What to make of the new trade deal with China? The deal seems to restore the US-China trade relationship to where it was before Trump launched his “easy to win” trade war. Nothing that China has agreed to departs markedly from what it agreed to during the Obama administration. In 2015, Obama and Xi Jinping announced an end to cyber-intellectual property theft and embarked on a next round of negotiations over market access.
Trump’s Phase I agreement barely restores China’s agricultural purchases to where they were before 2017, even though Trump presented it as a victory. If one of your main customers boycotts you and then agrees to start buying again, but is buying fewer goods, it’s disingenuous to announce that they had promised to buy more.
After two years of mounting tariffs hostilities, the Phase I agreement has cost the US more than $30 billion in subsidies to American farmers. It has cost American consumers tens of $ billions in tariffs. It has forced some US companies to diversify their supply chains out of China at an additional cost of $ billions.
Trump and his trade sidekick Peter Navarro, fundamentally misread the relative strengths of both the US and China. They thought that Chinese exports to the US are the key driver of the Chinese economy. If that were true, tariffs would be a potent weapon.
But a recent McKinsey study shows that China has aggressively shifted from an export-driven economy to a domestic consumer-driven one. Much of any gain in Chinese exports primarily accrues to the multinational companies like Apple that source in China, and not to the domestic Chinese economy.
At best, Trump fought China to a draw. At worst, China now understands that less economic engagement with America is in its self-interest. The trade war and its new, paper-thin truce leaves America with less leverage going forward. On to cartoons.
Was Round One a win?
Why are our sports teams held to a higher standard than our politicians?
Georgian Sheep returning for the winter from the high mountains. Mixed among the sheep are Georgian Shepherd dogs who are the same size and color, who protect the flocks from wolves – photo by Amos Chapple
Donald Trump is in China for a two-day visit, and North Korea (NK) is certainly on the agenda. While in Seoul, Trump urged “responsible nations” to unite and stop supporting NK:
You cannot support, you cannot supply, you cannot accept…every nation, including China and Russia [must] fully implement recent UN Security Council resolutions on North Korea.
Trump praised China for taking some steps against NK, but urged them to do more, as administration officials believe the border between China and NK still remains a trade corridor. From Trump:
I want to just say that President Xi — where we will be tomorrow, China — has been very helpful. We’ll find out how helpful soon…But he really has been very, very helpful. So China is out trying very hard to solve the problem with North Korea.
What Trump and his administration need to figure out is a new strategy for NK. It is doubtful that China would cut off NK, because it fears that if the Kim regime collapses, millions of NK refugees will stream across the border into China.
North Korea is unlikely to launch a nuclear attack on the United States. However, if North Korea retains its nuclear weapons, it is likely to lead South Korea, Japan, and possibly Taiwan, Australia and Vietnam to go nuclear themselves. From the Chinese perspective, that would be a strategic catastrophe.
He makes the point that China has never sought world domination, in fact, it wants to maintain strategic distance from its neighbors. However, maintaining that distance requires a buffer zone around China, which historically China has sought, and is seeking now in the South China Sea.
Lind suggests that if the states on China’s periphery had nuclear weapons, China would be unable to keep a buffer zone of weak neighbors that it can dominate. Even Vietnam could stop China cold if they had nukes. The states bordering China, instead of serving as a buffer, could become existential threats sitting right on her frontier.
Lind’s idea is that Trump should make the case about the need to restrain North Korea’s nuclear program, but instead of threatening with trade or sanctions if China refuses, he should say:
If North Korea retains its nukes and delivery systems, we can no longer advise our allies in Asia not to go nuclear.
However, that would be a transformational change in the bedrock US principle of nuclear non-proliferation.
Lind explains that while Beijing does not care about the threat NK nukes pose to the US, they fully understand the strategic threat of nuclear weapons pose in the hands of America’s regional allies.
Wrongo doesn’t have much time for Mr. Lind, who has advocated that police in the US carry rocket-propelled grenades, and who has said that the “next real war we fight is likely to be on American soil.”
The idea of proposing doubling the membership in the nuclear club goes against American values, despite its source, might give the US some additional leverage with China.
But, China already knows all of this, so would it achieve much?
What China can do is push North Korea to the negotiating table. But, President Trump has not only to be willing to negotiate, he has to give a carrot to China. That would be to partner with them in a South Asia trade deal. China can’t be bullied by Mr. Trump into bullying NK. Trump will need “strategic patience” to get a deal that involves China, Russia, Japan, and, of course, both North and South Korea.
There may be a “deal” to be made, but does the Deal-maker-in-Chief has the ability to make it?
There are two inescapable conclusions in the aftermath of Trump’s missile strikes in Syria. First, the US can no longer focus only on destroying ISIS. Now, we are in the position of having to also burn calories dealing with the fallout from those strikes with Russia, Syria and Iran.
Second, we can no longer keep our previous distance vis-à-vis the Syrian civil war separate from our relations with Russia. Before Trump’s Tomahawking, it was possible to argue that Russia’s involvement in Syria was peripheral to our goals in Syria, and certainly not central to overall US/Russian relations. Now, the US has put at risk the limited cooperation we have had with Russian in Syria regarding ISIS.
And for what? Apparently, Trump’s missile strikes didn’t change much on the ground in Syria. In fact, the Syrian air force just used the same air strip that we blasted with 60 tomahawk missiles (at the cost of $1million a copy) to again bomb the same city that suffered the sarin attack.
Doubtless, Trump will call this a “victory” but, if you use $60 million to disable an airbase, shouldn’t it be disabled? Again, the question is: What was Trump trying to accomplish? He has taken a dangerous situation, and seemingly made it more dangerous. To Wrongo, it looks like Trump got nearly nothing from his attack. Does this remind anyone of Trump’s attack on Yemen?
Since the Syrian fly-boys are back in the air, bombing the SAME city, Trump looks like a fool. Want to bet that he will feel the need to correct that impression? On to Cartoons!
Who/What was Trump aiming his tomahawks at?
We tipped off Putin that the tomahawks were coming:
Trump meets with China’s Xi and learns something:
Negotiations with Xi weren’t as easy as Trump thought:
Mitch McConnell, wrecker extraordinaire:
Invoking the nuclear option made things much easier for the GOP:
On this New Year, I am most concerned about the difficulties of the masses: how they eat, how they live, whether they can have a good New Year…
The US will continue to lose influence globally despite “Mr. Unpredictable” becoming our Orange Overlord: Trump brags about winning when he negotiates. That has been undeniably true in his real estate and name brand licensing. He will find that when the other side doesn’t need access to his brand in order to succeed, he will have to resort to instilling fear. That may work once, but it will not work consistently.
A corollary: Trump arrives in the Oval Office as an overconfident leader, the man with no plan but with a short attention span, and within six months, he will have his first major policy failure. Getting his hand burned will make him more subdued, more conservative and less populist thereafter.
A second corollary: The triumvirate of Russia/Turkey/Iran will elbow the US firmly out of the Fertile Crescent, and secure friendly regimes in Damascus, Baghdad and Tehran. This will push American influence in the Middle East back to just the Gulf States, a weakened Saudi Arabia, and an increasingly isolated Israel.
Domestically, drug abuse, suicide, and general self-destructive behavior will continue to climb and become impossible to ignore.
The Trump stock market rally has already turned into the Santa Selloff. The Dow peaked on December 20 at 19,975, 25 points away from party-hat time. But since then, Dow 20,000 slipped through our fingers like sand. It closed the year at 19,719, down 281 points from 20k.
Regarding the stock market, many people who want to sell stocks waited until 2017 in order to pay lower capital gains tax. Selling in January could lower prices further.
The growing antibiotic resistance to main stream drugs will impact health in the US.
Meta Prediction: It is certain that few Trump voters will get the results they voted for. Some people who voted for Trump have incompatible outcomes in mind, so it’s a virtual guarantee that a sizable minority are going to feel cheated when they fail to get what they were promised.
OTOH, when Trump fails, most of his base will blame anyone but the Donald. The question is, when disillusionment sets in, will the reaction be a turning away, or a doubling down on the anger?
Wrongo thinks anger will win out.
The coming Trump administration will seem like a fractious family outing: Just under half of the family (the “landslide” segment) wanted to go out, but now, the whole family has to go. Those who wanted to stay home will sulk in the back seat while Daddy tells them to stop bitching.
Meanwhile, once we are out of the driveway, it dawns on everyone that Daddy hasn’t decided yet where to go. Everyone pipes up with suggestions, but Daddy again tells everyone to shut up, because it’s his decision alone. There will be the usual “are we there yet?” complaining, some motion sickness and incessant fighting over who is touching whom.
Daddy won’t reveal the destination, but insists everyone will love it once they get there, even those who wanted to stay home, those who wanted to go the beach, and those who wanted to head over the cliff like Thelma and Louise.
Time for our Monday Wake Up Call, “Wake Up Everybody”, originally by Harold Melvin and The Bluenotes, featuring Teddy Pendergrass. Teddy left the group for his solo career after this album.
But, today we will hear and watch John Legend’s cover of the tune, backed by the Roots Band along with Melanie Fiona, and Common. The song is as strong as it was 42 years ago when it was released:
Those who read the Wrongologist in email can view the video here.
We’ve entered uncharted territory. Trump had a phone call with the president of Taiwan. Why is that such an issue? Presidents speak to other world leaders all the time, but American presidents have not spoken to the president of Taiwan since 1979. This studied form of non-recognition is at the core of the One-China Policy.
We learned from experience in Korea and Vietnam, where we acted with hostility to both “two country” standoffs between a communist and a non-communist government. We learned, and then changed the game when it came to the two Chinas. That is, until President-Elect Trump was lured into the Taiwan call by his advisors, John Bolton and Stephen Yates. This from the Guardian: (strike out and brackets by the Wrongologist)
Bolton wrote in the Wall Street Journal in January: “The new US administration could start with receiving Taiwanese diplomats officially at the State Department; upgrading the status of US representation in Taipei from a private ‘institute’ to an official diplomatic mission; inviting Taiwan’s president to travel officially to America; allowing the most senior US officials to visit Taiwan to transact government business; and ultimately restoring full diplomatic recognition.”
Stephen Yates, a former White House aide to Dick Cheney now advising the Trump transition was in Taiwan at the time of [Trump’s] the call. “It’s great to have a leader willing to ignore those who say he cannot take a simple call from another democratically elected leader,” Yates tweeted.
China reacted by saying Trump needs to be educated about the world. Scott Adams, Trump butt-boy, puts it in about the most favorable light possible:
Trump is “setting the table” for future negotiations with China. He just subtracted something from China’s brand that they value, and later he will negotiate with them to maybe give it back in some fashion. Probably in return for some trade concessions.
It didn’t end there. Trump apparently has invited Philippine President Duterte to the White House. Figuring out how to resolve Duterte’s issues with the US, his embrace of China, and his demonstrated abuse of human rights in the Philippines should be high on the new administration’s list of issues. It would have been smart to have the outline of an agreed joint solution in place before rewarding Duterte with a state visit.
And there was Trump’s phone call with the Prime Minister of Pakistan. According to the Pakistani account of the conversation, Trump told Nawaz Sharif that Pakistan is a “fantastic” country full of “fantastic” people that he “would love” to visit as president.
Just awesome, except for Trump ignoring that India, our real partner in that part of Asia, is Pakistan’s enemy. Trump risks appearing to reward Pakistan at the expense of our relationship with India. Again, the US has maintained a balancing act between these two countries, who have a history of war and skirmishes over their disputed border.
The jury is out on what Trump is trying to do, and whether it is based on strategy, or ideology. Speaking with Taiwan’s and Pakistan’s leaders are potentially dangerous moves, as is his engagement with Duterte.
They are also potentially revolutionary. Every out-of-the-box move by Trump challenges norms and potentially blows up longstanding ways of doing things. If you are gonna shake things up, it’s all-important that you understand exactly why we have done things the way we have, and what the implications are of change. We know Trump is an instinctive guy, and not a willing student. The danger is his willingness to overturn complex situations where governmental institutions have had very good reasons for the policy they support.
This is the dark underbelly of Trump’s populism. He was elected to shake things up by voters who dismiss facts, if presented by journalists.
You start by discrediting what came before. You call it elite failure. You shake things up because you can.
Speaking to business leaders in Washington on Tuesday, Giuliani said the US would increase its number of troops to 550,000, instead of shrinking it to 420,000. He also said they intended to take the navy up to 350 ships. It currently has around 280, but the plan is to decrease to 247: (brackets by the Wrongologist)
At 350, [ships] China can’t match us in the Pacific. At 247 ships, we can’t fight a two-ocean war; we gave up the Pacific. If you face them with a military that is modern, gigantic, overwhelming and unbelievably good at conventional and asymmetric warfare, they may challenge it, but I doubt it
Out of the probable Clinton/Nuland frying pan, into the reality of the Trump/Giuliani dumpster fire.
The Trump plan is to build up the Navy in order to fight a “two-ocean war”. It’s going to be difficult to build that size fleet in four years. A 350 ship Navy will be prohibitively expensive – the Navy’s new DD(X) destroyers cost $4 billion each; 70 new ships @ $4 billion each is $2.8 trillion, (and it might be more like 100 ships). But the DD(X) is not yet proven to work very well in rough seas, which seems a bit of a problem.
Giuliani thinks that China wouldn’t challenge 350 ships. He may be correct. That will stretch our economy, and it would certainly stretch China’s. China of course, is likely to respond with a military build-up of its own: They can probably build 350 (or more) anti-ship missiles with nuclear warheads in four years, and have the ability to blow up quite a number of the Giuliani-class navy vessels if necessary.
Want to see a few more Pacific reefs? A US/China military contest could deliver them.
Trump ran to the left of Clinton regarding Russia and the Middle East. He spoke about normalizing relations with Russia and lately, he has said Russia and the US should cooperate on defeating ISIS in Syria. What is the point of seeking decent relations with Russia, the other nuclear super-power, if you are going to press a military bet with the third largest nuclear weapons state?
We thought that Trump wanted a trade war with China, but we were only half right. He’s going to re-engage with battleship diplomacy, in true Ronald Reagan Cold War fashion.
Trump wouldn’t bother augmenting the Pacific fleet unless his objective was to try to out-gun, out-spend, out-trade andoutright suppress the rise of China.
That strategy will lead to a sharp Chinese response. It isn’t at all clear that Russia would stay neutral in this power game. Russia might support China, like they did in the 1950s. Forbes says this: (emphasis by the Wrongologist)
Although the Chinese and Russians may not be natural economic allies due to historical grievances…and alleged xenophobia of Russians toward Chinese businessmen, an expanded alliance between the two countries could unfold if either presidential hopeful, particularly Donald Trump, acts on promises to get tough on China…A Chinese-Russian economic relationship that develops naturally, rather than out of security fears on both ends, is one that is more favorable to the US.
There has always been some sense in a muscular China policy. That was why Obama’s plan was to “pivot” toward Asia.
China shows every intention of expanding its influence outward. Containment has always been our best option with them, unless you believe in military confrontation. We should continue the current strategy of promoting/supporting resistance by China’s neighbors, supporting a regional arms buildup by South Korea, Japan, India, Vietnam and others. We can hope that this strategy will, over time, convince the Chinese to give up their imperial dream of dominating the South China Sea and its contiguous states.
Trump got elected on a more isolationist premise than Clinton’s or Obama’s. He led people to believe that he’d be far more focused on domestic policy and domestic security, including things like terrorism and immigration.
But since GOP controlled Congress will move quickly to end the Sequester, which could add $500 billion in defense spending over the next decade, now it seems that his administration will be more hawkish, possibly even more than what Hillary Clinton would have wanted.
Can’t we put these war-mongering dinosaurs out to pasture? Then they can dress up like WWII Generals and play out their global dominance fantasies whenever they want.