Trump Reportedly Slams Administration's Globalists, Demands "Bring Me China Tariffs"

It appears Goldman and the Globalist gang in The White House may have less power and influence than assumed in the absence of Steve Bannon. In what could be one of the most comprehensive (and easily traced) leaks from within Trump"s administration, Axios reports details of a small Oval Office meeting with Trump raging at senior staff as they push back against his hawkish trade war position.

Seemingly frustrated at his senior staff"s efforts to wage economic war against China, Trump lashed out at his new Chief of Staff General Kelly:

 "John, you haven"t been in a trade discussion before, so I want to share with you my views. For the last six months, this same group of geniuses comes in here all the time and I tell them...

"Tariffs. I want tariffs." And what do they do? They bring me IP. I can"t put a tariff on IP."

Axios, who confirm this account by sources with knowledge of the meeting and undisputed by the White House, explain in great detail, that Gary Cohn, a globalist who opposes tariffs and the protectionist trade measures pushed by the nationalist Bannonites, had his shoulders slumped and was clearly appalled by the situation.

 Trump added...

"China is laughing at us,... Laughing."

"John, I want you to know, this is my view. I want tariffs. And I want someone to bring me some tariffs."

With seeming intimate knowledge of the transcript and actions within the meeting, Axios then describes how senior trade advisor Peter Navarro tried to rescue the situation, only to be rebuked by the president..."I don"t even know what I"m looking at here."

However, it is Axios" quoted conclusion of the meeting that raises the most eyebrows about just where the power and influence really remains in The White house...

"John, let me tell you why they didn"t bring me any tariffs," he said.

"I know there are some people in the room right now that are upset. I know there are some globalists in the room right now. And they don"t want them, John, they don"t want the tariffs. But I"m telling you, I want tariffs."

Finally, here"s the non-denial that the White House gave to Axios:

"The president has been very clear about his agenda as it relates to trade. Discussions pertaining to specific tariffs and trade deals are ongoing and have already resulted in many positive developments."

It seems President Trump is more prone to ignore the Goldman-sponsored Globalist status quo seekers, and is still following Bannon"s strategy to maintain hegemony...

“We’re at economic war with China,” he added. “It’s in all their literature. They’re not shy about saying what they’re doing. One of us is going to be a hegemon in 25 or 30 years and it’s gonna be them if we go down this path.”

Bannon said he might consider a deal in which China got North Korea to freeze its nuclear buildup with verifiable inspections and the United States removed its troops from the peninsula, but such a deal seemed remote. Given that China is not likely to do much more on North Korea, and that the logic of mutually assured destruction was its own source of restraint, Bannon saw no reason not to proceed with tough trade sanctions against China.

“To me,” Bannon said, “the economic war with China is everything. And we have to be maniacally focused on that. If we continue to lose it, we"re five years away, I think, ten years at the most, of hitting an inflection point from which we"ll never be able to recover.”

As we noted earlier, China has already implied its response to any "economic war" actions would likely lead to "unloading dollar assets."

Steve Bannon In "Self-Imposed Exile" After Disputes With Trump's Inner Circle

Back in February when Time Magazine ran a cover dubbing Steve Bannon "The Great Manipulator," we wondered whether there was any truth to the assertion or if it was just a clever attempt to sow discord in the White House.  Here"s what we said previously in a post entitled "Is Steve Bannon "The Great Manipulator" Or Is It All Just More "Fake News"".

Various mainstream media outlets would like for you to believe there is discord in the White House between President Trump and Steve Bannon.  The typical narrative goes something like this:  Steve Bannon is "The Great Manipulator" (as Time Magazine described him) pulling all the strings from behind the scenes and Trump, the perpetual narcissist, is growing weary of competing for the spotlight.

The question is whether any of it is true or if this is just more "fake news" from a mainstream media intent upon doing anything possible to sow the White House discord they so desperately seek?

Of course, if the media were actively looking to leverage a "character flaw" of a President they see as intent upon always capturing the spotlight, putting staff members on the cover of prominent national magazine covers would be a great way to execute that plan.

Of course, if sowing discord was the intent then it just may have worked.  As Politico points out today, following alleged disputes between Steve Bannon, Jared Kushner and others within Trump"s inner circle, Bannon has apparently resorted to living his daily life in "self-imposed exile" in the White House.

Steve Bannon has largely disappeared from the White House’s most sensitive policy debates — a dramatic about-face for an operative once characterized as the most powerful man in Washington.

Bannon, chastened by internal rivalries and by President Donald Trump’s growing suspicion that he is looking out for his own interests, is in a self-imposed exile, having chosen to step back from Trump’s inner circle for the sake of self-preservation, according to several White House advisers who spoke to POLITICO on the condition of anonymity to avoid angering a colleague.

He was absent from Trump’s recent trips to Europe for the G-20 summit and from his visit with French president Emmanuel Macron. Bannon’s non-attendance is all the more noteworthy given his interest in European history and politics, particularly his antipathy to the European Union.

As Politico notes, whereas Bannon was, not long ago, a near-constant presence in the Oval Office — often seen standing over Trump’s shoulder or sitting in on calls with world leaders — he now spends hours camped out at the conference table in the office of White House Chief of Staff Reince Priebus, reading the news or working on his phone.

Meanwhile, it"s apparently not just the Oval Office where Bannon"s presence has been limited as he"s pretty much removed himself from all policy discussions as well.

For Bannon, reduced visibility has brought reduced influence. On trade, his protectionist views are well known; though he initially joined a series of White House meetings begun in the spring to resolve disagreements between advisers with disparate views on the subject, from free traders like economic adviser Gary Cohn to protectionists like National Trade Council director Peter Navarro, he has not shown up at one in six weeks.

Nor did Bannon attend a major policy meeting on Tuesday on trade policy towards China, even though he is known to favor tough economic measures towards Beijing. He did, however, have time for a meeting with former Trump campaign aides David Bossie and Corey Lewandowski that focused on political issues, including how to woo back Republican senators who had abandoned Trump on health care.

Bannon has not been entirely absent from the West Wing’s heftiest policy discussions. On Monday, he attended a meeting of the NSC’s Principals Committee, which includes top officials from throughout the government, according to a senior White House aide. Though the president removed Bannon from the NSC in April, the aide estimated that Bannon has been at approximately 20 percent of the Principals Committee meetings since then. Bannon has reportedly dueled with McMaster over troop levels in Afghanistan and Iraq and Syria, in each case warning against deeper U.S. involvement.

“He follows everything closely. He knows what’s going on. I don’t know if he has a feeling that strategically it’s better if his hands aren’t directly on things, but he’s definitely in the fold on the legislative agenda,” said Sam Nunberg, a former Trump political adviser.

Of course, following controversies surrounding everyone from Bannon to Kellyanne Conway and Sean Spicer, there have been never-ending media reports of late suggesting that a shakeup of the White House staff is inevitable at some point in the not so distant future...a shakeup which Politico thinks could come next month...

But he now plays a surprisingly minor role in key administration policy debates. White House aides speculate about whether Bannon is trying to protect his job amidst long-running talk of a White House staff purge. Several West Wing advisers said they expect Trump to decide once and for all on a White House shakeup during his planned vacation next month, when he is expected to consult with friends beyond the Beltway. “If there is a big staff shakeup, it will be in August,” said a senior White House aide. “My guess is that Bannon probably sees that and doesn’t want to be in the press.”

...mission accomplished?

Peso Plunges As White House Plans NAFTA Withdrawal Executive Order

The Mexican Peso is tumbling (and Loonie extending yesterday"s timber-tariff-driven losses), as Politico reports, the Trump administration is considering an executive order on withdrawing the U.S. from NAFTA, according to two White House officials.

Politico reports that a draft order has been submitted for the final stages of review and could be unveiled late this week or early next week, the officials said. The effort, which still could change in the coming days as more officials weigh in, would indicate the administration’s intent to withdraw from the sweeping pact by triggering the timeline set forth in the deal.

The approach appears designed to extract better terms with Canada and Mexico, and judging bvy the FX market"s reaction, they agree...

Trump in recent weeks has stepped up his rhetoric vowing to terminate the agreement all together.

“NAFTA’s been very, very bad for our country,” he said in a speech last week in Kenosha, Wis.

“It’s been very, very bad for our companies and for our workers, and we’re going to make some very big changes or we are going to get rid of NAFTA once and for all.”

Peter Navarro, the head of Trump’s National Trade Council, drafted the executive order in close cooperation with chief White House strategist Steve Bannon. The executive order was submitted this week to the staff secretary for the final stages of review, according to one of the White House officials.

All this rhetoric, however, is sending the dollar surging - something Trump expressed just a few days ago was not great...

Are America And China Destined For War?

Authored by Harry Kazianis via The Stratgeic Culture Foundation,

In his recent book The Improbable War, professor Christopher Coker explains that it is “of vital importance that the possibility of a conflict between China and the United States continues to be discussed.” Coker’s rationale for this is simple: “If the United States and China continue to convince themselves that war is too ‘improbable’ to take seriously, it is not they but the rest of the world that may ultimately pay the price.”

It would seem the good professor’s wish is about to be granted. We are about to be treated to what surely will be a media blitz over what can only be described as the most comprehensive book to ever tackle the question of not only whether a US-China war is possible, but what steps Washington and Beijing can take to avoid such a calamity.

Written by one of the world’s most prominent political scientists and strategic thinkers of the day, director of Harvard University’s Belfer Center, Graham Allison, anyone who has been following China in recent years likely guessed such an effort was in the works. The book is hooked on Allison’s popular “Thucydides Trap” concept. The trap, as Allison described in a prominent piece for the Atlantic in 2015, is “the attendant dangers when a rising power rivals a ruling power — as Athens challenged Sparta in ancient Greece, or as Germany did Britain a century ago.” Allison goes on to warn that in 12 of 16 cases he has studied throughout history, when such a situation takes place, war has been the result.

US and China: A relationship in dangerous flux

So what happens in case study number 17? Knowing the odds history has given us, is war between China and America unstoppable?

To answer such questions, we first need to understand the complexity that is the US-China relationship. In fact, there are two US-China relationships.

The first, is the economic relationship. At least until the election of Donald Trump, many scholars and Asia hands would argue that both sides prospered from their deep economic ties. US-China bilateral trade in goods and services has skyrocketed since the two nation’s opened their doors to each other in 1971 and is now more than US$600 billion per year. Trade between both Washington and Beijing has made both countries wealthier with millions of jobs created on both sides of the Pacific.

The second part is the strategic relationship — something that was bound to become strained after the collapse of the Soviet Union, the real threat that brought America and China together. Without a common foe, tensions on both sides have begun to grow. Washington and Beijing now face off in various parts of the Asia-Pacific with no letup in sight.

Such an odd, dual-sided relationship, filled with equal promise and peril, made sense for decades. When times got tough — look no further than the 1995-1996 Taiwan Crisis, the 1999 Chinese Embassy bombing, the 2001 EP-3 Crisis and many other smaller incidents — the dangers of severing the economic relationship always seemed to smooth out any talk of a rupture. But with Trump and advisers such as Death by China author Peter Navarro calling into question the economic benefits of trade with Beijing, the one thing that always seemed to anchor relations in times of trouble seems to be at an end.

Why Destined for War is a must read:

To be fair, there are many great articles, long-form pieces and books that detail the dangers of a US-China military clash and how to avoid it. So why read this one?

I offer three reasons: Comprehensiveness, readability and telling hard truths most Asia experts here in Washington won’t want to hear.

In the interests of full disclosure, I have published Allison’s works on many occasions as Executive Editor of the National Interest, but Allison’s efforts in Destined for War will surely be praised, and for good reasons.

Any Asia hand will quickly be floored by the level of detail and research the manuscript includes. With a grounding in history, Allison takes his readers on a journey through many similar cases in the past where a rising nation challenged a status-quo power, detailing where things went wrong, and, in some instances, how war was avoided. This is all done in a style that makes the book a real page turner, written in a prose that is easy to understand, never getting bogged down in often pointless jargon, tables, graphs or pie-charts. Allison’s ideas flow easily, no matter how frightening they are.

But some will likely have a problem with some of what the work offers. For example, he compares Xi Jinping and Donald Trump as two men who have similar goals: to make their nations great again. At the same time, Allison boldly, and quite correctly, couches China’s quest for primacy in Asia as something like what the United States did when it rose to power almost a century ago. While clearly stating that China has not acted as aggressively as America did in the past, especially back around the turn of century during the time of President Theodore Roosevelt, Allison skillfully hints at what could occur if China were to take such a step — and embark on a real path to war.

Reasons for hope:

While I don’t want to offer any spoilers, Allison offers four key ways to mitigate the possibility of conflict. One of my favorites, clarifying vital interests, is worth spoiling. What are America’s vital interests in the Asia-Pacific region? What are we willing to fight for? What are we willing to die for? And, perhaps, most importantly, what are we not willing to fight for? To this day, I would challenge any past Obama administration official to be able to explain that with clarity — they likely can’t, beyond mentioning the word pivot or rebalance — terms that are rightly relegated to the past. The Trump administration will need to take up this challenge fast, considering Xi and Obama have a big summit set for early next month.

While many will sing the praises of Allison’s work, there is a much simpler reason why the good professor’s effort should be commended: it stands to reason a flood of op-eds, blogs, editorials and podcasts will flood the media as this books nears its release. We are finally about to have a real public debate about the very distinct possibility of a war between the US and China — and that itself might be the real accomplishment.

Mexico's Presidential Frontrunner Blasts Trump's "Neofascism"; Says "Can't Wait To Redo NAFTA"

Last month we wrote about "Mexico"s Fiery, Trump-Like Populist Who Looks Increasingly Likely To Win The Presidency In 2018."  As we noted before, Pena Nieto’s PRI party, which has held power for most of Mexico’s modern history, has seen its popularity eroded in recent months due to a series of corruption scandals, surging gasoline prices and a perception among Mexican voters that Pena Nieto himself has been too soft in combatting an aggressive Trump Presidency.

But, the growing populist sentiment that is sweeping Mexico and forcing Pena Nieto"s ratings to all-time lows, is the same sentiment that has vaulted Andres Manuel Lopez Obrador to the top of the list of likely presidential candidates to be elected in 2018.  Staying true to his reputation, Lopez Obrador spent the better part of today blasting the Trump administration in a series of interviews. 

In fact, speaking at the Washington Press Club earlier, Lopez Obrador said that the poor distribution of income and bad tax policies, not immigrants, were the cause of America"s economic distress.  Per The Hill:

"President Trump"s approach of blaming migrants for the problems of the United States has been excessive. We will not allow that, you can"t implement a campaign of hate against Mexicans because that is neofascism," he said.

Lopez Obrador was in town to present a complaint against Trump"s executive orders on immigration at the Interamerican Commission on Human Rights (IACHR).

"We are denouncing that Secretary [of Homeland Security John] Kelly"s executive measures affect not only Mexicans, but migrants from all over the world," said Netzaí Sandoval, the lawyer who wrote the claim.

Meanwhile, Lopez Obrador vowed to take a more "firm" approach in re-negotiating the NAFTA free trade agreement with the Trump administration saying that while Nafta “didn’t hurt” Mexico"s economy “it is also not our salvation."  That said, he went on to warn that any cooperation between the U.S. and Mexico would be short lived if the Trump administration didn"t change it"s rhetoric on migrants.

Lopez Obrador said that once in power, he would change the nature of the bilateral relationship "without disrespecting anyone, but with firmness."

He said it is "very probable" that he will win the upcoming election, scheduled for July 2018.

"We will convince the government of the United States and Trump that the best thing is a good deal, an understanding based on cooperation for development," he said.

But Lopez Obrador warned the overlap between his administration and Trump"s would be short-lived if the Trump administration did not change its tune on migrants.

As we pointed out earlier this morning, Peter Navarro, Trump"s top trade advisor, seemingly took a slightly less combative stance on NAFTA and was quoted by Bloomberg as saying he wants the US, Canada and Mexico to form a trade "powerhouse", supposedly one which is quite different from the existing "NAFTA" trade arrangement. 

The Trump administration is re-examining a critical component of the free trade pact: the rules of origin, which dictate what percentage of a product must be manufactured in the U.S. for it to carry a Made in America label, Navarro said.

“We have a tremendous opportunity, with Mexico in particular, to use higher rules of origin to develop a mutually beneficial regional powerhouse where workers and manufacturers on both sides of the border will benefit enormously,” said Navarro. “It’s just as much in their interests as it is in our interests to increase the rules of origin.”

For example, under the current agreement, 62.5 percent of the total value of cars sold in North America must originate in the U.S., Canada or Mexico to avoid import tariffs. The U.S. wants to raise that threshold, making it harder for parts from other countries to enter the supply chain.

Since the comment appeared less combative than some more aggressive trade-related statements out of the administration, the market took them in stride and sent both the Canadian Loonie and the Mexican Peso to session highs.

Finally, here"s is Bloomberg"s interview with the so-called "Trump of Mexico".

Gary Cohn: "The Fed Is Doing A Good Job"; Trump "Respects The Powers Of The Fed"

Former Goldman president, and current White House chief economic advisor - as well as the person who supposedly is engaged in a bitter fued with Peter Navarro over the shape of future US trade policy - Gary Cohn appeared on Fox News Sunday, and spoke at length to Chris Wallace about some of the key economic policy changes to be implemented.

First, he touched on Obamacare repeal, saying that the administration will do "whatever it takes" to get the bill passed, setting a high bar for expectations from Trump who is still expected to meet significant challenges from House and Senate republicans.

Cohn then touched on Trump"s vision to protect the country, saying the Obama administration under-invested in the military the past eight years. "Unfortunately, we have no alternative but to reinvest in our military and make ourselves a military power once again," Cohn said. Cohn said Trump met over the last several weeks with generals from the Army, Navy, Air Force and Marines to talk about the military"s preparedness. He said it has been disappointing to hear what these generals have had to say. Cohn conceded that if funds are used to reinvest in the military, cuts need to be made elsewhere in order ensure a balanced budget without creating a further deficit.

"It"s no different than every other family in America that has to make the tough decision," Cohn said. "When they need to spend money somewhere, they have to cut it from somewhere else. These are tough decisions, but the president has shown he is ready, willing and able to make these tough decisions."

Finally, touching on a topic that until recently at least appeared to be dear to Trump"s, Cohn - speaking in his best former Goldman COO voice - said that the Federal Reserve "has been doing a good job" and the Trump administration respects its independence, even if the U.S. central bank raises interest rates this week.

He said that Trump administration will keep working to reduce barriers to job creation no matter what the Fed does on interest rates.

"The Federal Reserve is an independent agency and they operate as such. They have their economic data, which they look at and they are trying to always modulate economic growth with inflation, with the work force," Cohn said. "I think the Federal Reserve has been doing a good job in doing that. The Fed will do what they need to do. And we respect the powers of the Fed."

It remains to be seen if he will also respect them after 2-3 rate hikes, when the market finally wakes up to the rate hike cycle and Yellen"s realization she needs to hike in order to cut once the official recession begins, in the process slamming the stock market which both Trump and Cohn have previously confirmed is a "barometer" of the administration"s policies. For now Trump has been happy to take credit for the all time highs in the S&P, but what will he say once stocks start sliding, the dollar surges crushing exports, and Trump finally realizes that he needs looser, not tighter, policies to implement his economic vision? We don"t know, but a twitter Feud between @RealDonaldTrump and the @FederalReserve was certainly among our most vocal desires of things to see in 2017. It may soon come true.

Watch the latest video at video.foxnews.com

Is A US-German Trade War Imminent?

In the aftermath of the stunning statement by Trump"s top trade advisor, Peter Navarro, who indirectly warned that a currency, and therefore, trade war with Europe may be imminent after he told the FT what everyone else knows but is unwilling to admit, namely that Germany is using a “grossly undervalued” euro to which was like an “implicit Deutsche Mark” whose low valuation gave Germany "an advantage over its main partners", analysts are asking if this is the precursor to a third front in Trump"s currency wars, which most recently included China and Mexico.

While one look at the rising European currency reserves driven by the soaring current account surplus, mostly out of Germany, suggests that Navarro"s allegation that Germany is a currency manipulator does have some validity. But isolating the problem is only the first step: a full blown trade war with Europe, or Germany, would have profound consequences not just for the two counterparts, but the rest of the world.

Here are some further thoughts on this red hot topic, courtesy of SMI.

Is a U.S.-German Trade War Looming?

U.S. President Donald Trump"s policies have begun to take shape, and Germany"s strategy for reacting to them has already been made clear. Germany has long considered a strong alliance with the United States to be a cornerstone of its foreign policy, and it will do everything it can to protect that partnership. However, Germany will also take steps to protect its massive current account surplus — now the largest in the world — from becoming the next target of punitive trade measures.

Over the past five years, Germany"s current account surplus (a figure that includes the country"s trade balance) has almost doubled, reaching 256.1 billion euros ($274 billion) in 2015. Trump has accused Germany of not doing enough to increase its imports while having such a sizable trade surplus, and in October, the U.S. Treasury Department listed Germany as a country to watch because of its current account surplus. Germany"s own eurozone peers have accused it of encouraging saving over consumption, slowing the currency area"s recovery in the process.

Nevertheless, the United States can take a trade war with Germany only so far. Under U.S. law, Washington can introduce temporary safeguards to protect domestic industries threatened by certain imports. But these safeguards can target only imports, rather than specific countries, and Germany would immediately challenge them in the World Trade Organization. Should the Trump administration try to single out Germany, it would have to successfully argue that Berlin is supporting German exporters unfairly and then slapping countervailing duties on German exports.

If the United States were able to effectively target German exports, Berlin would take its appeal to the American people. In theory, it could argue that higher tariffs on German products would only increase costs for U.S. consumers. Also, Berlin will remind American workers that many German companies, including BMW, Volkswagen and Siemens, have U.S. divisions that employ many Americans and use products from U.S. companies in their supply chains.

At the heart of the debate is Berlin"s concern that other parts of the developed world will start to echo Trump"s nationalist rhetoric, posing an existential threat to an export-based economy like Germany"s. Several European political parties have already begun to praise the president"s statements, promising that the next U.S. government will prove that "protectionism works." Germany is terrified by the prospect that these same nationalist forces will gain control of governments in the bloc in upcoming 2017 elections. Additionally, Germany worries that Trump"s attack against the cheap euro could become (or at least be perceived as) an attack against the entire eurozone. Other eurozone members may grow anxious that their participation in the bloc will put them in a protectionist White House"s crosshairs.