Sunday, December 23, 2018
Throwing Canada Under the Bus
I often
stated, 'One way or the other, Mexico is going to pay for the Wall.'This
has never changed. Our new deal with Mexico (and Canada), the USMCA, is so
much better than the old, very costly & anti-USA NAFTA deal, that
just by the money we save, Mexico is paying for the Wall!
Trump
Tweet, 12/13/18
So, Donald, that means you do not
need to get money from Congress for your wall, because Mexico is paying for it,
right? How exactly do you get that in a useable form, cash for the wall, based
on the expected value to… er… the American business community? There doesn’t
seem to be any other request from Trump to Mexico, according to that country’s
new President Andres Manuel Lopez Obrador, for any such “wall cash.” How does our
federal government get that some of that trade-correction money to apply to the
wall? There doesn’t seem to be any mechanism to do that. Does that mean any positive
shift in any trade agreement is effectively funding the wall?
Is Canada also paying for the
US/Mexican border wall, since they are part of the same US-Mexico-Canada
Agreement (USMCA), otherwise known as NAFTA-lite? If we are able to negotiate a
better trade agreement with China, is China also paying for that wall? Oh, I
see, “alternative facts.” We simply “say” Mexico is paying for the wall when,
wink-wink, when we know they are not. When you are preaching to a relatively
unsophisticated “base,” they have no way of running the numbers to verify that
Trump’s statements are simply wrong. They see more dollars coming into country
that they believe is because of the President’s self-proclaimed excellence at
negotiation, that somehow Trump is
getting needed “wall cash.” Shut the federal government down over this?
And exactly how are those 90-day trade
negotiations going with China? The moratorium on tariff increases expires on
March 1, 2019. Trump points to a recent purchase of American soybeans by
Chinese authorities, representing roughly ten percent of past levels, as
evidence of wild success: “China resumed buying U.S. soybeans, bringing some
relief to farmers in America’s heartland as Chinese President Xi Jinping works
toward a trade deal with President Trump.
“The world’s largest consumer of the
crop bought 1.5 million to 2 million metric tons of American soybeans over 24
hours, with shipments expected to occur sometime during the first quarter, the
U.S. Soybean Export Council said, citing unidentified industry sources…This is
the first significant purchase since the two countries began imposing
tit-for-tat tariffs, with China slapping a 25% retaliatory levy on American
soybeans after Trump imposed duties on billions of dollars’ worth of goods from
China…
“But Thursday’s [12/13] news didn’t
impress the market. Soybean futures fell.” Los Angeles Times, December 14th.
Remember, we are talking about massive theft (billions and billions of dollars)
of U.S. intellectual property that has no remedy in sight and hundreds of billions of fundamental trade imbalance.
The above soybean order is still mired in “millions.”
The bottom line remains: if Chinese
President Xi Jinping were to make massive trade concessions to America, he
would be committing political suicide. So Trump will have to exaggerate even
small concessions, which will absolutely occur (like in the automotive sector),
as the greatest deal in history. We have to remember that the last 100-day
trade negotiation moratorium between the U.S. and China produced nothing.
The games being played by the China
and the United States to needle each other over trade concessions are most
interesting. My December 7th blog, Espionage, Iran and a Mystery
Arrest,
tells of a U.S. arrest warrant for the Chief Financial Officer, Ms. Meng Wanzhou,
of Huawei, a huge PRC global telecommunications
equipment and services provider, recently passing Apple to become the
second-biggest smartphone maker after Samsung. Huawei is one of China’s
proudest achievements, particularly since its founder, Ren Zhengfei, is himself
a former People's Liberation Army officer. Did I mention that Ren just happens
to be Ms. Meng’s father? The warrant apparently addresses Huawei’s and Meng’s
violating recently reinstated U.S. sanctions against Iran… sanctions China
considers to be illegal since the U.S. did sign the U.N.-sponsored six-party
Iran nuclear accord, accepting a removal of most of those sanctions, then
withdrew and reneged.
Meng lives part-time in
Chinese-friendly Vancouver, Canada, and of course, that required U.S. feds to
ask Canada to extradite her pursuant to a U.S.-Canadian treaty. Canada
complied. Then came the bail hearing (pictured above), since even with millions
of dollars of major real estate in Vancouver, mega-billionaire Meng’s family
would consider that a drop in the bucket. Meng got bail. But China still railed,
as the December 7th blog describes, claiming “human rights
violations.” Canada said that the extradition request was merely the
implementation of an ordinary criminal complaint, not a political effort.
China was clearly not amused. But
instead of taking their ire out on the United States, China focused instead on
Canada. China began by taking high-ranking Canadians, not subject to diplomatic
immunity, into custody. First, they detained a former Canadian diplomat,
Michael Kovig, now working in Hong Kong as the North East Asia senior adviser
for the International Crisis Group, a Brussels-based non-governmental
organization, as he traveled through Beijing.
The same day, a second Canadian, “Michael
Spavor was taken into custody Monday [12/10] after being questioned in the
country’s northeast, near the border with North Korea, Foreign Ministry
spokesman Lu Kang confirmed.” Los Angeles Times, December 14th.
Spavor runs a cultural exchange program with North Korea and was responsible
for bringing American basketball star, Dennis Rodman, into North Korea.
On December 20th, PRC
authorities announced the arrest of a third Canadian, Sarah McIver, an English
teacher who received administrative punishment for illegal employment. It is
not clear that this third detention is related to China’s retaliatory efforts over
the extradition battle. Relations remained strained, nonetheless.
“Canada’s arrest of Meng Wanzhou, the
daughter of one of China’s most prominent tech billionaires, Ren Zhengfei,
infuriated Chinese officials. But Beijing’s tone has been noticeably more
confrontational with Canada than with the U.S., which requested her arrest so
that she could be extradited to face fraud charges related to U.S. sanctions on
Iran. She was freed on bail Tuesday [12/11] but ordered to surrender her
passport and remain in Vancouver, where she has two homes.
“Lu was vague when asked whether the
apprehension of the men was retaliation for Meng’s arrest… ‘As for Canada’s
wrongful detention of Ms. Meng Wanzhou, we have made clear our position. As for
these two Canadian citizens who have been taken [under] compulsory measures by
China’s state security authorities, I can assure you that the Chinese side will
act in accordance with laws and regulations,’ he said.” LA Times.
Canada was a much easier target for
China than a direct confrontation with the U.S. Contradicting Canadian P.M.
Justin Trudeau’s statement that this was nothing more than a run-of-the-mill
extradition request, Donald Trump threw Canada under the bus: “Confirmation
that two Canadians are in custody has added to suspicions that the men were
targeted in retaliation for Ottawa’s role in Meng’s arrest. Chinese officials
see the arrest as a part of the Trump administration’s efforts to block
Huawei’s advance and to contain China’s rise as a major technological rival to
the U.S.
“Canadian officials maintain that
Meng’s detention was simply a matter of legal process under the nation’s
extradition treaty obligations. But President Trump undercut Canada’s position
Tuesday [12/11] when he suggested Meng’s case could be used as a bargaining
chip in the trade negotiations.
“Canadian Prime Minister Justin
Trudeau responded sharply to Trump’s statements, saying, ‘Regardless of what
goes on in other countries, Canada is, and will always remain, a country of the
rule of law.’…Canada’s foreign minister, Chrystia Freeland, said Wednesday that
any country seeking an extradition order should ensure the process is not
politicized…
“The editor of the [PRC] state-owned
Global Times newspaper, Hu Xijin, posted a video on the newspaper’s website
Wednesday warning that China would ‘definitely take retaliatory measures
against Canada” if it did not release Meng.
“He said that if Canada extradited
Meng, “China’s revenge will be far worse than detaining a Canadian.’… Hu said
Canada should not be drawn into tensions between China and the U.S. ‘but should
try to remain neutral.’” LA Times. Ugly just got uglier. Like Trump cares about
Canada and Trudeau anyway.
I’m Peter Dekom, and aren’t you gratified
that our trade policies are in such capable and experienced hands?
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