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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OverTheHedge's picture

I've just starts  on Varoufakis' s New book, (https://www.amazon.com/Weak-Suffer-What-They-Must/dp/1568585047/ref=sr_1...), and he starts out with a potted history of post-war Europe, Bretton Woods Tec, all from the perspective of How the eu came about, and why. It's all interesting stuff, but it would seem that Japan and Germany were rebuilt specifically to be exporting powerhouses, to compliment the US export powerhouse, in order to reduce world reliance, and therefore exposure, to the US economy - a recession in a monopolist exporter would cripple the entire world. It all went swimmingly, until they, and then other countries, started out-exporting the US, and the US became a net importer. And that was why Bretton Woods fell apart.

According to Yanis, that is.

It's actually a good read, accessible and interesting. I haven't finished it yet, so no spoilers, please, but thus far it is entirely the fault of the US, Germany, France, and the UK, a bit. Yanis might have an axe to grind, but he does it well.

OverTheHedge's picture

And talking of History, here we are, back in the 1930s. Which country will be playing Germany this time around? Who will be forced by economic pressures to go to war to save itself? Russia would seem to be the obvious choice du jour, but China could be the one with the most to lose. Iran is irrelevant, but may be destroyed for MIC profit taking, a bit like the Sudan in 1920s Britain.

Don't we all live in interesting times?

shovelhead's picture

How did we afford it before China became a manufacturing hub?

There's a hundred answers to that question but the fact remains that we got along fine buying US made goods for 250 years.

HalinCA's picture

From behind tariff walls ... "free trade" was invented as a slogan in the late 1800s to justify intervention in China.

"Free trade" is always the cry from nations that have overbuilt their manufacturing sector using borrowed money.

It all is part on the banksters attemp to destroy national sovereignty.

earleflorida's picture

here's a little commentary by 'George Carlin' to refresh your memory[ies]?

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

enjoy

 

Kayman's picture

The US blew up China?  Get a fucking brain.  

American industry and the jobs that go with it, were sold out by rootless Globalist corporations and dirty, for sale, American politicians.  Do you think the Clinton's grew wealthy from creating jobs in America or China?  Fuck off.

Rothbardian in Cleveland's picture

Nope.  The Japs did.  Raped it actually.

 

My point, was and still is, that we were the only significant manufacuring base left after the war.

 

But hey, do whatever mental/linguistic gymnastics necessary in order to sustain your little pissed off enlightened tough guy schtick.

el buitre's picture

So we basically blow up the entire production capacity of the first world

Guess Germany is not in your "first world" because they didn't blow up their production capacity - far from it.  

SheHunter's picture

Real manufacturing will not come back to our towns.  Now it is who can produce the newest hype-diversion on their iPhone/Android.  Diversion and entertainment.  Not steel and concrete.

HockeyFool's picture

I'm up for trying anything at this point. Kick 'em in the balls, Trump.

Paul Kersey's picture

If Trump follows through on this, the three quarters of Americans, living from paycheck to paycheck, will now see their paychecks get smaller and their expenses grow larger. Interesting that Trump takes the advice of Wilbur Ross, a wealth-extractor who spent 24 years at the House of Rothschild. With Trump, no anthill goes unkicked.

HockeyFool's picture

Gosh, does anyone know who put those 3/4 of American living paycheck to paycheck in their current situation?

07564111's picture

Yes, Me ;)

That would be every retard american who votes for the left or the right.

your pic suites you.

peopledontwanttruth's picture

Whether free trade or isolationism either way the whole world has painted itself into a corner. There's no economy left. Just how much more crap can people buy. Supposedly we are at the pinnacle of technology yet everything breaks down in 3 years right after the worthless extended warranty. Yet decades ago the things made then many times still running and fixable by the average "un"mechanical person.

debtor of last resort's picture

Americans are made for debt, Chinese are made to produce. Both cannot accumulate wealth. This is the system.

Float and buy gold.

Thom Paine's picture

The globaral coporate entities decided they had no country, and wanted a globaly set minimum wage equilibrium.  

i.e. let the billions in India, China etc  labor compete with western labor for jobs. Eventually you get a minimum wages based on a multi billion people work force, which inevitably means western wages fall dramatically, and means that western standards of living must drop, whilst those in India, China etc rise until an equilbrium is reached.  Americans, 1st world countries should be saying, should have said, fuck them, we have the advantage and we are keeping it.

But the Global Corporates had the opposite ideas, and owned govt.

Tariffs formerly arteficially protected your standard of living, at the expense of 3rd and 2nd world countries. And thats life. dog eat dog.

MalteseFalcon's picture

The current regime of "Free" trade is subsidized by the American empire's petro-dollar.
If the petro-dollar is disappearing, then the trade regime and the empire are history.
Going forward trade can be based on purely economic reasons.

yogibear's picture

Trump needs to let the Libtard's Obamacare to implode.

He needs to be hands off  and then blame the democrats.

earleflorida's picture

it already has...

where ya been!

Sanity Bear's picture

> Idiot's protectionism is going to get us killed

* for certain values of "us"

GoldRulesPaperDrools's picture

Awww, poor booboo ... izzum vewy scawee?  GROW A PAIR FUCKNUTZ.

EOTS2's picture

Exactly. What the retards here who voted your comment down don't understand is that 'when goods can't cross borders, armies will'. Trade wars are fucking dangerous.

ZH has been taken over by economics ignoramuses. 

therealestg9's picture

I don't brlieve he's resisting Wall street in any way. This is all part of Goldman's strategy of realigning the position of the US in the world. These guys don't care about you, they realize that there is massive profit to be made in nationalism and protectionism and thus they are swarming like flies all over Trump's administration. This is going to be designed to give them more money, you can bet on it.

Endgame Napoleon's picture

Wow, this is one of the key reasons why we voted for BatMan Trump! Hmmm, I was afraid he was going to let the WS crowd reign supreme, but no, BatMan stood alone, or with the tiny 3% of Davids to fight the 97% Wall Streeter Goliath!

johnofRandI's picture

or the "poll results scam".  Axios "as his popularity continues to decline" still trying to convince us he's gonna lose the election. Yep, that scam continues.  It's subtle, passive and persistent.

Debt-Is-Not-Money's picture

Correct, Free-Trade is not free!

 

root superuser's picture

Peak oil is a scam? That would mean we can keep increasing use of oil, energy and other resources indefinitely. Cornucopians are the real scammers.

grasha87's picture

Jim Rickards has attacked free trade, along with Trump, in his new book The Road to Ruin. Here is why him and you are wrong:

 

https://bunky1787.wordpress.com/2017/06/04/jim-rickards-free-trade-a-bar...

 

cheka's picture

decades of results outweigh anyone's opinion.  free trade has been a disaster for flyover country.  a resounding success for nyc.dc

of course they propagandize us to keep their thing going.  do some history homework.  it's time to get back to the american system.  free trade has been exposed for the scam it is.

and btw, never refer to rickards....like a flashing 'idiot' sign on your forehead

el buitre's picture

Rickards is a CIA limited hang-out.  He pretty much admits it, even brags about it, in his interviews.  But I have to admire his slick delivery.  Watch his mouth - not his hands.  A typical stage magician.  He is pushing the SDR to replace the FRN as the WRC.  Because the bankers showed us in 2008 that if you strap enough CCC rated turds together, they magically become AAA :-)  Not.

Great Deceivah's picture

The Juden Globalist / Neoliberal (((Goldman Sachs))) scum must be shitting their pants right now...

Mr 9x19's picture

peak oil a scam ? lol.. you so fucking retard i won't spend any energy to explain to you what you are missing,.

 

go check your  coal  plants based strategy for your grid on your fucking soil and see how fucked you are. morron.

DocBerg's picture

Most of our trading partners have border adjusted Value Added Taxes.  Trump initially wanted to implement a border adjusted tax here, but was overruled by Wall Street.  Border adjusted VATs act just like tariffs, but for some reason Free Trade idealogues never seem to realize this.  Tariffs of the percentage that Trump is proposing will level the playing field, so this is going to cause Armageddon?

Arnold's picture

Okay, but mine is pretty boring and GAAP compliant.

Fisherman Blue's picture

Don't worry trunkate the SSN

PT's picture

Re "Post your tax return" :

He emailed it to Lois Lerner.

LoneStarHog's picture

I am trying this another route...While its ID is anonymous, it can be found...The info is being sent to the IRS who can easily determine if this character is paying its taxes or if its so-called "income" belongs on the grounds of the local stockyard.

JRobby's picture

Would you understand what you are looking at?

Do you understand what a multi-year tax strategy is?

Especially when the business is real estate? A LONG LIVED ASSET. Luxury real estate in a competetive, low interest rate environment? CONGRESS MAKES THE FUCKING RULES!!!!

Do you know jack shit about taxes? Because a tax return is a summary financial document. Do you want to see it all? All 1,000 plus pages of supporting schedules? Would you know what you were looking at? 

Doubtful.

johnofRandI's picture

If there was something wrong with tRump's tax return, there would be public records such as liens.  You think the Deep State skipped this guy's returns... didn't scrutinize the Donald???

JRobby's picture

You see how these cunt trolls skim through down voting any comment that addresses any reality.

Fiscal Smegma's picture

WHY you fucking IDIOT, what would it show??? MORON, tax returns are a ruse that a smart populace submits to it's corrupt govt.

Dumbass.

 

Blue Balls's picture

Hoover increased spending 47%

Raised taxes 25% to 63%

Smoot-Hawley tariff.

Fucking great.  /sarc

SheHunter's picture

Why?  What business is it of ours?  We all cheat where we can on our taxes.  Skip the self righteous BS.

realmoney2015's picture

Free trade is not the problem. Free markets work if actually given the chance. Fix the real problem Donald, end the fed!

LittleGreenMan's picture

The US markets are no where near free.  And it's not just the Fed.  The Financial Industry is corrupt  (e.g., Junk Mortgage-Backed Securities sold as AAA).  The SEC is corrupt (e.g., turns a blind eye to Market Manipulations like Naked Short Selling).  

No form of govt will work if the people "managing it" are corrupted.  And most of ours have been corrupted.

DRAIN THE SWAMP

LibertarianMenace's picture

The alien is right. Of course, since the aliens are running things, he/she/it would know.

 

LawsofPhysics's picture

Correct, power corrupts and absolute power corrupts absolutely...

realmoney2015's picture

Can't drain the swamp while the fed exists. The fed has its tentacles wrapped around every system, including political and financial. 

End the fed. Kill the beast