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Xi Jinping will Give Donald Trump a Victory on Trade

Expect Trump to declare a “triumph” in a great trade deal that will feature China’s purchase of more than a trillion dollars of additional U.S. products.




Via The National Interest

With the conclusion of the first round of negotiations yesterday in Beijing, the way ahead for the United States and China to avoid a full-scale tariff war has become clear. With fifty days remaining before the March 1 end of the truce Trump and Xi announced to prevent U.S. tariffs increasing from 10 to 25 percent on $200 billion of Chinese imports, negotiations are likely to continue until the deadline. But before March 1, Trump will declare “victory” in this phase of the trade war—extending the truce for another six months in which a second phase of negotiations will address even more contentious issues.

My assessment is based on my analysis of the economic and political challenges that Trump and Xi are currently confronting. It is also informed by conversations with key members of Chinese president Xi Jinping’s team during a recent visit to Beijing.

In watching Beijing, it’s more instructive to think of it as a corporation than a government. Each December the CEO and his team set objectives for the year to come. Like the leadership of Apple or Amazon, they assess the “headwinds,” including signs of slowdown in the Chinese economy, projections of flagging global economic growth, and uncertainties about the trade war. On that basis they make decisions about how they are going to deliver the growth they have promised shareholders—in China’s case: 6.5 percent.

In a series of closed-door meetings in December, Xi explained to key members of his team that sustaining current levels of economic growth will require “painful choices” and offered them clues about what those were likely to be. On December 18, celebrating the fortieth anniversary of China’s opening to the world, Xi reminded his 1.4 billion fellow citizens—shareholders—that over those four decades, their Party-led government has delivered economic growth of 10 percent a year.

But his speech also struck an odd note when he declared boldly that “there is no great master who can dictate to the Chinese people.” My response was: say what? But as knowledgeable Chinese colleagues explained, this is how he is framing the deal he knows critics will say concedes too much to the Americans—insisting that as master of its own destiny, China is making these changes for the benefit of China.

The most frequent question Beijing policymakers asked me is whether the current U.S. government can take yes for an answer. In an earlier round of negotiations, Secretary of the Treasury Mnuchin and Chinese vice premier Liu He reached an agreement that would have reduced the bilateral trade imbalance by $70 billion in 2019. Both left the bargaining table thinking they were done. But then other members of the Trump team—specifically Trade Representative Lighthizer and White House Assistant Peter Navarro—scuppered the agreement.

In current negotiations, Lighthizer has the lead. The Chinese have studied his successful negotiation of the new NAFTA mere months ago. They see the differences between the old NAFTA and the new agreement as plus or minus 10 to 15 percent. If all it takes to transform what Trump called the “worst trade deal ever made” into a “great deal” is to allow Trump to make it so, then Xi will be happy to play along. As a Chinese friend noted, China was practicing ritualistic hypocrisy long before Columbus discovered America.

Chinese negotiators have dissected the White House summary of what Trump and Xi agreed to at the G20 meeting when announcing the truce. It promised to shrink the bilateral trade deficit, reduce Chinese non-tariff barriers, provide American companies a larger share in key Chinese markets, and constrain theft and forced transfer of intellectual property. But on the much more difficult issue of industrial policy and the role of the government in the Chinese economy, it was instructively silent.

The Chinese team has also noted Trump’s hypersensitivity to the U.S. stock market, which he seems to regard as a virtual political EKG. With the prospect of a wider trade war rattling American markets, which have since October fallen near bear levels, Chinese leaders know that Trump will be entangled in a life-or-death struggle with the Democratic leadership of the House. They calculate that he will do whatever is required to avoid a sharp fall in U.S. markets that could push the United States into recession—and ensure his defeat in the 2020 election.

Thus, before March 1 expect Trump to declare a “triumph” in a great trade deal that will feature China’s purchase of more than a trillion dollars of additional U.S. products. In addition to purchases of additional U.S. gas, oil, and agricultural produces, expect the agreement to include targets for increases in American companies’ share of banking, insurance, and equity markets. Since American producers account for 6 percent of China’s current gas imports, 3 percent of its oil imports, and 14 percent of its agricultural imports, and Chinese companies control 98 percent of its banking market, 95 percent of the equity business, and 91 percent of insurance, all this should not be that hard. Phase two of the negotiations will then struggle with the more difficult issues of protection of intellectual property and industrial policy.

On the larger geopolitical chessboard, the tariff conflict is relatively small potatoes. The terms on which it is settled, or postponed, will not significantly affect the trajectory of the Thucydidean rivalry between a rising China and a ruling United States. Even if China were to concede on every item on the Trump team’s wish list, China’s economy will likely continue growing at more than twice the rate of the United States. The consequences of an agreement (or postponement) for U.S. markets and the president’s political prospects are another matter.

Yogi Berra cautioned against making predictions—“especially about the future.” Nonetheless, if placing my bet today, I make the odds of a “great deal” as more likely than not.

Graham Allison is the author of nine books, most recently Destined for War: Can America and China Escape Thucydides’s Trap? . He is presently the Douglas Dillon Professor of Government at the Harvard Kennedy School.

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Cloak And DaggerLouis RobertRegula Recent comment authors
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One can always stop the existing trades, then negotiate to reinstate them and call it a great victory. Trump wants China to give up Made in China 2025. And the Chinese tactfully stopped referring to it, calling it instead of the urgent need to improve the quality of Chinese products. That is of course the same by another name and there will be no amount of negotiation to get China to forfeit its technological development to reach breakthrough, which in the case of Huawei, ZTE and Chinese space research is already happening. Nor will China stop “subsidizing” -which means financing… Read more »

Cloak And Dagger
Cloak And Dagger

Excellent analysis, and i concur.

Louis Robert
Louis Robert

“… before March 1 expect Trump to declare a “triumph” in a great trade deal… if placing my bet today, I make the odds of a “great deal” as more likely than not”? * China may very well let Trump declare he has triumphed as the “world’s top negotiator” he believes he is, against it… Personally, I bet that as in judo, for instance, that will then be a case of Tomoe-Nage, i.e. of China winning by surrendering. In that case, millenary China will not need to “declare a triumph”: having watched closely, the world will just know it did.… Read more »


Macron cuts ski holiday short, vowing crack down on Yellow Vests (Video)

The Duran Quick Take: Episode 109.

Alex Christoforou



The Duran’s Alex Christoforou and Editor-in-Chief Alexander Mercouris discuss the 18th consecutive week of Yellow Vests protests in Paris. Following last weeks lower participation, Saturday’s Yellow Vests in Paris gathered larger crowds, with various outbreaks of violence and rioting that has been blamed on extreme elements, who French authorities claim have infiltrated the movement.

“Act XVIII” of the protests has shown that the Yellow Vests have not given up. France’s Champs-Élysées boulevard was where most of the violence occurred, with the street being left in a pile of broken glass and flames.

One day after Paris was set ablaze, French President Emmanuel Macron cut his ski holiday short, returning to Paris and vowing to take “strong decisions” to prevent more violence.

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Via Zerohedge

Paris awoke on Sunday to smouldering fires, broken windows and looted stores following the 18th consecutive Saturday of Yellow Vest protests.

Around 200 people were arrested according to BFM TV, while about 80 shops near the iconic Champs Elysees had been damaged and/or looted according to AFP, citing Champs Elysees committee president Jean-Noel Reinhardt.

The 373-year-old Saint Sulpice Roman Catholic church was set on fire while people were inside, however nobody was injured. The cause of the fire remains unknown.

The riots were so severe that French President Emmanuel Macron cut short a vacation at the La Mongie ski resort in the Hautes-Pyrénées following a three-day tour of East Africa which took him to Djibouti, Ethiopia and Kenya.

Macron skied on Friday, telling La Depeche du Midi “I’m going to spend two-three days here to relax, to find landscapes and friendly faces,” adding “I’m happy to see the Pyrenees like that, radiant, although I know it was more difficult at Christmas” referring to the lack of snow in December.

In response to Saturday’s violence, Macron said over Twitter that “strong decisions” were coming to prevent more violence.

Macron said some individuals — dubbed “black blocs” by French police forces — were taking advantage of the protests by the Yellow Vest grassroots movement to “damage the Republic, to break, to destroy.” Prime Minister Edouard Philippe said on Twitter that those who excused or encouraged such violence were complicit in it. –Bloomberg

The French President has family ties in the Hautes-Pyrénées, including Bagnères de Bigorre where his grandmother lived. He is a regular visitor to the region.

Emmanuel Macron (2ndL), head of the political movement In Marche! (Onwards!) And candidate for the 2017 presidential election, and his wife Brigitte Trogneux (L) have lunch April 12, 2017 (Reuters)



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Vesti calls out Pompeo on lying about Russia invading Ukraine [Video]

Secretary Pompeo displayed either stunning ignorance or a mass-attack of propaganda about what must be the most invisible war in history.

Seraphim Hanisch



After the 2014 Maidan revolution and the subsequent secessions of Lugansk and Donetsk in Ukraine, and after the rejoining of Crimea with its original nation of Russia, the Western media went on a campaign to prove the Russia is (/ was / was about to / had already / might / was thinking about / was planning to … etc.) invade Ukraine. For the next year or so, about every two weeks, internet news sources like Yahoo! News showed viewers pictures of tanks, box trucks and convoys to “prove” that the invasion was underway (or any of the other statuses confirming the possibilities above stated.) This information was doubtless provided to US Secretary of State, Mike Pompeo.

Apparently, Secretary Pompeo believed this ruse, or is being paid to believe this ruse because in a speech recently, he talked about it as fact:

U.S. Secretary of State Mike Pompeo called Russia’s annexation of Crimea and aggression in eastern Ukraine an attempt to gain access to Ukraine’s oil and gas reserves.

He stated this at IHS Markit’s CERAWeek conference in Houston, the USA, Reuters reports.

Pompeo urged the oil industry to work with the Trump administration to promote U.S. foreign policy interests, especially in Asia and in Europe, and to punish what he called “bad actors” on the world stage.

The United States has imposed harsh sanctions in the past several months on two major world oil producers, Venezuela and Iran.

Pompeo said the U.S. oil-and-gas export boom had given the United States the ability to meet energy demand once satisfied by its geopolitical rivals.

“We don’t want our European allies hooked on Russian gas through the Nord Stream 2 project, any more than we ourselves want to be dependent on Venezuelan oil supplies,” Pompeo said, referring to a natural gas pipeline expansion from Russia to Central Europe.

Pompeo called Russia’s invasion of Ukraine an attempt to gain access to the country’s oil and gas reserves.

Although the state-run news agency Vesti News often comes under criticism for rather reckless, or at least, extremely sarcastic propaganda at times, here they rightly nailed Mr. Pompeo’s lies to the wall and billboarded it on their program:

The news anchors even made a wisecrack about one of the political figures, Konstantin Zatulin saying as a joke that Russia plans to invade the United States to get its oil. They further noted that Secretary Pompeo is uneducated about the region and situation, but they offered him the chance to come to Russia and learn the correct information about what is going on.

To wit, Russia has not invaded Ukraine at all. There is no evidence to support such a claim, while there IS evidence to show that the West is actively interfering with Russia through the use of Ukraine as a proxyWhile this runs counter to the American narrative, it is simply the truth. Ukraine appears to be the victim of its own ambitions at this point, for while the US tantalizes the leadership of the country and even interferes with the Orthodox Church in the region, the country lurches towards a presidential election with three very poor candidates, most notably the one who is president there now, Petro Poroshenko.

However, the oil and gas side of the anti-Russian propaganda operation by the US is significant. The US wishes for Europe to buy gas from American suppliers, even though this is woefully inconvenient and expensive when Russia is literally at Europe’s doorstep with easy supplies. However, the Cold War Party in the United States, which still has a significant hold on US policy making categorizes the sale of Russia gas to powers like NATO ally Germany as a “threat” to European security.

It is interesting that Angela Merkel herself does not hold this line of thinking. It is also interesting and worthy of note, that this is not the only NATO member that is dealing more and more with Russia in terms of business. It underscores the loss of purpose that the North Atlantic Treaty Organization suffers now since there is no Soviet Union to fight.

However, the US remains undaunted. If there is no enemy to fight, the Americans feel that they must create one, and Russia has been the main scapegoat for American power ambitions. More than ever now, this tactic appears to be the one in use for determining the US stance towards other powers in the world.

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Ariel Cohen explains Washington’s latest foreign policy strategy [Video]

Excellent interview Ariel Cohen and Vladimir Solovyov reveals the forces at work in and behind American foreign policy.

Seraphim Hanisch



While the American people and press are pretty much complicit in reassuring the masses that America is the only “right” superpower on earth, and that Russia and China represent “enemy threats” for doing nothing more than existing and being successfully competitive in world markets, Russia Channel One got a stunner of a video interview with Ariel Cohen.

Who is Ariel Cohen? Wikipedia offers this information about him:

Ariel Cohen (born April 3, 1959 in Crimea in YaltaUSSR) is a political scientist focusing on political risk, international security and energy policy, and the rule of law.[1] Cohen currently serves as the Director of The Center for Energy, Natural Resources and Geopolitics (CENRG) at the Institute for Analysis of Global Security (IAGS). CENRG focuses on the nexus between energy, geopolitics and security, and natural resources and growth. He is also a nonresident senior fellow at the Atlantic Council, within the Global Energy Center and the Dinu Patriciu Eurasia Center.[2] Until July 2014, Dr. Cohen was a senior research fellow at the Heritage Foundation in Washington, D.C. He specializes in Russia/Eurasia, Eastern Europe, and the Middle East.

Cohen has testified before committees of the U.S. Congress, including the Senate and House Foreign Relations Committees, the House Armed Services Committee, the House Judiciary Committee and the Helsinki Commission.[4] He also served as a Policy Adviser with the National Institute for Public Policy’s Center for Deterrence Analysis.[5] In addition, Cohen has consulted for USAID, the World Bank and the Pentagon.[6][7]

Cohen is a frequent writer and commentator in the American and international media. He has appeared on CNN, NBC, CBS, FOX, C-SPAN, BBC-TV and Al Jazeera English, as well as Russian and Ukrainian national TV networks. He was a commentator on a Voice of America weekly radio and TV show for eight years. Currently, he is a Contributing Editor to the National Interest and a blogger for Voice of America. He has written guest columns for the New York TimesInternational Herald TribuneChristian Science Monitor, the Washington Post, the Wall Street Journal, the Washington Times, EurasiaNet, Valdai Discussion Club,[8] and National Review Online. In Europe, Cohen’s analyses have appeared in Kommersant, Izvestiya, Hurriyet, the popular Russian website Ezhenedelny Zhurnal, and many others.[9][10]

Mr. Cohen came on Russian TV for a lengthy interview running about 17 minutes. This interview, shown in full below, is extremely instructive in illustrating the nature of the American foreign policy directives such as they are at this time.

We have seen evidence of this in recent statements by Secretary of State Mike Pompeo regarding Russia’s “invasion” of Ukraine, and an honestly unabashed bit of fear mongering about China’s company Huawei and its forthcoming 5G networks, which we will investigate in more detail in another piece. Both bits of rhetoric reflect a re-polished narrative that, paraphrased, says to the other world powers,

Either you do as we tell you, or you are our enemy. You are not even permitted to out-compete with us in business, let alone foreign relations. The world is ours and if you try to step out of place, you will be dealt with as an enemy power.

This is probably justified paranoia, because it is losing its place. Where the United Stated used to stand for opposition against tyranny in the world, it now acts as the tyrant, and even as a bully. Russia and China’s reaction might be seen as ignoring the bully and his bluster and just going about doing their own thing. It isn’t a fight, but it is treating the bully with contempt, as bullies indeed deserve.

Ariel Cohen rightly points out that there is a great deal of political inertia in the matter of allowing Russia and China to just do their own thing. The US appears to be acting paranoid about losing its place. His explanations appear very sound and very reasonable and factual. Far from some of the snark Vesti is often infamous for, this interview is so clear it is tragic that most Americans will never see it.

The tragedy for the US leadership that buys this strategy is that they appear to be blinded so much by their own passion that they cannot break free of it to save themselves.

This is not the first time that such events have happened to an empire. It happened in Rome; it happened for England; and it happened for the shorter-lived empires of Nazi Germany and ISIS. It happens every time that someone in power becomes afraid to lose it, and when the forces that propelled that rise to power no longer are present. The US is a superpower without a reason to be a superpower.

That can be very dangerous.

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