Trump "Overrules" Cabinet, Prepares To Unleash Global Trade War

Tyler Durden's picture

While one of Trump's recurring campaign promises was that he would "punish" China and other key US trade counterparties if elected, for taking advantage of free-trade by imposing steep tariffs and duties on foreign imports to "level the playing field", the President's stance changed drastically after the election, U-turning following his amicable meeting with China's president Xi Jinping in March, but mostly as a result of pressure by his ex-Goldman advisors to keep existing trade arrangements in place and not "rock the boat."

Now, all that may be about to fall apart.

According to Axios, behind the constant media scandals, "one of the most consequential and contentious internal debates of his presidency unfolded during a tense meeting Monday in the Roosevelt Room of the White House" where with "more than 20 top officials present, including Trump and Vice President Pence, the president and a small band of America First advisers made it clear they're hell-bent on imposing tariffs — potentially in the 20% range — on steel, and likely other imports."

In other words, Trump - true to his campaign promises - is set to launch a global trade wars after all, one where then main country impacted would be China, however the collateral damage would extend to Canada, Mexico, Japan, Germany and the UK.

And what may be even more striking is that Trump overruled his cabinet, as "the sentiment in the room was 22 against and 3 in favor — but since one of the three is named Donald Trump, it was case closed." Axios adds that while "no decision has been made, the President is leaning towards imposing tariffs, despite opposition from nearly all his Cabinet."

Needless to say, if Trump follows through, the outcome would have a profound effect on U.S. economic and foreign policy; Trump will formalize his decision in the coming days.

What is also notable, is that this is the first time  - so far off the record - in which Trump has openly defied his Wall Street establishment advisors, while siding with the Bannon "populist" front:

In a plan pushed by Commerce Secretary Wilbur Ross, and backed by chief strategist Steve Bannon (not present at the meeting), trade policy director Peter Navarro and senior policy adviser Stephen Miller, the United States would impose tariffs on China and other big exporters of steel. Neither Mike Pence nor Jared Kushner weighed in either way.

 

Everyone else in the room, more than 75% of those present, were adamantly opposed, arguing it was bad economics and bad global politics. At one point, Trump was told his almost entire cabinet thought this was a bad idea. But everyone left the room believing the country is headed toward a major trade confrontation.

As Axios adds, the reason why Trump defied the guidance of his Wall Street-derived advisors is Trump's base "which drives more and more decisions, as his popularity sinks — likes the idea, and will love the fight."

This, more than anything, should send shivers down Wall Street's spine, because for all his bluster and outrageous media outbursts, Trump had largely been in Wall Street's pocket so far.

Not anymore, and with Trump's base hell bent on punishing the 1% (which includes Wall Street), if Trump indeed launches global trade war, his future decisions will become increasingly market unfriendly.

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Putrid_Scum's picture

Trade wars usually result in shooting wars.

Putrid

playit's picture

I'm making over $7k a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it. Well, it was all true and has totally changed my life. This is what I do... www.jobproplan.com

silverer's picture

Post your tax return.

cheka's picture

the american system about to return (before skype replaced tariff revenue with taxes on WAGES)?  bring it on.  tariff or continue to get bled out by nyc

along with peak oil, 'free trade' one of their greatest scams

Killtruck's picture

Glad to see him overruling the OverRulers.

not super happy about the trade war thing, but better than what we have going on for the last couple of decades. And not being owned by Wall Street is, as far as I can tell, a new thing for Presidents.

Just don't go for any open-top limo rides in Dallas, Mr. President. They have magic bullets down there.  

FrozenGoodz's picture

Idiot's protectionism is going to get us killed

PT's picture

Why does China need to sell steel to the US anyway?  Why can't they just turn it into cars, washing machines, refrigerators, I-beams etc and sell it to their own peasants???  After all, they're the ones who do all the work.  Why can't they be rewarded for their labour?

 

 

From where does China get its iron ore, energy and other resources?

"Oh, life is so hard!  I work my guts out building stuff all day and I am poor becoz no-one will buy it from me!" :  Can anyone else see a problem with this picture?

HockeyFool's picture

0bammy and friends did so well with the economy and foreign policy we should still be persuing those failed policies? Fuck you, frozenassclown.

BaBaBouy's picture

Yes Donald... Who Needs Fair Trade, We Gats everything we need right here, We even have some healthcare here and there... Rah Rah Rah

What we NEED is More Billionaires and RICHER Billionaires ...!

Manthong's picture

 

He should take that attitude to the Pentagram first.

 

barndoor's picture

"Now, all that may be about to fall apart."

Get accustomed to this sentence.  You'll be hearing it a lot more in the medium term....

Oh regional Indian's picture

The death of the dollar is a long planned event.

Get used to becoming a Gulag, soon, even this year perhaps. Your money won't buy shit abroad anymore. There will be two dollars. Standard and eurodollar.

Flying in and out of the US will be a nightmare. All your two-wrists, in and out, wil dry up.

This is not just a trade move. This is a giant step in the planned destruction of the US of A.

Meanwhile, you can rah rah on so much winning.

MAGA....Making America the Greatest Ass...

 

froze25's picture

Screw Wall ST, traitors have made too much money off of offshoring our manufacturing base. Globalist Traitors.

Bes's picture

hahahahahahahahahhaah

hahahahahhahahahahhaa

you guys are fucking idiots.

america was great when we were EXPORTERS with the world.

not trade waring

this is going to end with us losing all over the fucking place.

except orange jesus' and your egos.

trade wars will lead to our isolation and/or even worse MOAR REAL WAR.

 

null's picture

Pssst, shhhhh ... hedge accordingly.

luky luke's picture

Trump is doing exactly what his Wall Street buddies want him to do: destroy America, by which they'll end up making a killing.

http://biblicisminstitute.wordpress.com/2014/08/05/israel-the-scourge-of...

macholatte's picture

 

According to Axios,

WTF?  Axios?
Why not just say this:
According to another fake news source...
According to another left wing website masquerading as a news outlet...
According to some Axios shit that is probably totally false but emotionally intriguing....
According to a great click bait source, Axios .....

 

null's picture

And you know this because of ... supernatural predestination?

Well, I obviously cannot argue with that. I mean, what could be more compelling.

Lea's picture

You guys are losing anyway. The dollar is less and less used as a world currency, which means the end of the US domination. So maybe it's better to do something instead of remaining frozen in an old pattern and drowning, while the rest of the world is rapidly changing.

It remains to be seen whether Trump's idea is the right thing to do, though.

Yog Soggoth's picture

Before 2008 I was talking to a captain of a barge headed from Tampa to Miami. They took the scrap metel to a big chinese carrier. So basically we gave them the raw product which was too expensive to deal with here, and sent it there only to have it sold back to us as a finished or downstream product. Why in the heck are we trading with a Communist country, and putting sanctions on Russia who should be our ally? Socialists get free labor and the two systems do not work together.  Put sanctions on China until they adopt a Republican form of government!

popeye's picture

China is not a communist country, it has a single party government. Do you understand? Try using your head instead of regurgitating the spittle of brainless media hacks who don't have a clue.

 

So scrap metal is sold to Chinese firms that reprocess, sell to manufacturers, who then sell finished goods to their markets domestic or international. In the 70's this was the Japan story, then it was Taiwan producing cheap products, then Korea.

 

You know what this is? Capitalism and the free market. And its a story that is hardly new, where an under-developed country with low cost of production trades its way towards a higher median standard of living (and concidentally higher costs of production). Next up: Vietnam & Indonesia. Then Africa (why do you think Africom exists?).

 

Pull your head out of your arse and take a fresh look at the world around you.

scintillator9's picture

Lord Ganesha has a way to remove obstacles, or place them in one's path.

My point being the best laid plans do not always go according to plan.

One, of all people, should know this.

 

joe90's picture

Death of dollar is inevitable, it technically died when Nixon removed its gold backing a, few years later after the "oil shortages" of the 70's it was then backed by the worlds resources predominantly oil, which "saved" it. So now it survives because the US runs a deficit so dollars can be exported (by the pallet load where necessary) to float around the world hoovering up resources (and drugs). So now it dies if either it stops being used by non-US countries to buy oil and resources OR exporting nations like Saudi run out of the will/incentive/coercion to buy US debt. It Inevitably dies only the timing is planned. So when you hear Trump saying things like "we are going to make them pay for their own defence" (can't remember who was talking about there), or actions like tariffs leading towards isolationism, he's either blissfully unaware of the role the US deficit plays in the world economy and thus the impact of such actions will lead to the death of the dollar or he's in on the plan for the timing of it.

TheReplacement's picture

If you are Trump and you understand the collapse is inevitable then you have a choice, do it and get it over with or extend and pretend.  If you are Trump and you understand that the era extending and pretending is ending then it is best to control the timing and get it done instead of having it happen in a fashion completely beyond your control.

Never let a crisis go to waste is a lot easier when you foresee the crisis.

Clearcutt's picture

Do it early in your term so you can manage the fix.

bonderøven-farm ass's picture

With all due respect, ORI.....

'MeriKa needs to get off it's collective ass and start producing shit again. As far as I can tell, our financed eKONomy has just about run it's course. Unless we rebuild our manufacturing base, we're toast when the Petro-$ dies.

Unless, of course, you're confortable with the current arrangement of globalisation/consolidation and swaping your resources and time for worthless nylon/cotton notes.

What gives?

nmewn's picture

At least we have finally broken down the argument so the average Joe can understand the difference between Free Trade and Fair Trade. 

There is a distinct difference. 

DaBears's picture

China is already in a trade war against US for decades, $350 billion trade surplus per year from US via protectionism as of today.

Déjà view's picture

Xi-riously...wishing upon him 8 sleepless years...

Rock that slow boat to China!

Also...IN KIND...slap a 10% import tariff of cars from €U...

Yog Soggoth's picture

Special trade deals for countries that break away from the EU. The Drachma could use a couple of zeros dropped and an increase in it's international credit rating. Trade wars do not have to be a bad thing when done right.

VZ58's picture

That would be a freaking awesome idea!

lucitanian's picture

No, Sorry the stupidity is mind boggling...

Why choose to fight in a market which is already globally over supplied when you know your heading for a recession?

Why provide temporary tariff protection to build capacity to produce a commodity already globally over produced?

Employment? Not the right answer answer, expected expansion of local demand, not really. So, where's the benefit?

...........  Global steel production    US Steel Prod.         China steel prod.
2000               850.1                      101.8                     128.5

2015             1620.4                       78.92                    803.83

(million metric tons) https://en.wikipedia.org/wiki/List_of_countries_by_steel_production

In short why choose to fight for a glutted global market experiencing a medium to longer term decline? And at the end of the day does the tariff protection hurt China or US consumers more as net prices continue to decline? Or does the US expect to be selling US steel to the One Belt One Road initiative by 2025? (because as the Dollar loose its status as global reserve currency it will need to export to earn Yuan, Yen, Euros, etc. to import.)

This guy's a business man?

Appointing a cabinet to keep your friends happy, then override their common sense to keep your less than clever supporters happy because your popularity is dropping; this guy is falling between two stools in the musical chairs. In MHO its because he has no vision or policy to make America great again, he's just riding a breaking populist wave, without much control and a lot of bullshit.

cougar_w's picture

Because optics. Trump is an attention whore.

swmnguy's picture

Because you're not doing what you say you're doing.  You're doing a bankruptcy and liquidation of the USA.  That's the only reason to have Wilbur Ross around.

GoingBig's picture

by far the best comment in a long time!

nmewn's picture

"No, Sorry the stupidity is mind boggling..."

So you are of the opinion this is only about steel...lol. America is China's largest "trading partner" at $388 BILLION, 18% of all its exports and it does so by printing the yuan and giving it to its "government sponsored enterprises" which is why one yuan is worth 15 US cents. 

Its second largest is its semi-autonomous "partner" Hong Kong...Yang ;-)

earleflorida's picture

enjoy this...George Carlin reality `blast from the past as in deje vu all over you!

http://www.informationclearinghouse.info/47349.htm

Billy the Poet's picture

The world has not yet chosen you as the arbiter of what constitutes fairness. What a rip off!

auricle's picture

Perfect!!!!!! Now kick the neocon warmongers to the curb. 

11b40's picture

Fair trade is what is being discussed. 'Free' trade, as we have now, must end before we are completely bled out.

wildbad's picture

its only language.

you want to MAGA, this step away from übernational corporate world dominance is essential.

things will get more expensive. like real paychecks for real work for real workers with real skills who put their money where their mouths are on the environment and real human tragedy.

if this is true, i am 100% behind my president on this one.

Stuck on Zero's picture

Trump starting a trade war???  WTF. We've been in a trade war for thirty years and have surrended on every battle front.

Arnold's picture

http://www.zerohedge.com/news/2015-12-23/trade-wars-begin-us-imposes-256...

"This means that suddenly China's steel exporters will have to scramble to find a comparably large market in which to sell their wares as now exporting to the US is prohibitively expensive and would result in massive losses to domestic producers. "

Tarrifs?

http://www.investopedia.com/ask/answers/040115/which-countries-have-high...

BurningFuld's picture

The US does not import steel from China. Read this report. Number one supplier is Canada. Us fucking socialists kicking ass again!

http://www.ita.doc.gov/steel/countries/pdfs/imports-us.pdf

Trump hates Canada.

Kayman's picture

Canada imports Chinese steel. And has put a tariff on Chinese rebar.  So Canada does behind the scenes what Trump does up front.

BTW- Chinese steel mills are the number one source of CO2 in the world.


Doom and Dust's picture

So has, and does, the EU.

Fucking hypocrites. Well at least they pay their Climate Indulgences to the church of ACC.

BurningFuld's picture

59% of Canada's steel imports come from the USA. 9% from China.

I'm sorry but I think the world needs more CO2 in it's atmosphere because it is what plants breath. 

Billy the Poet's picture

After a hard day at the plant those Canadian steel workers kick back and relax with their peanut butter dogs.

 

Most bestiality is legal, declares Canada's Supreme Court

 

http://www.independent.co.uk/news/world/americas/bestiality-legal-canada...

 

 

Stuck on Zero's picture

The new Oakland Bay Bridge was built with Chinese steel.