China Trade Deal Phase I, An Honest Review
The View from the Middle
Here’s a great Presidential Debate question – What country represents the greatest geopolitical threat to America? Remember, this question was asked of Mitt Romney in 2012 and he answered, Russia. You probably remember Barack Obama’s answer even better. He told Romney that “the 1980’s wanted their foreign policy back”. While this was a cute, clever taunt by then President Obama, recent history has proven Romney to be more on-target than our then Commander in Chief. Today, if that question was asked, I would hope that both candidates would agree that the answer is – China.
Newt Gingrich has recently written an excellent book called Trump vs. China. Don’t be fooled by the title. It probably should have been entitled The USA vs. China. It confirms that China’s long-term plan is to replace us as the single global power (the middle kingdom as they would call it) and to do so in a very short order (probably even in my lifetime and certainly in the lifetime of the millions of millennials and Generation X’s and Z’s). And the consequences of this authoritarian, communistic state surpassing us economically and militarily are chilling.
Newt helps his readers understand how we got to where we are today. You see, for many years, from at least Reagan through Clinton, it was our national policy to build China up economically and militarily to reduce Russia’s influence on them. During those years China played the poor, helpless, 3rd world country card and gladly lapped up our financial aid, intellectual capital and even our military assets and technology. Somewhere in the early 2000’s however, China began to hit their stride and employed a strategy of lying, cheating and stealing to reach their eventual goal, which is to see them return to their rightful position in the world – the middle kingdom.
Trump, to his credit, did at least recognize and begin to address one area of China’s plan, their economy. You see, China has been cheating everyone in the world for years in this area. They manipulate their currency to give their products an advantage in every marketplace. They have obstructed participation in the Chinese market by forcing companies to acquire Chinese partners in their ventures and requiring that those partners maintain a 51% control of those businesses. This, of course, accomplished another goal of the Chinese government, and that was the forced transfer of intellectual capital into Chinese hands. And where this technique to forcefully attain the secrets of each business’ success (their processes, their techniques and technology), their government has looked the other way as Chinese companies stole from their competitors and partners alike. All of this has contributed to the $621 billion annual deficit in goods and services experienced by the US with China as reported by The Department of Commerce in 2018.
The phase one deal with China does at least address these issues and that is why the markets have responded so well to it. First, China has promised to buy an additional $200 billion in goods and services from the US over the next two years. This will mostly come in the form of manufactured goods, agricultural products and energy. Second, China has agreed to allow investment firms, asset management companies and insurance firms to be wholly owned by foreign companies by April 1st, 2020. Additionally, China has agreed to expand their laws and increase penalties for IP (Intellectual Property) theft and to participate in conflict resolution to settle allegations levied by US companies. Finally, China has promised not to manipulate their currency to disadvantage the US and other countries and agreed to follow International Monetary Fund rules on macroeconomic policies.
This indeed was a good first step, but of course, the Chinese have made similar promises in the past. What gives us any hope that China will not ignore their own promises yet again? In other words, what is to keep China from lying and cheating again, just as they have in the past?
The answer is that Trump holds the sword of tariffs over China’s head thus positioning himself as the judge if China violates any of their vows. He just canceled an increase in tariffs from 25% to 30% on $250 billion in Chinese imports into the US market (their exports). He also reduced tariffs on $112 billion of their exports from 15% to 7.5% as part of this phase one deal. That’s a $20 billion hammer that Trump can slam down if China decides to renege on their promises.
This still does not guarantee that China won’t try to squirm out of their agreement just as they have in the past, but Trump’s ability to punish them quickly (a great negotiating technique) gives me hope. And don’t we all HOPE this actually works?
Thursday, January 23, 2020
Thursday, January 9, 2020
Promises Made, Promises Kept
Promises Made, Promises Kept
The View from the Middle
One of the big debates across the country today is about whether President Trump is a genius or a crazy man. Actually, I could defend either side of this argument as there is ample evidence either way. He is, on the genius side, a very successful business man who has amassed a multi-billion dollar fortune by anyone’s measure. He also orchestrated, arguably, the most amazing political upset in American history in his only run for political office. He spent half the money Hillary did and yet captured almost 80 more electoral college votes than she. And, in the short three year period since his election, his policies have delivered record unemployment, a thriving economy and relative peace in the world, especially as measured by US military casualties.
On the other hand, Trump can be erratic (some would say this is actually one of his strengths), he can be rude or crude (take your pick) and can even get in the way of his own successes. He certainly in not politically correct and has decided to do his own dirty work instead of farming it out like Bill Clinton famously did with James Carville and as Barack Obama did with an army of attack dogs. Some say this is crazy while his avid followers suggest it is part of his genius. I guess we’ll all find out in 2020 who’s theory is correct.
But there is one thing that sets this President apart from almost every politician and virtually every President in my lifetime. He actually keeps his promises. Remember what Donald Trump ran on. He said he was going to lower taxes, and he did for every American business and 80% of individuals. The only people who did not experience a tax break are those who live in high tax states who aren’t able to deduct those high state taxes from their gross incomes, the SALT (state and local taxes) provision.
Candidate Trump promised to reduce regulations, and he has done so. He had a stated goal of eliminating two regulations for every one that was added, and he has smashed that goal. In the first two years of his Presidency he has eliminated 124 regulations while adding only 17, a seven to one ratio. This deregulation has saved the country tens of billions of dollars no matter who’s estimate you accept.
He also ran on building a wall between the US and Mexico, and despite tantrum-style resistance from Democrats, he has managed to build over 100 miles of that wall since 2017. Much of that wall has replaced old, ineffective and dilapidated existing walls, but that was also part of the plan from the beginning. A wall by itself is not the answer to controlling illegal immigration, but I believe it is an important component. And finally he made a list of potential Supreme Court Justices he might appoint, and he has stuck to that list. You may disagree with some these policies or his Supreme Court picks, but any thinking person (this does not include the lame-stream media) would have to admit that Trump is delivering on his promises.
He has also kept his promises on the foreign policy front. First, he moved the US embassy in Israel from Tel Aviv to Jerusalem. This was promise made by at least two previous Presidents (Bush and Obama) and resulted in none of the violence promised by his opponents. Trump promised to get out of NAFTA and to strike a new deal with our two largest trading partners, Mexico and Canada, and he is well on his way in delivering the USMCA despite the childish foot-dragging by Nancy Pelosi. He has also crafted a new deal with Japan and will soon strike a new deal with Great Britain.
Trump has also made good on his threats (another version of promises) against our adversaries. He told President Assad of Syria that he would take action if Assad used chemical weapons on his own people, a violation of the Geneva Convention of 1929 and the CWC (Chemical Weapons Convention) of 1993. Unlike President Obama, who erased his red line when Assad employed chemical weapons in 2013, Trump sent 59 cruise missiles into Syria when Assad did the same thing in 2017. This apparently got Assad’s attention, since he has not repeated that mistake.
President Trump has also made promises to Iran. During the campaign, he promised to get out of the Iran Nuclear Deal, which he did almost immediately after he was elected, a move I totally support. He also made a promise to retaliate if Iran killed Americans. Then, on December 27th of 2019, an American contractor, Nawres Hamid, was killed in an attack by an Iranian backed militia in Iraq. President Trump did not go back on his word. A week later he had our military take out the conductor of Iran’s murdering, terrorist proxy forces, Qassim Soleimani. Promises made, Promises kept!
Right now, it appears that Iran has gotten the message and is standing down and I hope our actions will lead to a changed Iranian attitude. No more “death to America” and “death to Israel” as we give them $150 billion and another $1.7 billion in cash. I hope that Iran decides to join the family of nations and starts to make decisions that are in the best interest of their people, but only time will tell. I believe, however, that appeasement of evil did not work prior to World War II and appeasement of evil will not work today. Difficult decisions must be made and only a united America can make the world a safer place. I would not encourage any politician to take the side of a nation that is the world’s largest sponsor of terror or a monster like Soleimani over the United States.
The View from the Middle
One of the big debates across the country today is about whether President Trump is a genius or a crazy man. Actually, I could defend either side of this argument as there is ample evidence either way. He is, on the genius side, a very successful business man who has amassed a multi-billion dollar fortune by anyone’s measure. He also orchestrated, arguably, the most amazing political upset in American history in his only run for political office. He spent half the money Hillary did and yet captured almost 80 more electoral college votes than she. And, in the short three year period since his election, his policies have delivered record unemployment, a thriving economy and relative peace in the world, especially as measured by US military casualties.
On the other hand, Trump can be erratic (some would say this is actually one of his strengths), he can be rude or crude (take your pick) and can even get in the way of his own successes. He certainly in not politically correct and has decided to do his own dirty work instead of farming it out like Bill Clinton famously did with James Carville and as Barack Obama did with an army of attack dogs. Some say this is crazy while his avid followers suggest it is part of his genius. I guess we’ll all find out in 2020 who’s theory is correct.
But there is one thing that sets this President apart from almost every politician and virtually every President in my lifetime. He actually keeps his promises. Remember what Donald Trump ran on. He said he was going to lower taxes, and he did for every American business and 80% of individuals. The only people who did not experience a tax break are those who live in high tax states who aren’t able to deduct those high state taxes from their gross incomes, the SALT (state and local taxes) provision.
Candidate Trump promised to reduce regulations, and he has done so. He had a stated goal of eliminating two regulations for every one that was added, and he has smashed that goal. In the first two years of his Presidency he has eliminated 124 regulations while adding only 17, a seven to one ratio. This deregulation has saved the country tens of billions of dollars no matter who’s estimate you accept.
He also ran on building a wall between the US and Mexico, and despite tantrum-style resistance from Democrats, he has managed to build over 100 miles of that wall since 2017. Much of that wall has replaced old, ineffective and dilapidated existing walls, but that was also part of the plan from the beginning. A wall by itself is not the answer to controlling illegal immigration, but I believe it is an important component. And finally he made a list of potential Supreme Court Justices he might appoint, and he has stuck to that list. You may disagree with some these policies or his Supreme Court picks, but any thinking person (this does not include the lame-stream media) would have to admit that Trump is delivering on his promises.
He has also kept his promises on the foreign policy front. First, he moved the US embassy in Israel from Tel Aviv to Jerusalem. This was promise made by at least two previous Presidents (Bush and Obama) and resulted in none of the violence promised by his opponents. Trump promised to get out of NAFTA and to strike a new deal with our two largest trading partners, Mexico and Canada, and he is well on his way in delivering the USMCA despite the childish foot-dragging by Nancy Pelosi. He has also crafted a new deal with Japan and will soon strike a new deal with Great Britain.
Trump has also made good on his threats (another version of promises) against our adversaries. He told President Assad of Syria that he would take action if Assad used chemical weapons on his own people, a violation of the Geneva Convention of 1929 and the CWC (Chemical Weapons Convention) of 1993. Unlike President Obama, who erased his red line when Assad employed chemical weapons in 2013, Trump sent 59 cruise missiles into Syria when Assad did the same thing in 2017. This apparently got Assad’s attention, since he has not repeated that mistake.
President Trump has also made promises to Iran. During the campaign, he promised to get out of the Iran Nuclear Deal, which he did almost immediately after he was elected, a move I totally support. He also made a promise to retaliate if Iran killed Americans. Then, on December 27th of 2019, an American contractor, Nawres Hamid, was killed in an attack by an Iranian backed militia in Iraq. President Trump did not go back on his word. A week later he had our military take out the conductor of Iran’s murdering, terrorist proxy forces, Qassim Soleimani. Promises made, Promises kept!
Right now, it appears that Iran has gotten the message and is standing down and I hope our actions will lead to a changed Iranian attitude. No more “death to America” and “death to Israel” as we give them $150 billion and another $1.7 billion in cash. I hope that Iran decides to join the family of nations and starts to make decisions that are in the best interest of their people, but only time will tell. I believe, however, that appeasement of evil did not work prior to World War II and appeasement of evil will not work today. Difficult decisions must be made and only a united America can make the world a safer place. I would not encourage any politician to take the side of a nation that is the world’s largest sponsor of terror or a monster like Soleimani over the United States.
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