This Will Make Some People Very Unhappy

Breitbart reported yesterday that the latest Farm Journal Pulse Poll shows that President Trump has an 83 percent approval rating among American farmers. That is a point higher than the previous poll. The disapproval rate in 18 percent. This is one of many reasons the Democrats want to get rid of the Electoral College.

The article reports:

“Of note is the strongly approve category went up three percentage points from an already lofty (December) number and his highest overall approval ratings ever,” said Pro Farmer policy analyst Jim Wiesemeyer.

“That says the president’s approval is rock-solid,” Wiesemeyer added. “With the recent upbeat news on USMCA and the Phase 1 accord with China, the ratings will likely remain firm ahead.”

Farmers who stated they “strongly approve” of President Trump rose to 64 percent in January, up from 61 percent at the end of 2019. A mere 19 percent said they “somewhat approve” of President Trump’s performance, while only three percent said they “somewhat disapprove.”

“Trump needs the rural vote to keep the same states he won in 2016 in his win column come November,” Wiesemeyer said. “In fact, contacts say he is focusing on winning Minnesota this time as a backstop should he lose a state he won in 2016. That means agriculture will continue to be a key topic in the president’s re-election campaign.”

The President has the support of people who have been positively impacted by his trade policies. Informed Americans understand the good things President Trump has done for America.

Why I Love The Alternative Media

Yesterday John Hinderaker posted an article at Power Line Blog titled, “Landmark Trade Deal With China; New York Times Hardest Hit.” The article details some of the actual facts of the trade deal and contrasts those details with the reporting of The New York Times.

Some examples:

Reaction was predictably partisan. On CNBC, Steve Bannon said that President Trump “broke the Chinese Communist Party,” and the U.S. “gave up very little in the end.” On the same program, hedge fund manager Kyle Bass said that he sees the agreement as a “‘temporary truce’ in which the U.S. got the better of China.”

At the New York Times, on the other hand, there was wailing and gnashing of teeth:

President Trump signed an initial trade deal with China on Wednesday, bringing the first chapter of a protracted and economically damaging fight with one of the world’s largest economies to a close.

Has the trade conflict with China damaged the U.S. economy? To some degree it has, although it has certainly hurt China’s economy more. This is the kind of short-term pain that Barack Obama, for example, was unwilling to accept. And yet economic growth under President Trump has been considerably better than under Obama.

The deal caps more than two years of tense negotiations and escalating threats that at times seemed destined to plunge the United States and China into a permanent economic war.

No one thought “permanent economic war” was a realistic possibility, except, perhaps, readers of the always-hysterical New York Times.

The agreement is a significant turning point in American trade policy and the types of free-trade agreements that the United States has typically supported. Rather than lowering tariffs and other economic barriers to allow for the flow of goods and services to meet market demand, this deal leaves a record level of tariffs in place and forces China to buy $200 billion worth of specific products within two years.

Phase One reduces or eliminates some tariffs and leaves others in place for Phase Two. This isn’t really all that complicated, but the Times wants its readers to think that Trump’s approach represents a departure from an imagined, purist practice of the past.

Please follow the link above to read the entire article. It is a beautiful example of how the mainstream media takes good news and attempts to make it bad news because it involves an accomplishment by President Trump.

Happening Beneath The Radar

The Conservative Treehouse posted an article yesterday about the signing of the first phase of the trade deal with China.

The article notes:

U.S. Treasury Secretary Steven Mnuchin appears on FOX Business to discuss the U.S-China ‘phase-one’ trade agreement, the benefits, enforcement mechanisms and retention of tariffs and particular sanctions until compliance can be reviewed.

Phase-1 establishes the baselines; resets the ability of U.S. companies to enter China; establishes rules for market entry; and sets the parameters for enforcement. Any future phase is contingent upon evaluation of phase-one enforcement mechanisms.

The article includes the following video:

The important aspect of this agreement is that no future agreements will be made until the rules of this agreement are complied with. China has been a dishonest trade partner for years and has been largely responsible for the decline of manufacturing in America. Phase-1 of the trade agreement with China is the first step in reversing this trend.

Good Economic News Created By Good Leadership

Trading Economics reported the following:

The US trade deficit narrowed to $43.1 billion in November 2019 from a downwardly revised $46.9 billion gap in the previous month. It compares with market expectations of a $43.8 billion shortfall. The trade gap shrank for the third straight month to the lowest since October 2016. Imports slumped 1% to the lowest value in 2 years due to falling purchases of aircraft, computers and cell phones. Exports increased 0.7% to $209 billion, boosted by sales of drilling and oilfield equipment, jewellery, autos, diamonds and aircraft engines. The goods trade deficit with China narrowed 15.7% to $26.4 billion, with imports dropping 9.2% and exports jumping 13.7%. Year-to-date, the total deficit decreased $3.9 billion. The trade war with China seems to be the main cause behind the lowest trade gap. Although a lower trade deficit is likely to impact positively on GDP growth, concerns remain over the impact of falling imports in consumer spending, the largest component of GDP. Balance of Trade in the United States averaged -15090.59 USD Million from 1950 until 2019, reaching an all time high of 1946 USD Million in June of 1975 and a record low of -67823 USD Million in August of 2006.

This is the result of the tariffs and trade negotiations of President Trump.

Beginning To Level The Playing Field In Trade

CNBC reported yesterday that China will lower tariffs on products ranging from frozen pork and avocado to some types of semiconductors next year.  The Chinese economy is slowing down, and lowering tariffs is seen as a way to bring back previous growth.

The article also notes:

 

  • Next year, China will implement temporary import tariffs, which are lower than the most-favored-nation tariffs, on more than 850 products, the finance ministry said on Monday.
  • That compared with 706 products that were taxed at temporary rates in 2019.

The article cites a few significant tariff cuts:

The finance ministry said the tariff rate for frozen pork will be cut to 8% from the most-favored-nation duty of 12%, as China copes to plug a huge supply gap after a severe pig disease decimated its hog herd.

…China will also lower temporary import tariffs for ferroniobium — used as an additive to high strength low alloy steel and stainless steel for oil and gas pipelines, cars and trucks — from 1% to zero in 2020 to support its high-tech development.

…The tariff rate for frozen avocado was cut to 7% from the most-favored-nation duty of 30%, the ministry said.

…Tariffs for some asthma and diabetes medications will be set at zero, the ministry said, while duties on some wood and paper products will be lowered too.

Import tariffs on multi-component semiconductors will be cut to zero.

China will also further lower most-favored-nation import tariffs on some information technology products from July 1, the ministry said.

China has long been an unfair trading partner–manipulating their currency, disregarding intellectual property, and generally behaving badly. Hopefully President Trump’s ‘trade war’ will bring some balance into our trade relationship with China.

 

Tariffs Work

No one likes trade wars, but we continue to see evidence that tariffs (combined with economic strength) work. Bloomberg posted an article on Thursday (updated Friday) about the recent trade agreement reached between the United States and China.The article notes that the tentative agreement was reached just as more tariffs were due to go into effect against China on December 15th. Because of the tentative agreement, the tariffs are postponed.

The article reports:

President Donald Trump signed off on a phase-one trade deal with China, averting the Dec. 15 introduction of a new wave of U.S. tariffs on about $160 billion of consumer goods from the Asian nation, according to people familiar with the matter.

The deal presented to Trump by trade advisers Thursday included a promise by the Chinese to buy more U.S. agricultural goods, according to the people. Officials also discussed possible reductions of existing duties on Chinese products, they said. The terms have been agreed but the legal text has not yet been finalized, the people said. A White House spokesperson declined to comment.

While there was no official confirmation from the government in Beijing on Friday, an announcement is expected in Washington as early as today, according to people familiar with the Americans’ plans. One possible option is for U.S. Trade Representative Robert Lighthizer to sign the agreement with Chinese Ambassador Cui Tiankai, according to people briefed on the matter.

When the agreement was announced, global stocks soared to record highs.

The article concludes:

In addition to a significant increase in Chinese agricultural purchases in exchange for tariff relief, officials have also said a phase-one pact would include Chinese commitments to do more to stop intellectual-property theft and an agreement by both sides not to manipulate their currencies.

Put off for later discussions are knotty issues such as longstanding U.S. complaints over the vast web of subsidies ranging from cheap electricity to low-cost loans that China has used to build its industrial might.

Nothing is at yet cast in stone. Stay tuned.

It’s Hard To Remove A Sitting President When The Economy Is Good

It is hard to remove a sitting President when the economy is good. That rule applies to attempts to impeach the President, and the rule also applies to elections. One impact of a strong economy is that people who are making good money and feel relatively secure in their jobs are less likely to engage in class warfare. Class warfare is one of the Democrat’s most frequently used weapons.

Yesterday One America News posted an article about the current state of the American economy.

The article reports:

The latest macroeconomic data is suggesting the chances of a U.S. recession have reduced in recent weeks due to steady consumer spending. According to a recent poll by Morning Consult, consumer confidence has rebounded over the past four weeks due to ongoing job creation, gains in wages and a soft price inflation.

Even without a resolution of the trade negotiations with China, consumers are feeling confident.

The article concludes:

Retail sales have also increased going into the holiday shopping season, beating previous expectations. Consumer spending makes up for roughly 70 percent of America’s GDP growth. Many experts have tied the ongoing stable expansion to President Trump’s economic policies.

I think on the whole, this economy has been remarkable. It’s taken the headwinds of the trade wars pretty successfully…and we’re still chugging along at roughly two percent. I think that’s an accomplishment.” – Douglas Holtz-Eakin, President of the American Action Forum

A separate report from S&P Global found the probability of a U.S. recession in the coming year has dropped from 35 to 30 percent since August of this year.

I personally would like to see the probability of a U.S. recession at 0 percent, but I don’t know if I would trust the media to report that number even if it occurred.

Hong Kong Fights For Their Freedom

One America News is reporting today that the protests in Hong Kong have spread across Hong Kong’s New Territories and Kowloon peninsula.

The article reports:

Pro-democracy protesters vandalized a train station in the central new town of Sha Tin and a restaurant seen as being pro-Beijing, overturning banqueting tables and smashing glass panels, two weeks before district council elections.

Violence spilled out onto the streets of Tuen Mun outside the “V city” mall, with running battles between riot police and protesters.

Now TV showed pictures of a circular, red welt and bruise on the upper arm of one of its reporters who said she had been hit by a tear gas canister in Tsuen Wan, to the west of the New Territories, where police fired tear gas late into the evening to clear the streets.

The rail station was closed in Sha Tin, amid scuffles between police and protesters young and old, on a day of planned shopping mall protests throughout the territory. Shopping districts across the harbor on the main island were quiet.

Protesters daubed graffiti and damaged shops at Festival Walk in Kowloon Tong and “stormed” stores in Tsuen Wan, police said.

The violence spread to the Kowloon district of Mong Kok, one of the world’s most densely populated areas. Police used water cannon and volley after volley of tear gas to try to clear the main artery of Nathan Road, which was littered with loose bricks under the bright, neon lights.

Police also fired tear gas late at night in the New Territories district of Tai Po, north of Sha Tin.

Protesters are angry about what they see as police brutality and meddling by Beijing in the former British colony’s freedoms, guaranteed by the “one country, two systems” formula in place since the territory returned to Chinese rule in 1997.

China denies interfering and has blamed Western countries for stirring up trouble.

China has not lived up to the agreement signed with Britain to allow Hong Kong the freedoms it had previously enjoyed. The people of Hong Kong are fighting to regain those freedoms. We need to keep in mind that China signed an agreement guaranteeing those freedoms and has chosen to violate that agreement. This is something to remember as we negotiate trade deals with China–they are not a country that negotiates in good faith or a country that supports freedom.

Something Good Happened In The House Of Representatives

One America News is reporting today that yesterday the House of Representatives unanimously passed the Hong Kong Human Rights and Democracy Act to prevent a crackdown on the special status of the city-state.

The article reports:

The bill requires annual reviews by the State Department of whether the city is autonomous enough to justify its special trade status with the U.S. China moved to restrict Hong Kong’s judicial independence earlier this year, sparking mass protests in the city.

…The Senate is now expected to pass similar legislation that could get signed by President Trump later this month.

Evidently some members of Congress are beginning to follow the Trump policy of using economics and trade as a weapon instead of war. That is good news.

 

The Beginning Of Progress In The Trade War With China

It is no surprise that trade negotiations with China have moved slowly. President Trump is attempting to level a playing field that has been tilted for a long time. China has manipulated its currency to gain trade advantage, China has stolen intellectual property, and China has used slave labor to manufacture products at ridiculously cheap prices. We have looked the other way, ignoring human rights abuses. We have also looked the other way in terms of the censorship of speech in China. Google has helped develop a search engine that will meet the requirements of the Chinese censors. We have complied with things that are against our principles for the sake of money. The trade deal being negotiated is not going to change that, but at least it will be a beginning attempt to level the playing field.

Fox Business is reporting today that the U.S. and China agreed to a “phase one deal” in the trade war.

The article reports:

The deal, which has been agreed to in principle and will take three to five weeks to write, includes China agreeing to raise its agricultural purchases to between $40 billion and $50 billion from $8 billion to $16 billion, in addition to making reforms on intellectual property and financial services. The U.S. will not be raising tariffs from 25 percent to 30 percent on Oct. 15. A decision has not yet been made on the tariff increase scheduled for Dec. 15.

A comprehensive trade deal will have two or three phases, according to Trump. China’s trade team is calling the agreement a “pause” in the trade war, and not a deal.

China is not a free country, and the Chinese negotiators who are working out this trade deal will pay a high price if the deal is not totally acceptable to the leadership in China. The fact that a phase one deal has been reached is good news, but China does not have a great track record on keeping promises or abiding by trade agreements.

Truth In Comedy

There is a bit of a dust up going on right now between China and the National Basketball Association. It seems that Daryl Morey, general manager of the Houston Rockets, posted a tweet showing support for Hong King’s freedom movement. Obviously, the Chinese are not a big fan of free speech. Mr. Morey has deleted his tweets and apologized, but that does not seem to be enough for the Chinese.

In an article posted today, CNBC reports:

  • Searches for “Houston Rockets” and “Rockets” in Chinese on Alibaba-owned Taobao and Tmall and another site JD.com, yielded no results.
  • It comes after Rockets general manager Daryl Morey tweeted support for the anti-government protestors in Hong Kong. The tweet was quickly deleted.
  • Chinese broadcast partners Tencent and state-owned CCTV said they would no longer show Rockets games.

We need to remember that China is NOT a free country.

Meanwhile, enter Trey Parker and Matt Stone of “South Park” fame.

Scott Johnson at Power Line Blog posted an article today about their response to the dust up.

The article quotes an article in The Guardian:

South Park’s creators have responded with a mock apology to reports that China has censored the programme, ridiculing the country and comparing President Xi Jinping to Winnie the Pooh.

The “apology” from Trey Parker and Matt Stone comes after reports on Monday that China had scrubbed all episodes, clips and content related to the long-running comedy cartoon from Chinese streaming and social media platforms in response to a recent episode that was critical of the country.

The episode, called Band in China, took aim at what it portrayed as a tendency in US culture to adjust content to accommodate Chinese censorship laws. “It’s not worth living in a world where China controls my country’s art,” says one character in the episode.

The episode also includes a plot line in which a character is caught selling drugs in China and as punishment is sent to a work camp, similar to the mass internment camps in Xinjiang where an estimated one million people, including Uighurs and other Muslim minorities are detained.

The article also includes the non-apology apology from Trey Parker and Matt Stone:

I think that is called ‘speaking truth to power.’

Is This A Winning Issue?

Andrew Yang is running for President in the Democrat primary. He is currently polling at about 3 percent. He has some interesting ideas on changing the American culture.

Hot Air posted an article today about some of those ideas.

The article reports:

MSNBC held their latest “climate crisis” event for 2020 Democratic hopefuls yesterday and when Andrew Yang took the stage he brought up one possibility that all the candidates should weigh in on. When asked by the host what the world would look like in 2050 after the everyone began dealing with climate change and carbon emissions, he suggested that the end of private car ownership was probably on the horizon.

…Democratic presidential candidate Andrew Yang said the United States may have to eliminate private car ownership to combat climate change during MSNBC’s climate forum at Georgetown University Thursday morning.

He told MSNBC host Ali Velshi that “we might not own our own cars” by 2050 to wean the United States economy off of fossil fuels, describing private car ownership as “really inefficient and bad for the environment.” Privately owned cars would be replaced by a “constant roving fleet of electric cars.”

Somehow I don’t see this happening.

The article concludes:

There are two sides to this proposal, consisting of the practical and the political. Being as we are in the midst of a presidential race, the political may be more important in the short term. The fact is that the Democrats seem to keep coming up with ideas that may look good on paper at liberal cocktail parties but are not at all popular with the voters at large. Eliminating private car ownership is just such a proposal.

People love their cars. Nearly everyone realizes that they are expensive luxuries and account for too much pollution, but we still live in a car culture. It’s a status symbol and a totem of our freedom of movement. No matter how well-intentioned you may be, if you come along and say the government needs to take away all your cars, the public is going to be up on their hind legs. This is the way you lose elections.

On the practical side, I will grudgingly admit that Yang is probably at least partially correct about this. If he was saying there would be nothing but mass transit, that would be nuts. Mass transit simply isn’t practical for most of the country unless you live in a densely populated urban area. But he’s also picturing fleets of electric, driverless vehicles that anyone can summon when they need to go somewhere. Uber and Lyft are working on just such a plan right now and sooner or later it may become our new reality.

But having said that, electric vehicles still need to be powered. Until you answer the question of where you’re going to come up with all of the electricity needed to replace the power currently being generated by gasoline, you’re not going to be doing much for the climate. As I mentioned yesterday when talking about efforts in California to eliminate natural gas usage, the state derives roughly half of their electricity from natural gas plants. If all of the cars are suddenly running on electricity, they’re going to be burning a massively larger amount of natural gas to meet the demand.

Yet again, we’re seeing the Church of Climate Change forcing Democrats to toss out expensive, impractical ideas that most people will rebel against. And they can’t seem to help themselves.

There is a lot more to the relationship between Americans and their cars than transportation. Somehow I can’t see taking away our private cars as a winning idea. We also need to consider that American carbon emissions are only a part of the world’s carbon emissions. We are a small percentage of carbon pollution. Unless the countries that are not concerned about the environment cut their emissions, nothing we do will have much of an impact. Keep in mind that China and India, the world;s biggest polluters, we essentially exempt from the climate treaty for a number of years. Maybe the treaty wasn’t really about climate.

Update On Hong Kong

Politico posted an article today about the latest events in Hong Kong. The article is taken from the South China Morning Post. Please consider the source when reading the excerpts.

The article reports:

Embattled Hong Kong leader Carrie Lam Cheng Yuet-ngor has formally withdrawn the much-despised extradition bill that sparked the nearly three-month long protest crisis now roiling the city, confirming the Post’s exclusive report earlier on Wednesday.

She will also set up an investigative platform to look into the fundamental causes of the social unrest and suggest solutions for the way forward, stopping short of turning it into a full-fledged commission of inquiry, as demanded by protesters.

The decision to withdraw the bill will mean that the government is finally acceding to at least one of the five demands of the protesters, who have taken to the streets over the past 13 weeks to voice not just their opposition to the legislation, but the overall governance of the city in demonstrations that have become increasingly violent.

Apart from the formal withdrawal of the legislation, the protesters have asked for the government to set up a commission of inquiry to investigate police conduct in tackling the protests, grant amnesty to those who have been arrested, stop characterizing the protests as riots, and restart the city’s stalled political reform process.

Whether they will view the investigative committee as adequate in meeting the call for a commission remains to be seen. On the bill withdrawal, a government source said that Lam will emphasize that the move was a technical procedure to streamline the legislative agenda, with the Legislative Council set to reopen in October after its summer break.

Paul Mirengoff posted an article at Power Line Blog today about Hong Kong. In the article he quotes a Claudia Rosette article at The Wall Street Journal:

[T]he millions of protesters. . .have been doing the world a heroic service. Like their predecessors at Tiananmen, they are exposing on a world stage the brutality of the Beijing regime. From the only place under China’s flag where there is any chance to speak out, they are shouting the truth, day and night, in the streets and from the windows—while they still can.

During more than 13 straight weeks of protest, Hong Kong’s people have demanded the rights and freedoms—including free elections—that China, in a treaty with Britain, guaranteed to Hong Kong for 50 years after the 1997 handover. At a press conference last week held by Hong Kong’s Civil Human Rights Front, which has organized some of the biggest peaceful protests, spokeswoman Bonnie Leung observed that if the authorities would simply keep those promises, “the whole movement will end immediately.”

Instead, President Xi Jinping and his puppet, Hong Kong Chief Executive Carrie Lam, have defaulted to threats, propaganda and force. Ms. Lam’s administration has deployed riot police, tear gas, rubber bullets and water cannons. Officers have made more than 1,000 arrests.

China has been pressuring Hong Kong companies, including Cathay Pacific Airways, to fire employees who join the protests. Chanting “Stand with Hong Kong! Fight for freedom!” the protesters have refused to back down. Some told me they are ready to die for their cause. Many of their predecessors did in Tiananmen.

Hong Kong police have begun firing warning shots with live ammunition. This weekend, police were caught on video beating unarmed civilians bloody on the subway. China has been conspicuously drilling troops of its People’s Armed Police across the border, and last week it sent fresh army troops to its garrison in Hong Kong, labeling this a routine rotation to ensure “prosperity and stability.”

(Emphasis added)

The article at Power Line Blog concludes with an UPDATE:

Carrie Lam, Hong Kong’s chief executive, has finally agreed to withdraw the extradition bill discussed above. She takes her order from Beijing, so it looks like China wants to avoid a Tiananmen Square style massacre and the worldwide condemnation it would bring.

Will this concession, absent the freedoms China promised Hong Kong in 1997, be sufficient to take the steam out of the protests? Perhaps.

Another possibility is that the protesters, if anything, will be emboldened by the concession and that China, having made it, will believe it can defend a crack down by claiming that the protesters couldn’t take “yes” for an answer.

 Stay tuned.

 

It’s Better To Owe Money To A Friend Than To Owe Money To Someone Who Is Not Your Friend

America’s runaway spending is a problem. So far no one in Washington has either the power or the will to bring that spending to a screeching halt. But at least we are being a little wiser in our borrowing habits.

CNS News posted an article today with the following headline, “Japan Surpasses China as Top Foreign Holder of U.S. Debt.” It would be better if we had no debt, but at least the majority of our debt is held by a country that is not out to destroy us.

The article reports:

In May of this year, the Chinese owned $1,110,200,000,000 in U.S Treasury securities and the Japanese owned $1,101,000,000,000. In June, however, Chinese ownership of U.S. Treasury securities rose only to $1,112,500,000,000 and Japanese ownership climbed to $1,122,900,000,000.

That marked the first time since May 2017 that entities in Japan have owned more U.S. Treasury securities, as estimated by the U.S. Treasury, than entities in China.

In May 2017, the Japanese owned $1,111,500,000,000 in U.S. Treasury securities and the Chinese owned $1,102,200,000,000. In June 2017, Chinese ownership of U.S. Treasury securities increased to $1,146,500,000,000 and Japanese ownership declined to $1,090,300,000.000.

Chinese ownership of U.S. Treasury securities, according to the estimates, peaked in November 2013 at $1,316,700,000,000.

…The Federal Reserve owns more U.S. Treasury securities than either Japan or China. As of June 27, according to the Federal Reserve’s balance statement, the Federal Reserve owned $2,110,256,000,000 in Treasury securities.

U.S. Treasury securities held by entities in Hong Kong are counted separately from those in Mainland China. According to the Treasury’s estimate, entities in Hong Kong owned $215,600,000,000 in U.S. Treasury securities in June.

Entities in the United Kingdom were the third largest foreign holders of U.S. Treasury securities after Japan and China. In June, entities in the U.K. owned $341,100,000,000 in U.S. Treasury securities.

The article concludes:

In explaining its methodology for estimating foreign holdings of U.S. Treasury securities, the Treasury explained that some countries have higher numbers because owners of Treasury securities from third countries “entrust the safekeeping of their securities” to institutions in these countries.

“Imperfections caused by ‘custodial bias’remain in the current MFH [Major Foreign Holders of U.S. Treasury Securities] table,” said the methodology statement. “Some foreign owners entrust the safekeeping of their securities to institutions that are neither in the United States nor in the owner’s country of residence. For example, a German investor may buy a U.S. security and place it in the custody of a Swiss bank. In both the SLT and the periodic surveys of holdings of long-term securities, such a holding will typically be recorded vis-a-vis Switzerland rather than Germany. This ‘custodial bias’ contributes to the large recorded holdings in major custodial centers including Belgium, the Caribbean banking centers, Luxembourg, Switzerland, and the United Kingdom.”

It truly is time to cut our spending. We owe too many people too much money.

Playing Chess With World Trade

America has been on the wrong end of bad trade deals for a long time. We watched our manufacturing jobs leave America after NAFTA. We watched the steel industry disappear after being undercut by Chinese steel held up by subsidies by the Chinese government. President Trump is a businessman. As a businessman, he is trying to level the trade playing field. In some areas he is getting cooperation at home and abroad; in some areas he is not. China has been a difficult country to deal with regarding trade. The uneven playing field they have enjoyed for years has been very profitable for them. Because their economy is based on an uneven playing field, they are reluctant to make changes. Their economy is currently struggling, and if President Trump stands his ground, the Chinese economy could face serious challenges. That’s where we are. There is, however, some positive news about where we might be headed.

Ed Morrissey at Hot Air posted an article today about a possible breakthrough in the talks with China.

The article reports:

Did China finally blink in Donald Trump’s trade war? Trump himself seems to think so. At the G-7 summit, Trump told reporters that a statement earlier in the day from a top official in Beijing showed that China had finally expressed a real interest in redefining the trade relationship between the world’s top two economies. It’s “the first time” that Trump sees China acting in good faith, he said

The article continues:

After rapid-fire escalations in tariffs by both sides, China’s vice premiere called for “calm.” Liu He also declared Beijing’s willingness to conclude a trade agreement and called for talks to begin immediately:

“We are willing to resolve the issue through consultations and cooperation in a calm attitude and resolutely oppose the escalation of the trade war,” Liu, who is President Xi Jinping’s top economic adviser, said, according to a government transcript.

“We believe that the escalation of the trade war is not beneficial for China, the United States, nor to the interests of the people of the world,” he added.

U.S. companies are especially welcome in China, and will be treated well, Liu said.

“We welcome enterprises from all over the world, including the United States, to invest and operate in China,” he added.

“We will continue to create a good investment environment, protect intellectual property rights, promote the development of smart intelligent industries with our market open, resolutely oppose technological blockades and protectionism, and strive to protect the completeness of the supply chain.”

The last time we thought we had a deal, the person who made the deal was executed when he returned home. Hopefully this time will turn out better for everyone.

Trying To Level The Playing Field Has Its Challenges

Fox Business posted an article today about the devaluing of the Chinese yuan. The devaluing of the Chinese currency (currency manipulation) has been used by China for decades to grow their economy at the expense of America. It has been used to lure manufacturing away from America, impact our trade balance, and generally work against the American economy. We have needed to combat this practice for decades, but no President had the courage.

The article reports:

The onshore Chinese yuan weakened to worse than seven per U.S. dollar, hitting its lowest level since 2008, as Beijing looks to cushion the blow from Trump’s tariffs. A weaker yuan makes Chinese goods cheaper for overseas buyers, which may be necessary as China just lost its spot as the US’s biggest trading partner.

Trade data released Friday by the Department of Commerce showed U.S. imports from China fell by 12% in the first six months of the year, allowing Mexico to supplant it as the U.S.’s biggest trade partner.

“China dropped the price of their currency to an almost a historic low,” Trump tweeted Opens a New Window. on Monday. “It’s called “currency manipulation.” Are you listening Federal Reserve? This is a major violation which will greatly weaken China over time!”

Last week, Trump said beginning Sept. 1 the U.S. would place a 10% tariff on the remaining $300 billion of Chinese goods. He went ahead with the announcement despite objections from his advisers.

The president warned he could “always do much more” with respect to tariffs, adding the 10 percent tax could go “well beyond 25 percent” if necessary. Earlier this year, the administration placed a 25% tariff on $250 billion worth of Chinese goods.

Weakening the yuan isn’t the only form of retaliation Beijing took on Monday. It also ordered state-owned enterprises to stop purchases of U.S. agricultural products, according to a Bloomberg report, citing people familiar with the situation.

That is a reversal from just last week, when Beijing said it had purchased several tons of U.S. soybeans Opens a New Window. as a gesture of a goodwill amid trade negotitations. Before the trade war began, China was the largest buyer of U.S. soybeans, accounting for 70% of all purchases, but their imports have fallen by 97% since the trade war began.

The article notes:

Over the weekened, The Trump administration pushed back against the idea the trade war was hitting the wallets of U.S. consumers.

“China has strategically gamed the tariffs by slashing their prices and by devaluing their currency,” White House trade advisor Peter Navarro told “Fox News Sunday.”

This trade dust-up with China may get ugly, but it is something that has to be done.

Elected Officials Are Supposed To Represent The People Who Voted For Them

The Democrats have always been able to count of the labor unions to support their candidates. However, in recent years, Democrat policies have worked against people who belong to labor unions. Illegal immigration depresses the wages of American workers. Bad trade agreements send jobs overseas. Both of these problems are things that President Trump is trying to fix, but the Democrats in the House of Representatives are generally a road block to dealing with either problem.

Breitbart posted an article on Friday about some recent comments by AFL-CIO President Richard Trumka.

The article reports:

AFL-CIO President Richard Trumka blasted Democrats during a private meeting this week for their globalist free trade agenda where 2020 Democrat presidential primary candidates have continued to embrace the North American Free Trade Agreement (NAFTA) and the Trans-Pacific Partnership (TPP).

During a private meeting with Democrat National Committee (DNC) members, including Chairman Tom Perez who pushed TPP while working for President Obama, Trumka blamed a coalition of elected Republicans and Democrats for the country’s entering into a multitude of free trade agreements that have gutted America’s working and middle class while outsourcing those jobs to China, the Phillippines, Vietnam, and India.

“It’s time to do better,’ Trumka said, scolding Democrat Party leaders, according to the Huffington Post. “I believe you can. I believe you will. And working people are hungry for it. But you can’t offer campaign rhetoric or count on workers’ votes simply because you have a ‘D’ next to your name.”

The article continues:

“You need to prove that this party is the one and only party for working people,” Trumka said, according to the Huffington Post. “And recognize that unions and collective bargaining are the single best way to make this economy work for everyone.”

Trump has sought to protect and create American working and middle-class jobs by imposing tariffs on China and other foreign imports. Likewise, during his first year in office, he ended the Obama effort to enter TPP — which would have eliminated millions more U.S. jobs by allowing multinational corporations to outsource them directly to Vietnam and Malaysia.

Meanwhile, Biden has continued to defend NAFTA, which he claimed in 1993 would add American jobs to the American economy but actually helped eliminate nearly five million U.S. manufacturing jobs and resulted in the closure of nearly 50,000 U.S. manufacturing facilities. A number of American towns and small cities were left economically destroyed and have yet to recover.

I would call this a shot across the bow. Unions provide major money to Democrat political campaigns, even when their members don’t vote for Democrats. If the Democrat party continues in its current direction, the labor union leaders may be less enthusiastic about promoting and funding Democrat candidates.

The Coming Election Impacts Foreign Policy

Yesterday The Washington Free Beacon posted an article about China’s plans to influence the 2020 presidential election.

The article reports:

In his conversation with Levin, Gertz (Washington Free Beacon senior writer Bill Gertz) reflected on his interview with Guo, who told Gertz earlier this week that the Chinese government has been deploying a prolonged campaign to defeat President Donald Trump in 2020. Gertz asserted the Chinese government may try to wait out Trump’s time in office so it can negotiate trade deals with a new Democratic president if Trump loses in 2020.

Trump announced Thursday he would impose an additional 10-percent tariff on certain Chinese exports as a trade agreement between the United States and China has yet to materialize.

“The China threat to me is the most serious threat facing the country,” Gertz told Levin.

He pointed to the economic integration between the U.S and China and how those relationships make it difficult for lawmakers and military officials to address Chinese aggression head-on, which he referred to as “an existential threat.”

The article concludes:

“There’s a major push right now to try and build up of American courses in Asia so we won’t have to go to war with China,” Gertz said of the government’s efforts to deter a war hypothetical war with China.

Looking towards the presidential race, Gertz warned the Chinese government would prefer to have a Democrat in the White House.

“It’s going to be a huge problem if the Democrats retake the administration,” Gertz said, pointing to former Vice President Joe Biden’s recent downplaying of threat China poses to the United States.

Gertz pointed out that during the Obama presidency the Chinese government expanded their presence in Asian waterways, in addition to ramping up their theft of intellectual property from American companies and entrepreneurs.

This may be the reason the negotiations with China have become so difficult–China is waiting for a President who will cave into their demands. It is obvious that President Trump is not that person.

By undermining President Trump since he was elected, the Democrat party has made international trade negotiations much more difficult. Creating an even playing field in trade with China would result in continued growth of the United States economy. It is time to repair the damage bad trade deals have done in the past.

Economic Policies Matter

As the Democrat presidential candidates continue their debates, all of us need to step back and consider the consequences of economic (and other) policies. For instance, Medicare for all sounds like a really good idea–until you consider that the one place the government has been running healthcare for a while is the Veteran’s Administration. That hasn’t worked too well. Guaranteed income for all also sounds like a great idea–until you begin to calculate how much it will cost. Income inequality is a problem–it is most prevalent in our largest cities that have been under Democrat control for decades. So what has been the result of President Trump’s economic policies?

The Conservative Treehouse posted an article about the current state of the economy.

The article reports:

The Bureau of Economic Analysis (BEA) released significant wage and salary data yesterday which held stunning upward revisions for 2018 and 2019.   Wage growth of 5.5% combined with low inflation remaining at 1.4 percent; the disposable income of U.S. workers jumped to a stunning 4.1%.

Within the revised BEA data, we find employee compensation rose 4.5% in 2017 and 5% in 2018.  Importantly the growth trend continued into 2019, with compensation increasing 3.4 percent in the first six months alone.  Year-over-year wages and salaries were revised upward to 5.3% for May, and 5.5% in June.  These are stunning increases in worker pay.

There are various economic indicators we have shared through the years, but wage growth is one of the more critical.  First, wage growth lags behind business activity – workers don’t get pay raises until after business volume demands/provides it.  Second, wage growth is generally uni-directional – once businesses hike pay, the increases cement.

The wage growth is across the board–it has not impacted only the wealthy.

The article concludes with a summary of President Trump’s overall economic strategy:

The U.S. consumer is driving the economy.  The jobs and labor market remains strong.  Wage growth is rising in proportion to the diminished availability of the labor pool. Price inflation is low because manufacturing economies (EU and China) are devaluing their currency, and subsidizing their industries (China), in an effort to avoid Trump’s trade policies (tariffs).  Their efforts increase the value of the dollar and we are importing deflation.

Simultaneously, global manufacturers -multinationals- need access to the U.S. consumer market.   As President Trump applies a series of strategic global trade moves, intended to draw manufacturing back to the U.S., those multinationals are in somewhat of a holding pattern for further investment.  Simply, the multinationals are trying to figure out where to put their investment capital for the highest return.

Example: The U.S. economy is strong, unemployment is low and wage rates up; so if China is a non-option, the profit determination shifts.  Where to manufacture? It might be more profitable for a multinational in either Southeast Asia or North America. The key is which country has a long-term agreement with the U.S.  That’s why the USMCA is critical.

CTH still predicts POTUS Trump will eliminate the uncertainty as soon as the USMCA is ratified.  I suspect President Trump will drop massive tariffs on all Chinese goods.

Think of China like a big lake filled with U.S. economic value. Through his Asian discussions with Vietnam, S Korea, Malaysia, Singapore, Australia, Japan, et al, President Trump has stealthily built a thin levy, an ASEAN dam of sorts, that will direct the China lake of economic value into Southeast Asia.

Once the USMCA is signed, Trump will blow the dam by triggering the tariffs.  This will move all of the multinationals who are in a ‘holding pattern’, and capital investment will flow fast.   The China exodus will benefit North America (USMCA) and those ASEAN nations who have partnered with Trump and made proactive trade agreements.

This is the reason it is good to periodically get politicians out of the White House and elect a successful businessman.

Unfortunately This Is Going To Require A Response

Fox News is reporting today that two tankers flying British flags have been seized by Iran in the Strait of Hormuz.

The article reports:

Fox News has learned that a second Liberian tanker operated by a British company was also seized by the Iranian Revolutionary Guard and was seen on maritime tracking services making a turn, headed towards Iran.

President Trump said Friday that Iran is “nothing but trouble” and that “we heard one, we heard two,” tankers were seized.

Iran seized a British-flagged oil tanker in the Strait of Hormuz earlier Friday amid growing tensions in the region.

The Stena Impero, which has a crew of 23 onboard, “was approached by unidentified small crafts and a helicopter during transit of the Strait of Hormuz while the vessel was in international waters,” Stena Bulk, the shipping company that owns the vessel, said in a statement. “We are presently unable to contact the vessel which is now heading north towards Iran.”

Iran’s Revolutionary Guard forces, in a statement on their website, say the ship was seized for “non-compliance with international maritime laws and regulations” and is being brought to an unnamed Iranian port, according to the Associated Press.

Websites tracking the ship’s path show it turning sharply in the direction of Iran’s Qeshm Island, instead of its intended destination of Saudi Arabia.

“We are urgently seeking further information and assessing the situation following reports of an incident in the Gulf,” a U.K. government spokesperson told Fox News.

In July 2018 Reuters posted the following:

With a third of the world’s sea-borne oil passing through it every day, the Strait of Hormuz is a strategic artery linking Middle East crude producers to key markets in Asia Pacific, Europe, North America and beyond.

That dynamic has changed slightly due to the fact that America now exports more crude oil than they import. The countries that will be hurt by problems in the Strait of Hormuz will be Europe, India, and China. I am sure that America will be willing to help Europe, Russia will also increase her oil production. The price of oil will rise sharply, but it is doubtful that the Strait will remain closed.

The latest report that I have heard is that there are actually three tankers that have been seized. This is an international problem and should be handled by the international community in unison.

The Appropriate Response And The Slanting Of The Story

Yesterday John Hinderaker posted an article at Power Line Blog about the warfare of the future. In the article Mr. Hinderaker mentions that according to The New York Times, Russia and China are working on the technology of hypersonic weapons. These weapons would render our missile defense systems useless.

The article also mentions President Trump’s response to the Iranian attacks on oil tankers:

Cyber warfare is almost old hat by comparison. The Associated Press (AP) says that President Trump ordered cyber attacks on Iran in place of actual bombings:

U.S. military cyber forces launched a strike against Iranian military computer systems on Thursday as President Donald Trump backed away from plans for a more conventional military strike in response to Iran’s downing of a U.S. surveillance drone, U.S. officials said Saturday.

The article then illustrates how the Associated Press can spin a story by quoting the AP’s reporting on the President’s response:

“This is not a remote war (anymore),” said Sergio Caltagirone, vice president of threat intelligence at Dragos Inc. “This is one where Iranians could quote unquote bring the war home to the United States.”

Caltagirone said as nations increase their abilities to engage offensively in cyberspace, the ability of the United States to pick a fight internationally and have that fight stay out of the United States physically is increasingly reduced.

Note that the AP accuses the United States of picking a fight internationally.

The article concludes:

Did the U.S. pick a fight here? I thought Iran did that, by bombing tankers in international waters and shooting down an American drone. But for the AP, like many other American liberals, anything other than Obama-style supine acquiescence constitutes picking a fight.

Well said, sir.

It’s Amazing What You Can Lose When You Are Motivated

The Gateway Pundit posted an article today with the following headline, “How Convenient! — Christopher Wray’s Corrupt FBI ‘Loses’ Notes from Meeting Where Corrupt Cop Peter Strzok was Told CHINA was Hacking Hillary’s Emails.” My, isn’t that a surprise.

The article reports:

Corrupt Deep State FBI has misplaced emails that would prove that Peter Strzok was lying to Congress last year about knowing about Hillary Clinton’s emails being hacked by China.  Imagine that!

Last year representative Louie Gohmert from Texas interviewed corrupt cop Peter Strzok before Congress  about whether he remembered anyone mentioning that China was hacking Hillary Clinton’s emails.  Strzok lied and said he didn’t remember which led Gohmert to call out his lying, especially about his affair with Lisa Page. 

…The point that Gohmert was trying to make was that the FBI knew that China was hacking Hillary’s emails but ignored it. Instead the FBI selectively addressed whether Russia was hacking Hillary’s emails and used this story to make up the fake Trump – Russia collusion narrative.

The article concludes:

So the FBI has lost the notes from 2015 that show that dirty cop Peter Strzok, who oversaw Hillary’s email investigation, was notified that China was spying on Hillary.  Corrupt cop Christopher Wray’s FBI does not want the American public to see these notes and therefore his FBI is now saying that the notes are conveniently lost.

The fact that the FBI would ignore China spying on Hillary’s emails was material to the Spygate story.  The FBI didn’t want to look into spying on Americans, they wanted to exonerate Hillary Clinton and go on to frame candidate and President Trump on bogus Russia collusion lies.

Will the Deep State ever be cleaned up and brought to justice?

Some of us are beginning to wonder if justice still exists in America.

Wrong Again

Remember when the talking heads on television told us that because of the tariffs President Trump had placed on China, the cost of imports would go up. Well, they misread the tea leaves again.

The Gateway Pundit posted the following from the Bureau of Labor Statistics:

Prices for U.S. imports declined 0.3 percent in May, the U.S. Bureau of Labor Statistics reported today, following an increase of 0.1 percent the previous month. Lower fuel and nonfuel prices contributed to the May decline in import prices. U.S. export prices fell 0.2 percent in May, after advancing 0.1 percent in April, 0.8 percent in March, and 0.6 percent in February.

Imports

U.S. Import prices fell 0.3 percent in May, the first monthly decline since a 1.4-percent drop in December. Import prices advanced 1.8 percent from December to April before the downturn in May. The price index for overall imports decreased 1.5 percent over the past 12 months, matching the drop in January. These were the largest over-the-year declines since the index fell 2.2 percent in August 2016.

Fuel Imports: Import fuel prices declined 1.0 percent in May, after rising 25.4 percent over the previous 4 months. Lower prices for both petroleum and natural gas contributed to the May decline. Petroleum prices fell 0.9 percent in May, after a 4.7-percent advance in April. The May decrease was the first monthly decline since a 15.3-percent drop in December. Natural gas prices fell 6.8 percent in May following a 51.1-percent decline the previous month. Overall fuel prices decreased 1.1 percent over the past year. The decline was driven by a 1.9-percent drop in petroleum prices which more than offset a 2.5-percent rise in natural gas prices.

The Gateway Pundit article concludes:

The lower costs on fuel allowed the overall import costs to go down for the month.  This is in the face of tariffs the Trump Administration put on China as a result of inaction from the Chinese in coming together on a trade agreement with the US.

Despite what all the liberal naysayers said about increasing tariffs costing Americans millions, the costs of imports are actually down.

Overall the US economy is in very solid shape –

The experts seem to be having a very difficult time getting things right under the Trump administration.

An Obvious Conflict Of Interest

Senator Mitch McConnell does not like tariffs. He does not like them on China where they are levied in an attempt to level the playing field on trade, and he does not like them on Mexico where they are being levied in an attempt to stop the flow of illegals and drugs over our southern border.

Unfortunately, the meme below is not a joke:

An article posted at Breitbart today explains the problem. Senator McConnell is married to Transportation Secretary Elaine Chao.

In the article, Peter Schweizer explains why that is important:

Schweizer highlighted Transportation Secretary Elaine Chao, who is married to McConnell, as illustrative of what he described as widespread political conflicts of interest between sitting American officials and foreign governments.

“The Chao family are deeply embedded commercially and financially with the Chinese government,” explained McConnell. “The Chinese government essentially set them up in the shipping business. Their ships — these are large cargo ships that transport a large amount of goods around the Pacific.”

Schweizer added, “The Chinese government is financing the building of these ships for the Chao family business. They provide crews for these chips, and they provide contracts to ship steel and other products around the Pacific.”

The Foremost Group is a shipping business founded by James Chao, Elaine Chao’s father. The Chao family business primarily revolves around China, necessitating “deep ties to the economic and political elite in China,” according to a Sunday-published New York Times report.

“[The Chao family’s shipping business] started out in the early 1990s with just a couple of vessels, a couple of large cargo ships,” said Schweizer. “They now have, by some estimates, 35 or 36, many of those built by the Chinese government. The estimates are that hundreds of millions of dollars in financing is done by the Chinese to build these ships, and that they give them preferential treatment.”

Schweizer explained, “Business in China is done with a political purpose. The China State Shipbuilding Corporation is controlled by the government, by the Communist Party, and they do business deals with people in the West with the expectation that they will get things in return.”

That is called a conflict of interest. So what is Senator McConnell’s problem with the Mexican tariffs? Many Republicans have aligned themselves with the U.S. Chamber of Commerce which supports our porous southern border as a source of cheap labor. There has never been a border wall because Republican business men who contribute to political campaigns want cheap labor and Democrats want future voters.