For three years now all I’ve heard is “Trust the plan.” “Trump has a plan.” Maybe he does and maybe, just maybe, he doesn’t.
Trump’s latest folly to place a 5% per month tariff on Mexico if it doesn’t control the border with the U.S. is just another idiotic move in his quest to control global trade.
It’s not like Mexican President Andres Manuel Lopez Obrador is Trump’s enemy on the border. In fact, if anything, AMLO has been on Trump’s side. But, like Trump, he’s got just as big a Deep State problem and that precludes anything substantive getting done.
This latest outburst by Trump ensures that his USMCA, the “Greatest Deal Ever,” won’t get ratified. And it just goes to show that he’s so weak as a President that he can’t win any wins within his own government so now he’s going to punish Mexico while pandering to his mostly brain-dead base.
He’s looking at his rising approval numbers and surveying the carnage in global trade and thinking he has the political capital for this. And, sadly, he’s right.
But this tariff is not about the border. It’s far from that. Trump is going to be Mr. Legal Immigration. He’s going to let in as many skilled foreign workers as he can to fill the jobs he’s trying to win back from China, India and Europe.
Notice how Americans aren’t going to fill those jobs. And Trump doesn’t care one whit about that in the end, as long as those rubes in flyover country keep showing up to his rallies, genuflecting to his God-Emperorness and donating to his re-election by the millions.
After all he’s running against the largest, if not sorriest, pack of braying jackals (Tulsi Gabbard notwithstanding, of course) ever assembled by the Democrats, the party of Illegal Immigration.
If these tariffs aren’t about the border than what are they about? They are about China. They are about stopping the re-branding of Chinese imports as being from Mexico and skirting his Holy Tariff of Anitoch which is the key to his escalating trade war with China.
As much as companies can move their factories and operations to other countries because of high tariffs, they can also change their path to entry into the U.S. This is why Trump is looking to declare every other potential destination for goods coming from China tariff-free a currency manipulator and bring them under the purview of increased tariffs.
And it’s not just China that will feel Trump’s wrath. Secretary of State Mike Pompeo is in Germany shaking down the Germans over their refusal to not use Huawei’s equipment in their 5G network rollout.
Pompeo is threatening to cut off intelligence sharing with the Germans over this issue citing the ever-present security concerns over Huawei’s hardware. From Zerohedge:
Pompeo told the news conference further: “(There is) a risk we will have to change our behavior in light of the fact that we can’t permit data on private citizens or data on national security to go across networks that we don’t have confidence (in).”
But the real truth here is not the worry that Huawei is spying on behalf of the Chinese government. It is that Huawei refuses to let the U.S. use its hardware to spy on the rest of the world, including its own citizens.
I remind you of a post I wrote back in January on this issue.
The real issue is that nothing has changed since a 2014 report from The Register that Huawei categorically refuses to install NSA backdoors into their hardware to allow unfettered intelligence access to the data that crosses their networks.
So, I ask the question again, “What the real plan, Mr. Tariff Man?” Because if it’s to make America great again, cutting off all trade you don’t like won’t achieve that in yours or anyone else’s lifetime.
Since that’s been ruled out, as Mike Shedlock noted the other day, no agreement Trump makes is worth the paper it’s printed on. And the fallout will be felt even harder by our own companies.
The plan then must be to make America great by destroying what’s left of its credibility worldwide, gut domestic consumption and production and ensure our businesses will never be able to win another competitive contract ever again.
Good luck with that Mr. President. You can be sure the markets will have their own.
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