Tag Archives: President Trump

China’s Oil Trade Retaliation is Iran’s Gain, by Tom Luongo

Starting a trade war is like dropping a bomb, you never know what’s going to blow up. From Tom Luongo at tomluongo.me:

I’ve told you that once you start down the Trade War path forever will it dominate your destiny.

Well here we are.  Trump slaps big tariffs on aluminum and steel in a bid to leverage Gary Cohn’s ICE Wall plan to control the metals and oils futures markets.   I’m not sure how much of this stuff I believe but it is clear that the futures price for most strategically important commodities are divorced from the real world.

Alistair Crooke also noted the importance of Trump’s ‘energy dominance’ policy recently, which I suggest strongly you read.

But today’s edition of “As the Trade War Churns” is about China and their willingness to shift their energy purchases away from U.S. producers.  Irina Slav at Oilprice.com has the good bits.

The latest escalation in the tariff exchange, however, is a little bit different than all the others so far. It’s different because it came after Beijing said it intends to slap tariffs on U.S. oil, gas, and coal imports.

China’s was a retaliatory move to impose tariffs on US$50 billion worth of U.S. goods, which followed Trump’s earlier announcement that another US$50 billion in goods would be subjected to a 25-percent tariff starting July 6.

It’s unclear as to what form this will take but there’s also this report from the New York Times which talks about the China/U.S. energy trade.

Things could get worse if the United States and China ratchet up their actions [counter-tariffs]. Mr. Trump has already promised more tariffs in response to China’s retaliation. China, in turn, is likely to back away from an agreement to buy $70 billion worth of American agricultural and energy products — a deal that was conditional on the United States lifting its threat of tariffs.

“China’s proportionate and targeted tariffs on U.S. imports are meant to send a strong signal that it will not capitulate to U.S. demands,” said Eswar Prasad, a professor of international trade at Cornell University. “It will be challenging for both sides to find a way to de-escalate these tensions.”

But as Ms. Slav points out, China has enjoyed taking advantage of the glut of U.S. oil as shale drillers flood the market with cheap oil.  The West Texas Intermediate/Brent Spread has widened out to more than $10 at times.

WTIC-Brent-Spread

By slapping counter tariffs on U.S. oil, that would more than overcome the current WTIC/Brent spread and send Chinese refiners looking for new markets.

Hey, do you know whose oil is sold at a discount to Brent on a regular basis?

Iran’s.  That’s whose.

To continue reading: China’s Oil Trade Retaliation is Iran’s Gain

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The Racoons Have to Go, by Les P.

This is a pretty darn good explanation of Trump’s support. From Les P. at theburningplatform.com:

Like many citizens, I’ve wondered and tried hard to understand why Trump has such a remarkable following. (It’s obvious why he probably should not!) Then a friend sent me this raccoon story. It makes no difference about your political leanings, this is just a good explanation of WHY… (or it’s as good as any I can come up with).

If you really want to know how the majority of people feel? And this applies to both democrats and republicans, read below, it says it all.

You’ve been on vacation for two weeks, you come home, and your basement is infested with raccoons. Hundreds of rabid, messy, mean raccoons have overtaken your basement. You want them gone immediately. You call the city, 4 different exterminators, but nobody can handle the job. But there is this one guy and he guarantees you to get rid of them, so you hire him. You don’t care if the guy smells, you don’t care if the guy swears, you don’t care if he’s an alcoholic, you don’t care how many times he’s been married, you don’t care if he voted for Obama, you don’t care if he has a plumber’s crack, you simply want those raccoons gone! You want your problem fixed! He’s the guy. He’s the best. Period!

Here’s why we want Trump, yes he’s a bit of an ass, yes he’s an egomaniac, but we don’t care. The country is a mess because politicians suck, the Republicans and Democrats can be two-faced & gutless, and illegals are everywhere. We want it all fixed! We don’t care that Trump is crude, we don’t care that he insults people, we don’t care that he once was friendly with Hillary, we don’t care that he has changed positions, we don’t care that he’s been married 3 times, we don’t care that he fights with Megyn Kelly and Rosie O’Donnell, we don’t care that he doesn’t know the name of some Muslim terrorist.

This country is weak, bankrupt, our enemies are making fun of us, we are being invaded by illegals, we are becoming a nation of victims where every Tom, Ricardo, and Hasid is a special group with special rights to a point where we don’t even recognize the country we were born and raised in; “AND WE JUST WANT IT FIXED” and Trump is the only guy who seems to understand what the people want.

To continue reading: The Racoons Have to Go

Shanghai Plunges 3.2%, below 3,000 for 1st Time in 2 Years, After Trump Threatens to Massively Escalate Trade War and China Threatens to Massively Retaliate, by Wolf Richter

Trump’s threat to levy 10% tariffs on another $200 billion of China’s exports to the US is causing financial turmoil. From Wolf Richter at wolfstreet.com:

Apparently, the trade talks have collapsed.

On May 20, Treasury Secretary Mnuchin declared that the US-China trade war was “on hold” while the trade talks were being conducted. That didn’t last long. Apparently, those talks have collapsed. And Monday evening, President Trump threatened to hit another $200 billion of imports from China with 10% tariffs.

The Shanghai Composite Index plunged 3.2% by midday in China on Tuesday, to 2,924, the lowest level since June 2016. The index is down 12% since the end of February. Hong Kong’s Hang Seng fell 2.4% by midday. Tokyo’s Nikkei fell 1.5%. US futures edged down.

It would be the second wave of tariffs, following the already decided first wave of 25% tariffs on $50 billion in goods, with $34 billion of imports to be hit on July 6, and $16 billion to be hit at a later date.

But instead of buckling under Trump’s first wave and addressing the IP-theft issues brought forth by the US, China vowed to retaliate in equal measure, which caused the infuriated White House to massively escalate the trade war with the second wave of threats.

“This latest action by China clearly indicates its determination to keep the United States at a permanent and unfair disadvantage, which is reflected in our massive $376 billion trade imbalance in goods. This is unacceptable,” Trump said.

“Further action must be taken to encourage China to change its unfair practices, open its market to United States goods, and accept a more balanced trade relationship with the United States.”

“After the legal process is complete, these tariffs will go into effect if China refuses to change its practices, and also if it insists on going forward with the new tariffs that it has recently announced,” Trump said.

And Trump threatened a third wave of tariffs – 10% on another $200 billion of Chinese goods – if China retaliates against the second wave. But that threat also fell on deaf ears.

To continue reading: Shanghai Plunges 3.2%, below 3,000 for 1st Time in 2 Years, After Trump Threatens to Massively Escalate Trade War and China Threatens to Massively Retaliate

Trump Wants To Free America From “Fool Trade” And Flip The Tables On The EU, by Andrew Korybko

Trump is suggesting that Europe pay more for its own defense, and have the same terms of trade with the US that the US has with Europe. From Andrew Korybko at orientalreview.org:

Trump promised to replace what he termed as “fool trade” with fair trade when it comes to America’s economic partnerships, especially those with NAFTA and the EU.

Tweeting from Singapore after the failed G7 Summit in Canada, the President wrote that “Fair Trade is now to be called Fool Trade if it is not Reciprocal”, before explaining how Canada and Germany “rip off” the US through their own protectionist tariffs and insufficient contributions to NATO, respectively. Trump’s sour that their leaders attacked him for his “Make America Great Again” steel and aluminum tariffs while hypocritically ignoring their own lopsided economic relations with the US, and he believes that now is the time to make right for what he truly believes are the historic wrongs that his predecessors committed in voluntarily handicapping American power. Proverbially speaking, the President conceptualizes America as Gulliver the “giant” tied down by a bunch of Lilliputian dwarves, albeit having previously put itself in this submissive position out of some sort of ideological masochistic-sadism that Trump wants to free it from.

The Cold War-era quid pro quo of the US providing costly security assistance to its NATO allies in order to enable them to concentrate more fully on building their utopian welfare states is no longer relevant because of the changing nature of geopolitics and the rise of asymmetrical threats, though Clinton, Bush, and Obama perpetuated this state of affairs because it advanced the Liberal-Globalist model that all three of them were pursuing at the expense of average Americans. Having entered into office because of the desperation that millions of regular folks in Middle America are experiencing as a result of the domestically catastrophic consequences of globalization on the American Heartland and especially the Midwest, Trump feels obligated to do something about this massive self-inflicted economic wound that’s bleeding hundreds of billions of dollars from the country each year for voluntary reasons that are impossible for this businessman to fathom.

Trump hits back at G7

To continue reading: Trump Wants To Free America From “Fool Trade” And Flip The Tables On The EU

China Warns US Corporations: You Are About To Become Victims Of A Trade War, by Tyler Durden

China certainly has ways of retaliating against US trade sanctions. From Tyler Durden at zerohedge.com:

Now that China has released details on its planned retaliation to President Trump’s Section 301 tariffs – a list that contains, predictably, agricultural goods like soybeans, orange juice and beef as well as energy products like crude oil (though surprisingly not yet aircraft, though sanctions could be imposed in the next round) – we get to watch as US corporations who will be negatively impacted by the tariffs ratchet up their lobbying of the Trump administration (that is, if they haven’t already given up) practically beginning the president not to let tensions escalate much further.

Of course, the Chinese aren’t stupid. They know that one way to pressure Trump into backing off would be aggressively lobby US businesses with threats – both veiled and obvious – that their businesses could come to harm, or perhaps ruin, if the conflict escalates. Already, the Wall Street Journal has published a story about China’s efforts to browbeat American businesses, recounting a meeting between a group of executives and Chinese Vice President Wang Qishan that reportedly took place in late March.

When a group of American executives and other global corporate chieftains met with Chinese Vice President Wang Qishan in late March, they received a stern message about the simmering U.S.-China trade conflict: If tensions escalate, buckle up.

“The message was pretty clear,” said a person who attended. “A lot of companies would become victims in a U.S.-China trade war.”

And some companies say they’re already experiencing problems with the customs process as US goods pile up at Chinese ports.

Already, some U.S. companies are facing increased regulatory scrutiny in China, according to Jacob Parker, vice president of China operations at the U.S.-China Business Council. For instance, he said, it takes longer for their products to clear Chinese customs; in other instances, Chinese regulators are putting advertisement slogans by U.S. firms under review. Some automobiles and farm products such as pork from the U.S. have piled up at ports.

“Maintaining a low profile in the China market and ensuring that you’re completely compliant are more important now than in the past,” Mr. Parker said.

To continue reading: China Warns US Corporations: You Are About To Become Victims Of A Trade War

It’s Time for America to Cut Loose Our Useless So-Called ‘Allies’, by James George Jatras

What do our allies do for the US? From James George Jatras at strategic-culture.org:

US President Donald J. Trump spent the last week or so churning out initiatives that seemed deliberately calculated to set his critics’ hair on fire:

  • He met as an equal with North Korea’s Kim Jong-un – who is a very bad man!
  • He stated again his willingness to meet with Russian President Vladimir Putin – an even worse man!
  • He mocked and threatened our trading partners – and slapped tariffs on them!
  • He suggested that an impenitent Russia (a very bad country!) should be let back into the genteel company of the Group of Seven!
  • He topped everything off by suggesting that Russian-speaking Crimea should be part of – Russia!

As summed up by vulgar Republican, Never-Trump apparatchik Rick Wilson:

‘After the last week, Trump is clearly a man who puts the dick in dictator. He’s a fanboy of Putin, Kim, Duterte, and a dog’s breakfast of the worst examples of oppression, thuggery, and anti-Western values the globe has to offer. [ . . . ]

‘[T]his week, Trump’s love of authoritarians, dictatorships and his actions and words came together.  Donald Trump first went to the G-7 to wreck the proceedings with a combination of insult-comic schtick, diplomatic demolition derby, Putin cheerleading, and giant-toddler petulance.

‘He followed that with the Singapore Shitshow. It was a monstrous reality TV event, as was intended. But it left our putative allies wondering at the new Axis of Assholes Trump has joined—the CRANK: China, Russia, America and North Korea. By the end, it didn’t feel like he was after denuclearization but management tips from the portly little thug Kim.

‘For the American president to normalize, excuse, and ally himself with the worst of the world’s bad actors while insulting, degrading, and destroying our allies and alliances would be appalling in any circumstance. The fact that Trump acts like a bumbling, eager fraternity pledge, desperate to join Phi Sigma Dictator makes it all the worse.’

For the moment, let’s put aside Trump’s alleged sympathy for authoritarianism and focus on the accusation that Trump is “insulting, degrading, and destroying our allies and alliances,” a view held across the Establishment spectrum, from neoconservatives like Max Boot to far-Left Democratic California Congresswoman Maxine Waters (famed for her concern about Russian aggression in nonexistent Limpopo). How dare Trump threaten such valuable relationships!

Except these so-called ‘allies and alliances’ aren’t valuable to the United States. They’re a positive danger and a detriment.

To continue reading: It’s Time for America to Cut Loose Our Useless So-Called ‘Allies’

Trump Confounds the Pundits, by Philip M. Giraldi

As Philip M. Giraldi sees it, Trump’s progression on diplomacy is two steps forward, one back. The agreement he eventually gets from North Korea may look a lot like the agreement he repudiated with Iran. From Giraldi at strategic-culture.org:

What will come out of this week’s summit between Donald Trump and Kim Jong-un of North Korea remains to be seen, and one must hope for the best, but the bullets are already beginning to fly in the US media with The New York Times’ Nicholas Kristof declaring impulsively somewhat implausibly that Trump gave away the store by canceling military training exercises with South Korea and in legitimizing Jong-un’s rule by meeting with him without getting anything substantive in return.

Lost in the flood of news coming out of Singapore are Trump’s positive comments delivered at the earlier G-7 meeting in Canada, which may have opened the door to a possible meeting with Russian President Vladimir Putin and a return of Moscow to a reconfigured G-8. One hopes that China will soon also make it into the ultimate insiders’ club, which will have to be renamed G-9.

Washington’s most important relationship is with Moscow, and the possibility of détente should be welcomed by everyone who wishes to avoid a nuclear holocaust. But The Times’ Paul Krugman, among others, cannot overcome his visceral dislike for Russia, citing its “invasion” of Ukraine and its relatively small economy as good reasons to block its membership in a reconstituted G-8. He also suggests that Putin has some kind of “hold over Trump,” a serious charge that he cannot substantiate except by innuendo, also claiming that Trump is some kind of Quisling “who defended Russia while attacking our closest allies.” It is odd that Krugman, a Nobel laureate in Economic Sciences, chooses to ignore the fact that Moscow punches well above its weight both economically and politically while also sitting on what is presumed to be the world’s most resource-rich region in Siberia. Also, Krugman should do a fact check on who started what in Ukraine. He might be surprised to learn that it was the United States and its proxies.

The Krugman and Kristof excursions into fantasy demonstrate clearly how media punditry in the United States is a fascinating plant that grows in darkness. It is rarely fact-based, is never held accountable, and it is nearly always ideologically driven. Talking heads sitting across the right/libertarian divide are as bad as traditional liberals like Krugman and Kristof. Justin Raimondo, for example, praises Donald Trump’s performance in insulting and rebuffing the six other nations at the recently concluded G-7 Summit because those conniving non-Americans are relying on the United States to provide their defense so they can sit around all fat and happy. He calls them “Euro-weenies.”

To continue reading: Trump Confounds the Pundits