What's Trump's Real Trade Target: China or Europe?
Mike Mish Shedlock
Out of the blue, and with open rebuke form Democrats and Republicans, Trump reversed sanctions on China.
This was peculiar in and of itself, but his rationale raised more than a few eyebrows.
All of a sudden. Trump is concerned about "too many jobs lost in China"!
One can rationalize this is about Rotting Cherries, Spoiled Pork, and Car Inspections, but could it be there is more than meets the eye?
Bloomberg reports Iran’s Door to the West Is Slamming Shut, and That Leaves China.
China is “already the winner,’’ said Dina Esfandiary, a fellow at the Centre for Science and Security Studies at King’s College in London, and co-author of the forthcoming ‘Triple Axis: Iran’s Relations With Russia and China’.
5,000 German Corporations Hit By Trump Policy
One can rationalize this all away, but a translation from Spiegel Online underscores the key idea: Trump's Policies Hit Nearly 5,000 German Companies.
Sanctions on Europe. Not Iran
Eurointelligence fills in some blanks.
Over the last three days it gradually dawned on the Germans that Donald Trump's sanctions against Iran are in reality sanctions against Europe, and Germany in particular. The combination of third-party sanctions and changes to US tax laws has led to a situation where a large number of German companies now have an overwhelming interest to shift their business to the US, according to Spiegel Online.
FAZ notes that the helplessness of the German government is becoming increasingly evident, both economically and politically. The paper notes that even Angela Merkel is casting doubt on whether it is possible to maintain the Iran nuclear agreement after Trump's decision.
The cover of Der Spiegel this week this week, "Goodbye Europe" says it all.
Politico reports Europe’s ultimate Trump strategy: Appeasement.
Intent or Collateral Damage?
China responded to Trump tariffs by inspecting fruit to the point it rotted, pork until it spoiled, and Ford autos in such a manner that it required disassembly. Trump changed tactics.
It's easy to make a case that the only thing Trump understands is force.
It's also possible Trump is totally clueless and he is ruled only by spur of the moment decisions.
Finally, one can make a case that Trump's true intent all along was to bust up EU solidarity and everything else is just a sideshow.
It's easy to make that case even though Occam's Razor suggests the alternatives are more likely.
Regardless, the EU's roll over and play dead response to the sanctions is a sure loser for the EU and a sure winner for China.
Ball in Play
EU, the ball is in your court.
Last week Merkel stated it's time for “Europe to take its destiny into its own hands.”
OK - Do it!
Staring at the ball as it rolls over you does not win points.
Mike "Mish" Shedlock