The Last Refuge
August 14, 2019
Those who could not see this coming are those who just don’t pay attention to how President Trump operates the geopolitical influence of economics. This is Trumpian.
U.S. President Donald Trump and British Prime Minister Boris Johnson are walking their respective trade teams through a process to deliver a U.S-U.K trade deal on the day after a no-deal Brexit is scheduled to happen October 31st. An interim trade agreement that goes into effect November 1st 2019 is pure Donald Trump win/win deal-making.
President Trump supports the nationalistic position, purposes and intents of Brexit. PM Johnson has promised to deliver Brexit by the mandatory date of October 31st. One of the benefits, and also concerns amid the political left in the U.K, surrounds the economic impacts. President Trump and PM Johnson would counter all those concerns with the announcement of an agreement for an interim bilateral trade deal ahead of Brexit.
This strategic approach, a deal that delivers both the Brexit result and the economic stability to offset any Brexit downside concerns, was the original idea that President Trump proposed to Theresa May two years ago.
LONDON (Reuters) – Britain and the United States are discussing a partial trade accord that could take effect on Nov. 1, the day after Britain is due to leave the European Union, a senior Trump administration official said on Tuesday.
During a visit to London, U.S. national security adviser John Bolton discussed with British trade minister Liz Truss the possibility of the two countries’ leaders signing a road map declaration toward a trade deal.
That could take place at this month’s G7 summit meeting in France, the official said.
Bolton and British finance minister Sajid Javid discussed the possibility of a temporary trade agreement that covered all sectors. Such a deal could last for something like six months, the official told reporters.
Britain is due to leave the European Union on Oct. 31 and Prime Minister Boris Johnson has said he is prepared to take the country out of the bloc without a deal although he hopes to secure an orderly departure with an agreement.
The current impasse with the EU leaves Britain facing an exit without any formal transition period or legal agreement covering issues such as trade, data transfers and border policy, prompting some businesses to warn of damage to their operations.
During a two-day visit, Bolton told British Prime Minister Boris Johnson that President Donald Trump wanted to see a successful British exit from the European Union on Oct. 31 and that Washington would be ready to work fast on a U.S.-UK free trade agreement. (read more)
Aides to Trump and Johnson are laying the groundwork for an announcement on the issue when they meet on the sidelines of the G-7 summit in France in two weeks. Such a statement could outline a road map for negotiations and how the two countries envision their future trade ties, the official said.
The timing of it — during the G-7 and at their first meeting — would be intended to demonstrate a united front between the U.S. and the U.K as Trump and Johnson gather with European leaders, including German Chancellor Angela Merkel and French President Emmanuel Macron.
CTH could see the outline of what President Trump had in mind back in 2017. It’s a stunning maneuver, but also difficult to explain. Think of it like a U.K. version of the NAFTA fatal flaw where Britain is positioned like Mexico/Canada, and the U.S. is positioned like China. There would be massive, beyond stunning, economic up-side for Britain.
What Trump and Johnson could construct is a bilateral trade deal between the U.S. and the U.K that has genuine reciprocity and negligible trade barriers. Like a trade freeway between the U.K and the U.S, but only between the U.K. and U.S.
With the EU no longer able to influence trade agreements involving the U.K. European companies, and countries (Poland, Hungary etc.) could get tariff-free access to the U.S. market by operating out of Britain, or using transnational shipping through Britain.
Simultaneously, the U.S. could ship tariff free into the EU (to a receiving EU corporation, or EU subsidiary of a U.S. corporation) by exporting to Britain. The UK would be the hub for massive economic activity between North America and Europe.
If France (the EU) is charging Canada a high duty for imported Canadian cheese; Canada, through the USMCA pact could ship to a holding company in Britain who would then transfer product (duty free) to the receiving French company who is operating in the U.K, and distributing in France. [A French company in the U.K. would receive in the U.K without the French (EU) duty.]
Eventually all corporations in the EU, who wanted to do business with North America, would start operations in the U.K….. OR, the EU would have to drop it’s one-way tariff policy (ie. the Marshall plan is ended). Think about the leverage this creates.
Of course this process would completely change the trade dynamic in Europe; and completely change the trade dynamic between Europe and North America. So how would Trump and Johnson start? Answer: Establish an interim tripwire to measure success. Hence you get this phrase:
“[…] Such a deal could last for something like six months, the official told reporters.”…
Of course an interim deal… because the EU bloc will respond to it… so a reevaluation at six months, prior to any massive investment outlays, is exactly what a CEO would create.
Donald Trump isn’t a politician, he’s working through a plan for what he views (we agree) is bigger than any ideological aspects. “Economic Security is National Security.”
The economics of all things is the priority for President Trump…. step into that lane, or bring forth a policy directive that crosses into that economic lane, and you step into an administration agenda item completely controlled and directed by Donald Trump.
Every policy engagement from the big to the small goes through the prism of economics first and last. Essentially this is the foundation of the Trump doctrine. Brexit, Huawei, Iran, the larger EU, etc., all cross paths with President Trump’s primary focus, U.S. economic wealth, influence and security.
President Donald Trump does not leave anything to chance or misinterpretation…. He’s full bore economic Obsessive Compulsive! …And unapologetic about it.
President Trump has single-handily, and purposefully, stalled the global economy and is forcing massive amounts of wealth back into the United States. In essence Titan Trump is engaged in a process of: (a) repatriating wealth (trade policy); (b) blocking exfiltration (main street policy); (c) creating new and modern economic alliances based on reciprocity; and (d) dismantling the post WWII Marshall plan of global trade and one-way tariffs.
Every minute element within this process, no matter how seemingly small, has President Trump’s full attention. He has assignments to many, but he relies upon none.
This article was posted: Wednesday, August 14, 2019 at 5:49 am