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DJT arrives in Beijing China May 13 2026. Topics that will be discussed are - the Iran War and how to resolve it, trade with China, tariffs, and US Taiwan policy. China continues to run trillion dollar surplus in trade with the world with lower trade surplus with the US after DJT tariffs. From $295 billion in 2024 under Biden the new DJT administration with DJT, Bessent and Jamieson has lowered this to $202 billion by 2026. In that same period the world trade surplus of China has increased from $992 to $1.19 billion. It is not clear whether some of the drop in the US figures is from China sending product through channels to Mexico and Vietnam that is then shipped to the US. DJT showed results in his policies by lowering the trade imbalance by 32%, while trade imbalance with the rest of the world has worsened (increase in trade surplus of China) by 20%. What does this show? We can safely assume that excessive trade imbalances are not in either China, EU, or America's interest. China increases trade and political friction by doing so, and it leaves its own policy weak by overdependence on exports, too little effort to increase domestic consumption and living standards.  FOr the US and EU trade imbalances with China of over $1 trillion reflect misguided policy at the top by US and EU decision makers and governments. By exposing their manufacturing base they are losing valuable jobs by the millions and creating a situation where the few with good jobs in select industries live in large cities and the rest of the country in smaller towns and rural areas suffering from lack of amanufacturing base. This weakens the investment base for public services and leads to lack of investment ininfrastructure. This is called deindustrialization which the DJT and Biden administrations both fight hard to reverse for the last 10 years since the disastrous years of the Obama and Bush administrations 2000-2016. For this reason we can say a good Republican is as good as a good Democrat, a bad Republican is as bad as a bad Democrat, political labels are just that labels. The media in US and EU are on a wrong footing and still fail to cover this the way it should be covered to shake off the lethargy in public sentiment in the US so that a rapid drive to reindustrialize and build new new infrastructure on top of the old that was built after World War 1 can take place. In today's world India is stepping up with major infrastructure building just as the US and EU ramp up their rebuilding.  ...

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Canada's pitch to the US before tough negotiations with Jamieson Greer to preserve Canada's automobile industry, its aluminium industry, dairy industry with benefits gained in the past. US had also put forward its pitch for 82% North American content and 50% of it from the US for all automobiles sold in the US. Carney takes a positive approach presenting Canada as a strong partner that would Make America Great Again by offering its vast mineral resources, and its resources of oil and LNG. It says LNG will double from 2030 to 2040 from 50 million to 100 million tonnes of LNG annually. 56 critical minerals agreements with $18 billion in investment, doubling the electricity grid for lowest cost power and second lowest emission in OECD countries. Canada is an anomaly in trade says Sir Ivor Jennings in his book on the British Commonwealth. Its trade east to west is an anomaly when if it was truly apart of the North American economic region it would trade north to south. This is the result of Montgomery's failure to take Quebec during the War of Independence as Washington planned the war with Britain. For instance Ontario would trade with Vermont and New Hampshire and New York near its borders. Instead the dairy industry in Canada operates in competition with the US and sends product east to west. Washington and Oregon are not trading normally with neighbors British Columbia instead shipping product back to eastern Canada. For years the US allowed Canada and Mexico benefits in trade that hurt is own auto industry. Jamieson Greer is expected to change this so that US manufacturing can compete with China and European Union on a level playing field. ...

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Alberta referendum of October 19 2026 for separation from Canada. Alberta with oil and gas, Saskatchewan and Manitoba with agricultural production provide Eastern Canadian provinces such as Ontario and Quebec with food and energy,  Sepratist sentiment in Alberta comes from a sense that Alberta is being exploited by Eastern Canada for the last 100 years. An independent Alberta would be aligned with the US, more likely, though it could be part of the US states. Canada says Sir Ivor Jennings in his book Commonwealth of Nations, if it had joined the US in 1776 would have trade patterns north to south with trade between Vermont and New Hampshire to Ontario, Birtish Columbia with Washington state, instead of the east to west trade of the last 250 years with western Canadian product shipped to the more populated east. Alberta has 12 % of the population of Canada of 40 million or about 5 million people and contributes 15% of the Canadian economy.

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The broken world economy has hurt the American people, in small communities and towns across the US whose societal fabric was destroyed by a system of world trade with abuses done by China. Japan, European Union, Canada and Mexico since 2000. Shortsighted American leaders and economists allowed this to happen. Robert Lighthizer on the New World Order a new system of world trade that replaces the old in 2026. The old trading system was one in which lip service was made to free trade while all the time the system was used by Japan, Germany, China, Canada, Mexico and other nations to build non tariff barriers and other policies to support their industry  at the expense of the United States leading to disillusionment in the US. The facts are mind boggling- the loss of 5 million jobs, many small communities across the US decimated with loss of jobs. About 20 trillion in wealth transfers to China and other countries over 2000-2020, with foreigners owning $27 trillion more of US assets than the US owns of theirs. US Trade Deficits that went up by 40% in 4 years of the Biden administration from $800 billion to $1.2 trillion. Economists and weak leaders got it all wrong allowing this to happen from Geoge W. Bush to Clinton Bush and Obama. Lighthizer says "shortsighted leaders aided and abetted this process," from 1990 to early 2010. Consider that US had 17.3 million  people in manufacturing, in factories all over the US in 1970, in 1999 we had the same number of jobs, even though there were changes in technology and productivity- the US held its own with the rest of the world. The Bush, Obama years were the worst for the US industry - by 2026 we have 12.6 million - loss of 4.7 million jobs since 1999. And real median household income took a big hit growing from $72,000 to $84,000 about 17% in the last 25 years, compared to twice that in the period 1975-2000 prior quarter century. The result is the fracturing of American society- and dire consequences for healthcare as communities suffered from loss of jobs leading to drug overdoses, alcohol abuse and suicides, which are common in post industrial American communities. Think of this fact: two thirds of America's workforce that does not have a college degree, that is working class people, lives 8 fewer years than college graduates, a gap that was only 2.5  years in 1992. The wars carried on by Bush and continued by Obama in the Middle East also wracked these same communities till Biden and DJT pulled out. One has only to drive across America to see this with one's own eyes. Trade may be an abstract topic for economists and politicians- there is nothing abstract about this. And the economic growth of the US has suffered with the unfair trading system with China, European Union, Japan, Canada and Mexico. From 1945 to 2000 American growth was 3.2% a year. Since 2000 only 2 years of growth over 3%. US has not seen historically normal growth for the last 19 years and at this rate (if we continued along this path) the Congressional Budget Office says 1.8% growth for 2027-2035. There are other factors yet the the major driver of this is our trade deficit of $1.2 trillion dollars a year. It is a story of remarkable persistence in the Nation's interest through 2 adminstrations- this Lighthizer story. Lighthizer fought Japanese commercial interests as Deputy Trade Representative under Ronald Reagan, and as US Trade Representative under DJT in the first DJT administration in 2016-2020. His Deputy at the time is Jamieson Greer who is now the US Trade Representative in the second DJT adminstration in 2025. For 30 years this brave American patriot has fought to reverse the bad actions of presidents and economists that have led to devastating losses in the American countryside. He says any new trading system must be perceived as fair to working people. It will survive only if working people think it is good for them. It cannot and must entrench a small, permanent elite. The benefits going to labour must be at least as great as those going to capital. It should create fulfilling high paying jobs for the vast majority of the American people. This is America's new promise to its people, its new compact with its people. ...

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See the full interview with US Trade Representative Jamieson Greer done by a former USTR and economist Michael Forman (Under Obama) at the Council of Foreign Relations. Here Greer makes valuable points about trade with Canada. America's automobile industry did not set up because American car makers decided to build in Ontario, Canada. It was because in a Trumpian way Canada told the US carmakers, if you want to sell in Canada you must make the cars in Canada. And today what does Canada under PM Carney say- that America is breaking the stable world order simply for DJT asking that cars sold in the US be made here or face US tariffs. What was right for Canada for decades should it not be right for the US also? The Europeans, Canadian and China's elites are not seeing that what the US did post war 1945 to rebuild their countries and the cooperation extended to them -in the same manner these countries owe it to themselves, to the world, to fairness and transparency in their dealings, to act in responsible ways. ...

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Putin visit to Beijing follows DJT visit by 2 weeks May 2026. China must carefully assess its interests in a trade relationship with the US and the EU, vs good relations with Russia and access to oil and gas supplies.

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Samsung stock price up 144% Intel up 255% in 5 months of 2026, as the S&P makes eight weeks of consecutive gains May 23 2026. Companies in the S&P 500 trade at 21 times their expected earnings over the next 12 months, the 10 year average is about 19 times their expected earnings. The war in Iran, the war in Ukraine, and the massive misallocation of investment to AI are risks for the US economy, yet the US stock market continues to be robust.

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  It appears from the timing and stature of Marco Rubio's visit to New Delhi, and Jaishankar's response that the US and India have both learned a lot on how to setup a vigorous relationship as business partners and as global powers, acting with maturity and patience. Rubio's very presence in New Delhi at a crucial moment in May, the fact that after the US president Marco Rubio is a popular and respected leader in the US. After talks with Marco Rubio, US Foreign Minister, India's Foreign Minister Jaishankar says he had a close relationship with Rubio. Rubio says the first person he saw after taking office onthe same day he first visited the State Department was Jaishankar, calling Jaishankar one of the best and most knowledgeable India has to offer. Jaishankar sees growing convergence in India's position with that of the US in West Asia for open maritime navigation, international law, and the importance of strategic trust partnerships and resilient supply chains to de-risk the global economy. Gone are the days when India caught up in a vague "non-alignment" movement that the Europeans are now practicing by distancing from the US, India accepts a robust US-India partnership in the interest of all countries.  Jaishankar put it this way to support the US-   “One, that we advocate dialogue and diplomacy to address conflicts. Two, we support safe and unimpeded maritime commerce. Three, we demand scrupulous respect for international law. Fourth, we are against the weaponisation of market shares and resources. And five, we believe in the value of trusted partnerships and resilient supply chains to de-risk the global economy. Rubio met with Prime Minister Narendra Modi on Saturday.  An interim agreement on trade is being prepared so that a final agreement on trade and investment can be signed. On energy India is keen on getting energy supplies from the US, - “We spent some time today discussing energy issues, and again, you’re all aware that our government’s fundamental responsibility is to address the needs of 1.4 billion people. Ensuring the accessibility and affordability of energy for them is our prime objective. Secretary and I therefore welcome the expansion in our energy trade in recent months. Diversified supplies are at the heart of energy security for India." ...

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Thucydides, Greek historian on the Peloponnesian War between Sparta and Athens 431 BC, cited by Xi Jinping of China during DJT visit to China, May 2026. “Can China and the United States transcend the so-called ‘Thucydides Trap’ and forge a new paradigm for major-power relations?” "Thucydides Trap," is about one established power being threatened by another rising power, as Sparta felt threatened by a rising Athens in the Greek world around 431 BC, leading to a long over 30 years war.  “The Taiwan question is the most important issue in China-US relations,” Xi said, of Taiwan, an island near China's coast where ChiangKaishek set up his government after the fall of his government in Beijing in 1949 to Communist People's Army of Mao Zedong. “If mishandled, the two nations could collide or even come into conflict, pushing the entire China-US relationship into a highly perilous situation."  What China sees is a future of strong economic growth based on China having built its industrial strength and world trade to exceed 1.2 trillion dollars of trade surplus in 2026. Yet this is only the beginning. US and European Union, and India+Japan are three economic regions compared to the situation in Greek history. The combined three economic regions potential for scientific and industrial advances in the future till 2045 in a synergistic fashion one building on top of the other's advances, far exceed the potential of the Chinese economy and industry by itself. This is why any such conflict may over time fizzle away as three economic regions of EU, US and India advance, particularly the 1.4 billion people of India, which will see growth rates of 20% annually for 10 years to 2035 in Eastern Indian region of the size of the EU. That region extends from Lucknow and Patna to Vizag and Chennai. Another aspect of this concerns China itself which sees slowing growth of 5% in 2026. Growth could slow further as US, European Union and India/Japan push back on Chinese exports during a period of reindustrialization in US, EU, Japan and rapid industrial development in India to 2040. China's development is only midway in terms of per capita GNP which lags most of Europe and the US, Japan. Thus the main concern in China is that China will not be able top go beyond middle income country as its demographics and aging population look more like Japan's over the period 2026-2040. China needs the US EU trade and markets for it to meet the needs and aspirations of its 1.4 billon people as the other engines of development such as housing construction, infrastructure building, have lost momentum. ...

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US DJT administration using Section 301 creates the tariffs the US Supreme Court struck down- the EU, Mexico, Canada at 10%, Japan,, India China at 12.5%- June 2 2026. These countries are not doing enough to control the importation of products made with forced labour. This only goes to show what was said at that time and which the SCOTUS itself said the DJT administration could do, find other laws by which the same tariffs could be imposed. By the time the US Supreme Court reviewed the case it was already clear that all these countries had accepted DJT tariffs, and most had negotiated fair deals with the US including making up for past abuses by these countries of the international trading system. The US Supreme Court its shortsightedness ignored this or did not quite grasp this as Justices legal knowledge of facts does not mean grasp of the facts of commerce, trade and business and the history underlying it. Jamieson Greer interviewed at the Council of Foreign Relations this week and Robert Lighhizer in Foreign Affairs (covered and summarized on these Lyrarc pages this week as found rarely in other places) have documented these abuses in detail leading to the US losing $20 trillion in wealth shifted to these countries and its manufacturing dependent communities devastated by loss of over 5 million jobs through the shortsightedness of Bush/Obama adminstrations who let this happen, and these countries that took advantage with reckless disregard for these communities in the US, on a scale unknown in history.  ...

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Securing transparency in financial receipts and their use by Labor Unions is a battle being fought since the Days when Robert Kennedy called this "the Enemy Within," and the Nation was shocked by the corruption in the Labor Unions. Since the days of Tammany Hall and Teddy Roosevelt's effort to clean up the system in the 1890's this is a forever battle. US auto unions benefitted from recent changes as old labor bosses were turned out and free and fair elections took place. The Washington Post says the added requirements for trade unions to file detailed disclosure of how they use funds is necessary and a good change made by the current Labor Secretary. Putting these disclosure forms online is also a good step as all workers can see where the money is going. The Post says no union boss should be afraid of more sunshine.

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Cordoba and Gurman cover the Justice Department case against Raul Castro, 94 years, of Cuba who runs the country. Jim Ratcliffe of the US government visited Cuba recently to let the Cuban government know that it had to make changes and there was a limited window. Raul Castro was defense minister, and is brother of Fidel Castro, the revolutionary who fought to overthrow the government of dictator Batista, made some short term improvements, but failed badly for the Cuban people with a policy that confronted the US and brought foreign powers to the western hemisphere. China could remain communist, keep Mao's memory, and adopt the market system, to develop the modern economy it has because of adopting western ideas, science and technology. And build what is otherwise a free market economy, and became a key trade partner, briefly an ally of the US as the Soviet Union collapsed- nothing like this happened in Cuba. Tourism was used simply as a way to protect the rest of the completely centralized economy and a state within a state built through an elite that ran a separate section of the armed forces under Raul Castro, kept a regimented society. Even that has failed. Nowhere in Latin America is there so many signs of failure, and it has also brought down societies that copied the rhetoric and nationalist slogans such as Venezuela and Colombia. In some parts of Mexico the Cuban rhetoric still sounds good but the reality is starkly different, Mexico itself is run on a model closer to that in the US, and Mexico has serious problems in civil society relating to immigration and drugs in its relationship with the US. ...

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The media in US and in Europe presents the US and China on a confrontational course little aware that there is quietly emerging a new trend encouraged by both leaders of the two world powers. "Strategic Stability" in US -China relations instead of China seen as a rival and a threat- is now the goal of Xi Jinping of China in 2026 US-China dialogues and meetings. This was abundantly clear during the DJT visit to Beijing August 14 2026 and will continue to shape relations during Xi's visit in September. This is different from the confrontational attitude taken by both DJT in the first administration and Biden in his four years in office. The result is that these tensions are being gradually brought down which started in 2014, were exacerbated by Covid pandemic in 2019, and were put to the test in 2025 with tariffs policies of the incoming DJT administration. A decade of mistrust now being replaced by  buildup of cooperation, establishing a sense of trust and friendship. Partly out of necessity and partly from choice.This was not secured by giving up on issues the US or China saw as important. US did not concede anything on issues of fentanyl entering the US from Mexico, and tariffs for reducing trade deficits. Similarly China did not concede much on issues it saw as important, mutual respect for China as a significant power, and seeing China's different system of government and industrialization as legitimate and worthy of respect. On Hong Kong and on Taiwan both sides decided to see ambiguity and live and let live as the best option. So that in 2026 nothing, not the Iran War or anything that happens in the Middle East is to be allowed to deter both sides from making the educated good and decent choices that are available to them based on attitude of mutual respect.  ...

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US Trade Agreement with Japan $550 billion in investment in US and 15% tariff. The 15% tariff is lower than the 24%-25% tariff DJT had imposed on Japan.

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Three tankers held off the coast of Mumbai by India's Cost Guard have been sanctioned for carrying Iranian oil. India stopped buying Iranian oil in DJT's first term 2016-2020. In his second term DJT wanted India to stop buying sanctioned Russian oil as a way to reduce funding for Russia's invasion of Ukraine now in its fourth year. India has stopped buying Russian oil as part of the goodwill effort to reach trade agreements with the US, EU, and Germany. The seizing of the oil tankers is part of a new effort by India to support bringing Russia to the negotiating table to end the Ukraine war. Russia has demanded Ukraine turn over Donetsk region to end the war, which is a major stumbling block as Ukraine says there are Ukrainians living in Donetsk region. Germany's increase in its defense budget and investment in its armed forces has led to Germany+ (Germany plus UK and France) acting as the chief supporter of Ukraine, after the US has taken more of a neutral stand. The US basically wanting to end the war in 2026 so that the US can address the situation in the western hemisphere with drug and migrant trafficking gangs in Mexico, Venezuela and Columbia, and rebuild its economy to bring back manufacturing from China. For India the guiding principle of its foreign policy is Gandhiji's thinking and advice for fairness and peaceful coexistence - it does not believe in a British inspired NATO expanding on the borders of Russia, and at the same time does not see how a war on a neighboring Russian speaking region is in Russia's continued interest for a fourth year with bombing of energy infrastructure to leave Kviv in darkness. Non -alignment was Nehru's not Gandhiji's idea- the ideas of respect and fairness are basic to Gandhiji's thinking and India will remain true to his ideas in world relations. One aspect of this change in world affairs is missed by all and the media, that is that with the EU and US+ Japan, and India+ Indonesia there is a population of 1 billion of western peoples, and about 2 billion of Asian peoples, for a total of 3 billion people. This is a region three times the size of China, which with its access to capital and technology, labour and good governance is in a position to industrialize and reindustrialize, and bring manufacturing/science and technology to the core of this economic region by 2035. An industrialized India with 2X-3X the size of its current GDP will still be governed on Gandhiji's ideas for world relations in 2047. ...

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The U.S. and China sign Phase 1 of the trade agreement in a sign of reduction of trade tensions between the two countries. Difficult issues of state subsidies under China's state enterprise model of development, and technological competition were put off for the future. China made the deal possible by agreeing to double its purchases of agricultural products, and offering to purchase about $200 billion in American goods and services over the next two years. This gives relief to farmers, a key part of Mr.Trump's support base. This also helps achieve a key Trump and U.S. goal of cutting the U.S. trade deficit with China quickly, just as happened decades ago with Japan.  See the related article and link on how for the first time in decades China's trade surplus with the U.S. is now set on a path for permanent decline. It dropped significantly in 2019 by 12.5% even though China's imports from the U.S. dropped by 21%, based on Chinese customs data released for 2019. With China increasing these imports significantly and the U.S. holding on to tariffs of 25% on $250 billon of China's exports to the U.S. which are outside the Phase 1 agreement, the downward course is set for the next few years for correction of a dangerous trade imbalance. That imbalance was allowed to develop over successive Republican and Democratic administrations. China already has the European Union as its first leading trading partner and south east Asia as its second. China plans to not be so closely intertwined with the U.S. in trade, and yet preserve its state sponsored development model and drive to compete in technology. China's increased purchases from the U.S. of $200 billon are broken down in terms of farm products- $32 billion, manufactured goods- $80 billion, energy products- $50 billion, services $35 billion. In effect the U.S. gets its goal of cutting the unsustainable China trade surplus quickly and with certainty in 3-5 years. China uses the period to transition for less trade linkage with the U.S. yet preserving its state sponsored model of development and drive for technological advancement.   ...

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BJP Modi election win in West Bengal and upset by TVK party in Tamilnadu states of India are a result of existing state governments not meeting the aspirations of young people in India for jobs, lack of progress in industrialization and lack of investment in infrastructure. These are the pressing priorities in India. Whoever can deliver on modernization and industrialization, jobs and infrastructure to meet the aspirations of the Indian people is likely to prevail. This is also no different than the process underway in the US and Europe for reindustrialization and remodernization, updating infrastructure built in the 19th century, jobs and incomes. The BJP party of prime minister Modi has set the bar high for modernization of the scale of China and Japan for India, and to even surpass them.  It is definitely doable, particularly now that India has built trade links for import of new technologies with the US and the EU, and when it is already an economy the size of Germany or Japan. Most of the Opposition parties cannot believe this is possible, and most of the media that covers India has the same views. As a result the titles and the discussion in the media are like that of 15 years back when India was led by parties that lacked the will and drive for industrialization and modernization, corruption and mismanagement dissipated resources, could not create the master plan and execution needed,  and lacked the leaders at the ministerial level to accomplish this to deliver on every promise. In fact the elections of the last 2 years have created a new northeastern India - changed the map completely with the growth in a region half the size of the European Union of 300 million people that is able to grow at 20% a year for 10 years in Bihar, West Bengal, and Orissa, Assam regions, where the mighty Ganges and the Brahmaputra rivers flow into the seas from the Himalayas. There is that much potential and it means India itself can grow at rates of 10% once all the conditions are right in a few years to 2047 for Vikshit Bharat, Modernized India. The world economy can also grow with such a vibrant dynamic India. ...

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

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

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US and UK complete a trade agreement, the first of its kind with major trading partners. US has a $11 billion surplus in $148 billion two way trade with UK which is just ahead of India and behind Vietnam in trade with the US. Vietnam has acted as aproxy for Chinese exports to US something the DJT administration is taking action to correct. UK first 100,000 cars exported to US will not face a 25% levy, and UK exports will only face the 10% levy on all countries, including on British aluminium and steel. This agreement happened Thursday May 8 after a night call from Trump to Starmer moving up the negotiations to get awin for the US and the UK, that will also act as a model for other countries to reach trade agreements with the US. India, Japan, South Korea, could be next followed by EU. It also opens up engagement with China on a trade agreement. UK's Starmer thanked president Trump. The agreement was a first and it boosts stock markets in the US, shows the US can do this. ...

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If the trade war escalates to the point at which president Trump imposes tariffs on all Chinese goods imported into the U.S. on Jan. 1, 2019, China could retaliate with its own tariffs and this might affect Boeing aircraft as well. The results would be to tip the economies of both countries into a recession, and affect Mr. Trump's best chances for reelection in 2020. This can happen as Mr. Trump has a great deal of confidence in his negotiating style. The negotiations so far have shown China misread the U.S. and Mr. Trump leading to a strong U.S. response.  There is also the importance of not losing face, Mr. Xi's domestic audience, Chinese industry that sees a fundamental change from state subsidies model as eroding its position and offering resistance, patriotic sentiment making it harder to meet U.S. demands. Fundamentally for Mr. Trump it is about U.S. trade deficit and changing the huge trade surplus of almost $1 trillion that China enjoys each year with the U.S. which has been and is no longer sustainable. Mr. Trump also has the backing of Republicans on this issue and Democrats cannot afford to be soft on this issue as it involves American workers and jobs are at stake. Both sides could be in for a protracted negotiation as Mr. Trump feels it is right for Americans to expect fair trade and technology transfer that respects American concerns. In addition the U.S. could sense that it exports less to China, is less dependent on exports than China, and as the party that is hurt by unfair practices insist on its position. After Japan agreed to U.S. demands that it reverse a huge trade surplus in the seventies in which Mr. Lighthizer was the negotiator its growth declined sharply and is economy stagnated. China may sense inside that this could happen to its economy. Today Lighthizer the U.S. negotiator and Trade Representative could also push hard because of he was able to convince Japan to change its course. ...

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A big win for the US and a win-win for the European Union in the sense that it brings stability to the trade relationship. For the US it brings a level playing field in world trade that had suffered fo far too long from unfair advantages taken by Japan, Canada, European Union and other nations, in addition to the serious distortions of the world trade system with China's state version of capitalism financing an export model. So the first step was to straighten out the situation with partners and allies the US has supported in the past 75 years. US European Union Trade Agreement is reached July 27, 2025, at meeting between Von Der Leyen of Eu and DJT of the US in Scotland. It includes $750 billion EU purchases over 3 years of US oil and gas, LNG, nuclear fuel, semiconductors, etc and $650 billion in investments in US, including military purchases. It puts a 15% tariff on all products from the EU entering the US, replaces the tariff of about 5% under Biden. On Pharmaceuticals it is what the US president decides says Leyen, though for now it is included.  The EU Trade Commissioner Maros Sefovic says- “I think that what was most important for us was to make sure we would have this predictability and we would have stability for our businesses." ...

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This exceptional report by Ian Talley in the WSJ cites trade and currency expert William Cline about the prospect of a worsening trade deficit under the Trump administration. With an improving economy, says Cline, the dollar had already surged about 8% beyond its fair market value during the last 2 years under president Obama as the economy improved. After Trump's election it surged another 3%. This makes it likely that the trade deficit could approach 4% of GDP with the stronger dollar. More protectionist policy to support U.S. industry, worsening trade deficits, more trade friction could be expected in these conditions. He does point out that markets may be overestimating what will be spent on infrastructure, and how much interest rates will go up which support a stronger dollar. Yet the fact remains that under an administration that is keen on promoting U.S. exports a dynamic is underway that makes U.S. exports actually less competitive in international markets.

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For the first time in decades the U.S. trade deficit with China is falling significantly. China's exports to the U.S. dropped 12.5% to $296 billion in 2019 from $323 billion in 2018, according to Chinese customs data. Actually China's trade surplus with the U.S would have fallen even more had not the U.S. exports to China declined by 21%. With the Phase 1 trade deal negotiated recently U.S. exports to China will increase significantly, while 25% tariff on $250 billion in Chinese goods still in place limits China's exports. This means in 2021 and 2022 and years ahead China's surplus should shrink much faster achieving one of the principal goals of Mr. Trump and his trade negotiator Mr. Lighthizer. Mr. Lighthizer was chosen by Mr. Trump for having accomplished a similar goal decades back in the eighties with Japan's surplus. Even though China has not stated this in writing, American officials have said China will increase purchases of American goods and services by at least $200 billion over the next 2 years from 2017 levels. China and the U.S. have essentially agreed that the two economies so tightly intertwined works to the detriment of the U.S. with the Chinese surplus creating tensions. China will now have the European Union as the largest trading partner followed by south east Asian countries, and other regions. China decided that its priority is technological development and was unwilling to meet U.S. demands to reduce its efforts for technological competition and access to western technologies. Instead opting for shifting it economy away from dependence on exports to the U.S. in a gradual way. The other demand of the U.S. for stopping state subsidies is also a concession China is not willing to make as it sees it as an economic feature of its business model that is working and a competitive advantage.  This leaves the U.S. with a limited win so that trade and resulting jobs can be brought into favoring the U.S. a key Trump goal, and not a win in the technological competition with China which will continue. ...