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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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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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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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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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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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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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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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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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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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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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Iran Ceasefire shaky May 11 2026 with no willingness on the part of IRGC Iran (Iran Revolutionary Guard Corps) to send all nuclear materials out of the country. Past experience has shaken American confidence in IRGC Iran's willingness to give up nuclear weapons development. Under president Obama some nuclear materials were sent to Russia, some left inside Iran which were after an agreement used by IRGC Iran to develop weapons grade enriched uranium, putting the situation back to where America started before the agreement. This is behind the DJT Republican administration's effort to get all nuclear materials out of Iran. This has wasted another decade for Iran, diverting resources needed for improving standards of living and cost of living to the weapons programs. The result is internal protests that were widespread in Iran including the middle class, not just students. So that today Iranian people are divided on the issue whether Iran should against all prevailing Middle Eastern and World opinion go for a nuclear weapon. The situation of clandestine development in North Korea and Pakistan of nuclear weapons is not existent today as the US is monitoring it constantly. Israel sees these weapons programs in Iran as a threat to its existence close to its borders in Lebanon and Iraq, which makes it unlikely that clandestine development is possible for nuclear weapons development anywhere in the Middle East. The UAE has also shifted its stance in favor of the US, Saudis want assurances, and India, Pakistan Egypt are in different ways seeking a denuclearized Middle East. This means the American DJT administration is NOT ALONE on this issue as the media in the US and Europe are presenting. Germany's Wadephul and Merz are closer to US thinking on this issue than the media says. Macron and Starmer are at popularity of less than 20% in France and the UK and do not reflect the opinion in France and Britain, and in Europe on this issue. In this sense the US is doing this for a safer world, for China, India, Brazil and EU, all the nations in the poorest parts of the world in Africa, Asia. These poorest nations which are bearing the brunt of this obsession with nuclear weapons development by IRGC Iran in a Middle East torn by 5 decades of wars from Kabul to Damascus, Baghdad to Tehran, by IRGC Iran (Revolutionary Guard Corps), as these poor nations confront lack of oil and fertilizer supplies. It does not come at a good time for even the largest nations about 3 billion people in China, India and Indonesia, Egypt which are suffering from the effects of oil shortages and fertilizer shortages when possibly at most about 40 of 90 million people in Iran support weapons programs, all others in Iran seeking a way out for better standards of living and living at peace with neighbors and the world. In that peacetime Middle East the Palestinian people could find solutions like the Irish people with the goodwill of all neighbors. ...

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This report in The South China Morning Post in Hong Kong, gives insights into the Chinese position in trade war with the U.S.  China has its own internal groups which support China being able to take a leadership role in world affairs. Xi Jinping made giving China a prominent role in the world a feature of his presidency. China  has this internal audience and its own sense that China's resurgence was won with hard work and cooperation, plus dedication of the Chinese people. In the past Japan and South Korea also used state subsidized industries, and subsidies to gain leadership in key business sectors involving high technology. China would see this state subsidies model as its own model of development. From this standpoint the U.S. demands on subsidies as unfair competition could be seen as changing a key part of its economic model.  Asking China to put everything in writing and show tangible proof of enforcement as the U.S. insisted in talks, was too much for the Chinese side. China said trust us to do this, and lift the tariffs based on our verbal assurances. The U.S. having seen decades of no progress on this point, wanted tangible proof before tariffs were lifted. Added to the demands on subsidies were the demands for no more of what the U.S. calls stealing of U.S. technology through forced transfer of technology by U.S. firms as a condition to operate in Chinese markets. With the U.S. lagging in 5G technology and Huawei ahead the issue resonates on the U.S. side. Add to this Mr. Trump's key voter base includes the former Democratic party supporting workers who have shifted to him because of trade agreements and policies of Clinton and Obama that hurt American workers through seemingly endless closure of manufacturing plants from Chinese competition.   ...

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The rise of Japan was a major challenge for president Reagan in the 1980's in the way president Trump is confronting the rise of China. The Reagan administration obtained the concessions it needed from Japan. The negotiator for the U.S. side during the Reagan years - Robert Lighthizer. Lighthizer is using his experience in winning concessions from Japan in his role as top trade negotiator with China.  As the WSJ points out Japan ceased to be a threat to the U.S. faster than anyone thought possible. 

But there is one problem even if this happens the warning is that the imbalances with Japan simply transferred over time to China. The warning is for America's tendency to spend money it does not have, and for how long.

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The U.S. and India face difficult trade negotiations as India moves to build its Make in India campaign, building capabilities of Indian manufacturing companies for global supply chains. Mr. Trump will sign a $3 billion defense deal with India for supplying helicopters and other equipment to India. Indian policy on trade is to ensure local content and transfer of technology to build capabilities of local companies. The goodwill generated by the visit by Mr. Trump to India, and deals on defense could lead to agreement on other trade issues, as India and the U.S. balance other considerations such as the rise of China into the picture. This will take time and is likely to be done after the elections. Differences on tariffs will continue in the same way that differences with China led only to a partial deal, with contentious trade issues on technology left for the future.

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China is using inspections, extra bureaucratic hurdles that increase U.S. companies costs. This is closely correlated to the trade war with the U.S.

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Brazil's ever increasing production of soyabeans and investments in Brazil by China and US's Cargill ADM result in a oversupply of soyabeans in world's markets leading to lower prices for American farmers. 70% of soyabeans imports by China were from Brazil in 2024 and Cofco state owned agricultural company in China is building a large port terminal on Brazil's coast to handle soyabeans and other exports. Trade tensions with the US mean there are no written agreements farmers can count on for soyabean exports to China. China purchased 13 million metric tons from Argentina last month and committed to buying 25 million metric tons in 2026-2028. Argentina lifted its 26% export tax for the first $7 billion in agricultural exports to bolster it's peso recently. US is turning to other markets in Turkey, Egypt, Morocco, Pakistan, Bangladesh, Thailand and Europe to make up for volume lost to Brazil. For September and October there is a 45% increase in US exports in 2025 resulting from these non-Chinese buyers. No mention is made of India, yet India could in future be a significant buyer of soyabeans because of thenutritional value of soyabeans in an anti-cancer diet and the high protein content which would make Indian diets healthier. In agriculture farmers are not the ones who develop new tastes and new trends in new markets, yet this effort should be part of farmer's outreach to other nations and other cultural food habits with shifts to healthy nutrition. ...

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A company making table tennis tables in Uttar Pradesh, India, gains access to the US market as supply chain reorganization takes place.

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A Chinese economist's view of the issues raised by the appreciation of the yuan. A rather gloomy assessment of the US and its prospects in the global economy. A comparison of the US with Greece.

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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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Three BBC correspondents on China's 2026 National People's Congress - effort to invest in childcare and elder care services to increase consumer spending. To continue in solar, robotics, AI, EV's, and exports as before. The problems of industrial overcapacity and pushing subsidized product into the US or EU that cause trade tensions and tariffs will continue.  New 301 investigations by US Trade Representative are taking place and will complete by mid-July. Germany's chancellor was in Beijing making a similar point about industrial overcapacity and German business is now facing the same threats to their business that the US has gone through. The one other way for China to grow is to increase consumer spending- hence the effort to help young people with childcare costs and retired people with elder care. The payments to seniors is low says the BBC's McDonnell who says the increase in payment to rural and non-working urban residents of $3 per month is miniscule. No details given for housing support to newly married couples. On one aspect relevant to the Iran war-China is increasing its efforts on renewable energy to reduce imports from volatile Middle East. ...

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 U.S. Trade Representative Robert Lighthizer, views China's response in trade negotiations as one of conducting extended negotiations that lead to little change. This has continued says Lighthizer for over a decade putting the U.S. at a serious disadvantage in trade. At a White House meeting in August 2017 Lighthizer convinced president Trump that China was in his words "tap, tap, tapping us along."  This confirmed president Trump's own instincts about the U.S. trading relationship with China. Lighthizer is a veteran of trade negotiations, having experience in the Reagan administration as the Deputy Trade Representative in 1983 in negotiations with Japan, when Japan was in a similar situation that China is today. At the time trade negotiations with Japan were getting nowhere. Lighthizer is said to have turned one Japanese response in negotiations into a paper plane and sent it flying right back. Lighthizer does not seek the limelight but is serious about his role having published op-eds in the NYT and WSJ since 2000 about how U.S. trading relationships were putting the U.S. and U.S. workers at an unfair advantage. Many of these op-eds are in the Lyrarc archive and a Search with the term "Lighthizer" would bring up these articles. This report in NYT shows how the role of Lighthizer was not anticipated by China when it sent Liu He to Washington in November 2017 to negotiate with the U.S. President Trump made certain Liu He and other Chinese leaders would have to talk to Lighthizer first. In a session with president Jinping laid out U.S. views that the past negotiations had accomplished little and new negotiations had to be undertaken very differently from negotiations in the past. Earlier in July trade negotiations conducted by Commerce Secretary Wilbur Ross were "shut down" by president Trump because China continued to repackage earleir offers which meant little to the U.S. As a lawyer at Skadden, Arps, Slate, Meagher LLP Lighhizer represented steel industry clients hurt by subsidized Chinese steel industry imports. Mr. Trump and Lighhizer have bonded well because their instincts have been the same- that the U.S. had not been well represented in earlier negotiations by lawyers who saw themselves as speaking for American exporters.  Lighthizer is also a seasoned trade negotiator and has waited for the right time and situation to tackle the unbalanced trading relationship with China. For 30 years Lighhizer represented American manufacturers as he practiced trade law at the Skadden law firm. His strategy has been to get the administration to unite behind a clear trade strategy. He says "I try to be friendly in trade negotiations. I am not the theatrical type. The art of persuasion is about knowing where the leverage is." At this time the leverage lies in the huge trade surplus of about $300 billion China has with the U.S. The U.S. goal is to bring this down by $100 billion through this new negotiating strategy as earlier negotiations have failed. ...

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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.   ...

LyrArc Article Gist
In extended diplomacy Carney visits Beijing, China and says middle powers are seeking ways to interact and trade in a world of big power rivalry. His visit is followed by visits by UK's Starmer and Germany's Merz, and preceded by Macron. At the same time Merz visits Ahmedabad for a kite festival and signs a new trade agreement with India, followed by Leyen and Costa of the EU who sign a EU-India trade agreement for 27 countries of the European Union. All this suggests carefully planned effort in Europe to create new channels of trade and reorient existing trade relationships that will be more resilient with the US shifting to focus on Monroe Doctrine idea of the Western hemisphere as its region of influence and security. This report shows pictures of Starmer and Xi meeting at the Plough Pub in UK in 2015 and reflects on how this has changed 11 years later with China now  a dominant power with the world's 3rd largest economy and a third of world's manufacturing and logistics. How does this change the relationship with China in 2026 for UK and Canada, and the EU? At the same time Germany-India and EU-India relationship creates a 2 billion people market with capital, technology and labor potential to create the largest potential driven economic group in the world, combining EU's 20 trillion to India's $4 trillion economy and mutually complementing, which has potential to rival the US at $30 trillion by 2030 as India grows rapidly in the new EU/Germany/India market and the EU gets a new boost with the complementarity of the two regions by 2035. This suggests that something new is happening and Germany after a lot of soul searching have hit on something we should see blossom by 2030 in the way China has grown since that picture with Cameron of Xi at the Plough Pub in UK. A problem China faces as it continues to push exports is that EU/ India and US will take in less exports and there is only so much it can put in Latin American and African market, UK/Canada market leading to industries with massive oversupply. Major economic redirection may result from the Merz/Leyen/Costa visit and firming up trade agreements with India if the EU, Germany and India have the determination to seize this opportunity in the 21st Century. As Leyen said it has the potential to create a stable world with values of the Bible, the Bhagavad Gita, and Mahajima Nikaya of the Buddha supporting the industrial states that emerged from the Industrial Revolutions. ...