Wednesday 3rd of June 2020

saint donald is trying to slay the dragon with sanctions, tariffs and nuclear hubris...


When US Commander-in-Chief Donald Trump ordered his corporate battalions to cease dealing with China, it was far more theatre than the theatre of war.

Such an edict did have an immediate impact, but perhaps not the way the President intended.

His frontline troops on Wall Street ran for the bomb shelter, jettisoning around $US670 billion ($1 trillion) from the S&P500 on the way out the door.

That's not to say Mr Trump doesn't have options if his orders are not obeyed.

He has one very big option — trade's nuclear option — at his fingertips.

National emergency declaration

The International Emergency Economic Power Act (IEEPA) is effectively a declaration of a "state of national emergency" — a drastic action far in excess of the tit-for-tat tariff skirmishes currently being fought.

It is the Trump Administration's most extreme trade weapon and could effectively block China's access to all US markets if deployed.

That means not just blocking goods and services, it would target Chinese investments and likely slam the door on China's access to US financial markets and banks.

The IEEPA was drawn up in 1977 to modernise the Trading with the Enemy Act, which dated back to World War I, and focus it on external threats to the US.

It was last invoked by President George W Bush after the 9/11 attacks to block the assets of terrorist organisations.

Earlier this year, President Trump announced he'd wheel out the IEEPA powers to hit Mexico with tariffs to head off the perceived national security threat posed by illegal immigrants continuing to head north across the border.

Now China is in the IEEPA crosshairs as Mr Trump tweeted to doubters of his powers.

Extraordinary powers

Earlier this month, Mr Trump made it clear he was thinking of something big when asked about China's threat of retaliation to the new batch of 10 per cent tariffs which are set to be imposed from September.

"If they did [retaliate], we have the ultimate form of retaliation," Mr Trump said. "I think that they'd have very few jobs left in China, because we'd be able to step it up."

Invoking the IEEPA doesn't require the consent of Congress.


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Is this why, the interest rates on US bonds have been going into negative terrritory? The Chinese hold a vast reserve of US bonds which could become useless, unless they ask Trump to pay up... But bonds unlike shares ARE ON FIXED TERMS timeframe. So the Chinese might have to pack up their tent in the USA but would be able to ask to be paid in GOLD for the real estates and businesses in the USA. This would have the result of sinking the US dollar, making the USA more competitive on the international markets... The idea at the end, might be to let the US play with themselves and let the rest of the world ham up some agreements while deciding NOT TO TRADE WITH THE USA anymore... This would be the "nuclear" trade option for Europe, China, Russia... It may come to this if trump pushes his wish list too far...

thank you donald...

The new pipeline infrastructure, currently expected to be completed in late 2019 or early 2020, will provide Gazprom with the capacity to deliver an additional 55 billion cubic metres of Russian natural gas to Western Europe via the Baltic Sea.

US President Donald Trump’s alienation of Denmark may have just thrown a major wrench into his administration’s own painstaking efforts to stop the Nord Stream 2 pipeline project, Die Welt contributor Daniel Wetzel writes.

According to Wetzel, Trump’s recent vilification of Danish Prime Minister Mette Frederiksen, along with his decision to cancel his upcoming state visit to Copenhagen, over the Kingdom’s refusal to consider selling Greenland to the United States, could come at a major cost.

Up to now, the journalist noted, Copenhagen stood alone in Western Europe in its effort to block the construction of the Russian pipeline to Germany via Denmark’s exclusive economic zone, “at the request of, or at least in the interests of, the United States.”

But Trump, Wetzel wrote, reacted to Denmark’s rejection of his Greenland bid “like a defiant child.”

“This could have all been dismissed as an entertaining diplomatic farce, if so much wasn’t on the line,” the journalist argued, given that Denmark’s effort to delay the approval of Nord Stream 2’s construction may prove important both to Kiev’s negotiations with Gazprom on ensuring that some Russian gas continues to be delivered to Europe through Ukraine’s pipelines, and to the US’s own efforts to ship its more expensive liquefied natural gas to the EU.

Up until this point, Wetzel noted, the Americans had barely any leverage to slow down the Nord Stream 2 project, while Denmark, on the other hand, has had more success in its delaying tactics. Now, Trump has threatened to throw it all away with his Greenland gambit.

“If Denmark were inclined to favour a foreign policy as infantile as Trump’s, the country would quickly return the favour and wave through Russia’s Nord Stream 2 building permit applications. Why should the Danes continue to hold their own for an ally like the US?” Wetzel asked.

Copenhagen has its own reasons to oppose Nord Stream 2 and probably won’t change its policy, but it won’t be thanks to Trump, but despite him, the journalist concluded.


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crocodile tears...

President Trump appeared to express regret Sunday about the United States' escalating trade war with China, the Washington Post reports. But he told gathered reporters, "it has to happen."

Why it matters: This is the first time he has indicated any regret that his trade war with China had spiraled into an international crisis, as WashPost notes.


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Read from top.

commerce, not politics...

Trade-related tensions between the United States and China started early in 2018 over what US President Trump considered an unfair economic balance and noncompetitive trade practices. Currently, the US has imposed tariffs on $550 billion worth of Chinese goods and Beijing has returned the favor on $185 billion of US products.

Long Yongtu, a former deputy minister of Chinese foreign trade and a negotiator in China’s 15-year talks to enter the World Trade Organisation (WTO), said, during a Credit Suisse China Investment Conference, that China would gladly welcome the re-election of Trump in the US 2020 presidential elections, according to the South China Morning Post(SCMP).

“Trump talks about material interests, not politics. Such an opponent is the best choice for negotiations,” said Yongtu, who currently heads the Beijing-based Centre for China and Globalisation, in an interview with SCMP.

The former Beijing official stated that Trump is “easy to read”, unlike his predecessors. Yongtu reportedly said that Trump does not seek fights with China over hot geopolitical issues like Hong Kong or Taiwan, which are central to Beijing.

“He makes the US decision-making process efficient and transparent, because he basically says what it is… We don’t need to spend so much time figuring out what Americans want any more, or search for each other’s real thoughts in the dark, like we used to,” Long said,a according to the report.

Commenting on the ongoing trade war between the world’s two largest economies, the former trade envoy said that it is “part of Trump’s global protectionist strategy”. Long noted that it is Trump’s White House that withdrew the US from key international treaties such as the Trans-Pacific Partnership (TPP) while imposing tariffs on trade partners from the European Union, as well as Canada and Mexico.


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