. Nunn says it is outdated and wrong to have only a few minutes, as such a decision cannot be made in a few hours or days, much less in 5 minutes. Nunn brings up a discussion he had in Moscow when he brought this up with Russians and president Putin. Russian president Putin told Nunn that he was fully aware of this. Putin's response was- "Senator Nunn, at some point it becomes automatic."  Nunn does not clarify what this means, or what Putin means to say. For people on the planet it is not enough to have Reagan, Gorbachev, Clinton, as Nunn mentions being responsible people for a nuclear decision. The current state of affairs is simply shocking and the lack of attention to this is also shocking. Equally dangerous is that 20 countries have weapons usable nuclear material, and sophisticated hacking of command and control processes is another danger.       ...

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Efforts to impeach two previous presidents including Democrat Clinton failed in the Senate where the vote requires a two thirds majority. The first impeachment vote against Mr. Trump failed in the Senate. In the House of Representatives only a simple majority is required. Majority Leader McConnell says he will not reconvene the Senate before president Biden takes office. Vice President Pence has refused to invoke the 25th Amendment. House Democrats have moved ahead to vote for impeachment of president Trump for the storming of the Capitol offices in Washington D.C. Their impeachment statement says president Trump's remarks that his supporters had to fight like hell or they would not have a country, constituted incitement of supporters. President Trump won 74 million votes in the last election more than in the 2016 election and lost with Mr. Biden winning 81 million votes after polarization of the country. With such a large portion of the country voting for Mr. Trump Mr. Biden risks his agenda of fighting the pandemic, and other parts of his program, becoming immersed in partisan infighting. This would also result in continuing the division of the country, and continue polarization.  About 5 House Republicans are expected to support impeachment. In the Senate some Republicans say there are impeachable offenses yet only Mr. McConnell and the senator from Utah, Mr. Mitt Romney, favor impeachment.  Mr. Trump's style of governing was controversial from the beginning of his campaign in 2016, strident and taking on critics. He governed through relative moderation compared to his aggressive posture towards critics. For instance on Mexico his remarks offended critics, yet he negotiated a new trade agreement with Mexico replacing NAFTA to ensure worker protections in Mexico, and worker jobs and wages in the U.S. Negotiations with China on trade were conducted by a seasoned veteran, Mr Lighthizer,  who was deputy Trade Representative under Reagan, and negotiated the trade agreement with Japan that worked to reduce Japanese trade surplus in the eighties. On the economy before the pandemic hit in March president Trump made significant progress reducing unemployment.      ...

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President Biden introduces a new format for the US China discussions on international coordination for economic policies of the two nations. It puts the dialogue between the two presidents and the ministries under them with clear goals for the US and for the Chinese side their own goals. It replaces the US China Strategic Economic Dialogue setup by Treasury Secretary Paulsen (Goldman Sachs) under the younger Bush which Mr. Trump rejected and which was seen as a failure for both sides creating the very hypergrowth in China pushed by business interests on both sides that hurt both nations. 

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Steve Bannon is described in this indepth report by Scott Shane as a workaholic, born to working class family with his father a telephone line operator, who went to Virginia Tech and joined the Navy in the hope of advancing a career in politics. At Virginia Tech he won a leadership position of the student organization. He was described by another student who knew him well as passionate but not likely to get much done. The period at Virginia Tech and in the Navy were the Carter years followed by election of Ronald Reagan. The election of Reagan had a huge influence on Bannon- the same overtones of that campaign of Reagan are seen today in the forgotten men and women, white working class families that Conservatives then and Tea Party Conservatives in the Obama years felt ignored. The downward drift of the lower middle class families that saw incomes drop as manufacturing hollowed out in the U.S. with foreign competition, the failure of establishment politicians of both parties to protect American manufacturing and working class families, added to the sense of angst for Bannon. Bannon just like politicians in the Obama camp such as Emmanuel, found the way to politics through finance and gains made as the banking sector and financial institutions made huge financial gains by 2008. This was a stepping stone for their political ambitions. Emmanuel who is also a workaholic and passionate about his views worked to elect a black president, Bannon choosing to do the opposite and push for bringing back the Reagan era. Most on the liberal side see him as part of a racist movement. Reagan was none of those things. How does one reconcile the two? It is possible that seeing the fight against the established politics as an impossible task, Bannon in his passionate temperament did not object to the support of right wing extremists, in the same way that Trump did. As both Trump and Bannon have people of Jewish origin and black people in their circle of friends or family. What incensed Bannon as described here by Scott Shane of the NYT, was that after the financial crisis of 2008, hardly any bank executives who had committed wrongdoing went to jail, his father's line operator retirement savings were devastated by the financial crisis, and working class families struggled harder than ever, that his daughter at West Point was with mostly children of working class families who were the ones fighting America's wars. Many ironies abound in the story. Bannon got his business start in the same financial institutions that were involved in the financial crisis of 2008, Bannon & Co was acquired by Societe Generale. He is from an Irish Catholic working class family in Richmond and attended Benedictine High School, with a mother Doris that worked on the campaign to elect Douglas Wilder, a Democrat, as the first African American governor of Virgina.  The other ironies are in that Bannon sees Trump as "an imperfect vessel" but still good enough, and Trump sees himself as "making all the decisions" when asked about Bannon, as a range of interests struggle to form a coherent movement on the right in American politics- an unlikely combination of a telephone operator's son and real estate magnate's son who built his own real estate business in luxury real estate towers far removed from ordinary men and women they represent. ...

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 President Trump says China is backing off in negotiations to address U.S. demands for a fair relationship on trade. He says the U.S. will increase tariffs from 10% imposed in September 2018 to 25% on $200 billion of Chinese goods starting May 10, 2019. China has put tariffs of 10% on $60 billion of American goods exported to China responding to the American tariffs in last September.  The U.S. says since China joined the World Trade Organization in 2001 with the approval of president Clinton it has unfairly benefited in trade with the U.S., leading to closure of factories and loss of jobs in the U.S. with state subsidized Chinese exports to the U.S. contrary to the spirit of the WTO and its rules. China has made promises to correct this and not kept them says the U.S. side in negotiations led by Robert Lighthizer. The tariffs moves are a tactic of president Trump to get China to relent and make fundamental changes in the way it exports to the U.S.  So far the Chinese response has been tit for tat. But this can change. As this report points out what is already known that China benefits far more and exports far more to the U.S. than the U.S. does to China. The $60 billion of American goods exports on which China placed tariffs represent two fifths of China's imports from U.S. With smaller exports from the U.S. to China, China has not much leverage in trade negotiations in this kind of tit for tat retaliation. It hurts China's exporters and economy much more than it does U.S. consumers. The increase in prices for U.S. consumers are also not expected to be significant, according to this report in the NYT, if China increase tariffs further. Aware of this and China's belief that past administrations have not responded is a guide to what the Trump administration can or will do, has convinced president Trump that there is no other way to get a fair trading relationship that respects U.S. interests, its jobs and workers. As Robert Lighthizer who leads the U.S. negotiating team faced this type of response from the Japanese when he negotiated with them (shoving off U.S. demands to reduce Japan's trade surplus in the eighties before accepting them), the U.S. thinks this strategy will work again. In any case it sees no alternatives to achieve its goal of a fair and balanced trading relationship. The U.S. international trade deficit in goods was up to $891 billion in February 2019 even after the tariffs on Chinese goods in September, showing that it will take a lot more to turn this as well as other trading relationships around.   ...

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BBC News covers the opposition by business leaders in the U.S. to president Trump's decision to withdraw the U.S. from the Paris climate change agreement. Elon Musk of Tesla and Robert Iger of Disney say they will quit working on the president's advisory councils. Walmart, Apple, Google and other companies also opposed the move. Energy companies Exxon and Chevron also opposed the move. This reduces the business community's confidence in and support for the Trump administration. Some analysts see the Trump move as a way to satisfy the mood of his own election base of support among people who see the climate change accord as one more aspect of a rigged system of globalization, a theme Trump has used during his campaign in 2016. During the first 100 days many of the decisions Trump made took into account the views of business leaders from Boeing on the Export Import Bank, of Gary Cohn on tax reforms, of Wilbur Ross, the Commerce Secretary on NAFTA trade agreement. With the investigations in Congress underway the analysts see the move as political to shore up support with the Trump base. Yet it also brings with it the cost of losing support in the business community that has traditionally supported Republican presidents. ...

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The resignation of U.S. Defense Secretary Mattis comes as a result of Mattis being unable to change plans by president Trump for a withdrawal from both Afghanistan and Syria. WSJ discloses that at a meeting on December 18 at the Pentagon, with John Bolton, White House National Security Advisor, Mike Pompeo, Secretary of State, and John Dunford, chairman Jt. Chiefs of Staff, Mattis could not temper the president's plans. On Thursday December 20th Mr. Mattis decided to resign. He then met Mr. Pompeo and onto the White House to meet president Trump. He and Mr. Trump discussed their contrasting world views in a 45 minute meeting, and Mr. Mattis handed over his resignation letter to Mr. Trump. Military officials were particularrly blindsided by the withdrawal from Syria. U.S. policy has vacillated back and forth in the intervention in Syria with president Obama also hesitant to commit troops in Syria. In the meeting Mattis understood that even a minimal presence in Syria was unacceptable to president Trump who ordered the removal of the 2000 troops there. The withdrawal from Afghanistan was also a result of limited patience with the war there in the 18th year and no sign that the Taliban influence had diminished since the war began- after Trump added 3000 troops to the 14,000 stationed in Afghanistan. The U.S. has 5500 troops in Iraq and there is talk about drawing this number down. The concern for the defense department is that how U.S. allies will see the withdrawal, and their perception of how reliable the U.S. is as a partner. For president Trump the cost is measured in terms of the long period the U.S. was engaged in the region without any tangible results, and U.S. not allies bearing most of the cost.      ...

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The U.S. House of Representatives votes along party lines to impeach president Trump. Americans are evenly split on this issue, a WSJ/NBC News poll shows 48% to 48%. The impeachment now goes to the Senate where Republicans have a majority and is likely to be defeated.

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Out of 50 economists in a WSJ Survey on inflation in the US, 28 economists say inflation will be higher under a president Trump. Only 8 economists say inflation will be higher under a president Biden. Trump's plan to crackdown on illegal immigration and to raise tariffs will put an upward pressure on prices say the economists in the WSJ Survey. This weeks inflation figure came out at 3%. Under president Biden inflation which reached 9% has come down to 3%, a remarkable achievement that the president alluded to in his press conference yesterday. This is a result of president Biden's cost of living actions on several fronts including housing, energy, retail prices, banking, pharmaceuticals, healthcare, childcare. Biden has made it his top priority. By raising tariffs across the board on imports Trump's actions would lead to higher prices.

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With the partisan politics in the U.S. Congress exceeding anything that happened before, both sides Republican and Democrats, are rarely talking to each other. During the many hours of impeachment debate in the U.S. Senate, Chief Justice Roberts had to call for civil discourse to be maintained. Republicans have remained loyal to the president throughout the debates. Following the rejection of impeachment in the vote on party lines, president Trump heads into the State of the Union speech to Congress on February 4th in which he will have the opportunity to defend his administration's record.

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President Trump reverses himself and says he supports intelligence agencies assessment showing Russia interfered in the U.S. presidential election of 2016. Earlier Trump told reporters on an Asian trip he did not think Russia meddled in the U.S. election. He cited Russian president Putin's remarks on the matter about not meddling after a brief meeting. and said he agreed with Putin on this point.

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U.S. president Trump announces withdrawal from the Paris climate change accords, saying the U.S. will consider re-entering the agreement  or coming up with a new deal. He said "I was elected to represent Pittsburgh, not Paris." Trump said he was concerned about the environment, and avoided saying climate change scientific evidence was not correct. He based his concerns on the idea that China and India were getting an unfair financial advantage over the U.S. The U.S. had pledged under the Paris accords to reduce greenhouse gas emissions by 28% from 2005 levels by 2025. The WSJ's Stokols and Ballhaus point out that president Trump had the option because of the nonbinding agreements committing nations to a broader goal of reducing emissions to combat temperature change of of 3.6 degrees F, to have modified emissions targets and still remained in the Paris accords. For Trump the motivation may have rested more on politics to shore up support in the Republican party which has largely opposed climate change targets.  ...