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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Arnold's picture

800 earthquakes recorded recently in the status quo.

Nearly constant tremors.

gregga777's picture

Nothing spells Fascism like Goldman Sachs And the Goldman Sachs Feral Reserve System. It's apparently a "tribal" thing.

shovelhead's picture

If Goldy hates it, then that's really all you need to know.

az_patriot's picture

Maybe he will, maybe he won't.  But this story has no sources.

thesonandheir's picture

Yes!

 

Go on Donald.

 

You must hit them on more than steel though if you really want to bring the Chinese down a peg or two. 

Rothbardian in Cleveland's picture

You understand this is a tax on US right?  On the spectrum of Chess vs. Checkers I'd have you somewhere between tic tac toe and connect 4.

wmbz's picture

"as his popularity sinks"

Says who? Some unknown reliable source.

Arnold's picture

The same one who leaked the meeting discussion.

Thom Paine's picture

I dont see his popularity being anything different than what would be normal.

And when you talk about popularity it is those rust belt and swings states that only matter.

Taking California and NYC into your figures is misleading.

lake's picture

American jobs were given away by a corrupt congress. This is how we get our jobs back, MAGA!

cheka's picture

they were traded away for access to foreign markets for nyc skype.  for every new bankster job we gave away 1,000 flyover jobs.  worth it

andrewp111's picture

Axios is not exactly the most reliable source.

new game's picture

about tyme. china has been econ enemy number one. takers. currency manipulators.

then in turn come here with their ill gotten gains and buy merica and drive up real estate.

also, they are chinese - not american. sorry it that is racial, but i am sick and tired of all these imports.

BigCumulusClouds's picture

Sorry. But a devalued currency doesn't boost exports. You and Donald are both brainwashed by the controlled media.

gespiri's picture

You must be a liberal arts major (if any).  Try reading a book on finance and macro-economics to enlighten yourself, no offense.

peopledontwanttruth's picture

From the same financial and economic geniuses who have brought the world to this as it's knees buckle?

These "genie"ius should be put back in the bottle

BigCumulusClouds's picture

You are the one who needs economic enlightenment. If a devalued currency improved exports, Venezuela would be outselling everybody in the oil market. But they're not. Their sales have dropped. Exports are commodities separate from the currency. They all operate independent of one another. For a non liberal arts major, you sure the fuck are stupid. And an arrogant fuckhead too. Asshole.

Relayer74's picture

Interesting that you would cite the Venezuela oil situation when it is obvious from your post alone that you understand it so poorly. Just to poke one little hole- look at the state of their oil infrastructure at this point. This infrastructure was originally put in place mainly by U.S. oil companies and later nationalised. By the time the turnover was complete you could already see the effects, output was declining. At this point we are looking at refineries with 100,000 BBL daily output capacities putting out a lowly 17,000 BBL/day. Mostly due to defferred maintenance alone.

IntTheLight's picture

In other words, when white men leave the scene, like in Rhodesia or Detroit or Puerto Rico, the cookie crumbles.

Flint comes to mind.

gespiri's picture

Calm down, Susan. You're getting all triggered up.

Where's your logic? Countries normally devalue their currency in order to compete with domestic prices in the country they're doing business in. Think China vs USA, which is why China pegged the Yuan at a lower fixed rate.  This is a simplified explanation. Ever wonder why the manufacturing sector in Switzerland is slowly going to Germany? Higher CHF vs EUR.

Venezuela is a poor example since that country's economy has been tampered with its elites and its current gov't is corrupt.

Not a bad explanation from an arrogant asshole, eh?  Go read a business book next time.

Ghordius's picture

a full trade war would weaken the US businesses that work on a "global franchise", I'd say

from Microsoft to Google to Uber to Coca-Cola to Disney to whatsoever, those are companies based in the US, relevant for the US and for the US Wall Street that operate in the whole world "as if it was their oyster"

(and never mind that they tend to dislike paying taxes in the US, or that they often preferred to transfer operations/plants to foreign, cheaper shores)

I still have some problems thinking that this or any other US Administration would really "go there"

gespiri's picture

It will actually bring/share over the long term the wealth back to the people by forcing local businesses to focus on domestic consumption.  Under the current model, other countries have sucked our manufacturing sector dry in the past 3 decades.

I always ask people, "Who's going to buy a company's products if people won't have the right jobs to afford 'em?"

Ghordius's picture

I think Ford (the man, not the company) would agree with you, on parts. he was reputed for increasing wages of his workers so that they would be able to buy the Ford Model T

but this... "Under the current model, other countries have sucked our manufacturing sector dry in the past 3 decades"

I don't know, weren't most of those decisions done in US management boards, by US CEOs? (and part of a trend, like BMW setting BMW plants in the US, for the US market?)

take Walmart. yes, responsible for the introduction of immense amounts of cheap Chinese goods in the US. but... still a US Company, with a US management board and a US CEO, isn't it?

profits. don't forget the profit motive. a corporation has an obligation to seek profits (regardless of many other criteria), under the "current model". Wall Street cares only about... there you have it

gespiri's picture

But we also have to mention that those decisions were done by management with the help of many of our politicians to make it easier for companies to move manufacturing to cheaper countries hidden under the blanket of trade treaties (think NAFTA). Before, government would make a big stink about a US company manufacturing products outside of the US (remember the backlash against non-American automobiles in the 70s). In the past 30 years, not one 'em blinked an eye after getting generous donations from these same businesses.

I believe, as someone mentioned it already on this thread (like the POTUS), fair trade instead of free trade is the key.  Trump is forcing everyone back to the negotiatiing table on this.

Savvy's picture

other countries have sucked our manufacturing sector dry

 

That's one way of looking at it. Another is, poverty is a commodity. US co.s have no compunctions about exploiting that and destroying US manufacturing to line their pockets short term. It isn't about nationality to multinationals, it's about profit and making Americans think their enemy is Jose or Wang Fu Chu is their MO.

peopledontwanttruth's picture

Short term--- All these economic discision were made with short term mentality for decades.

What's in it for me right NOW, I'll get mine as fast as I can and it doesn't matter because I'm looking out for myself and be set.

Arnold's picture

Clearly a negotiation point.
building leverage, not on margin.

slowimplosion's picture

You are kidding right?  China does NOT purchase software, they steal it.

Trade wars may be stupid but putting up with dumping and currency manipulation forever doesn't seem like much of a plan either.

Rothbardian in Cleveland's picture

How dare countries manipuate their currencies!  

 

Love,

The United States

7againstThebes's picture

Ghordius: “a full scale trade war would weaken American business.”

  Yes, I agree.

 But even so, a full scale trade war would be immensely beneficial to us, the American people.

 We Americans live in a dreamy world of hope and denial. What we demand of our politicians above all is that they not tell us the truth.   

 The more we are pummeled by depression, the more we are knocked out of our dream state, the more we are forced back upon ourselves, the better off we will be………in the long run…….           

az_patriot's picture

If it smells like fake news, looks like fake news, and walks like fake news....well, it just might be FAKE.  This isn't a "news" item, it has all the appearance of conjecture and cites no sources, except the usual anonymous/unnamed crap.  I hate the media.  It used to be that stories weren't published until they were verified -- now it's the other way around.  "Can't verify it?  Good!  Roll the presses!"

cheka's picture

indeed.  quite possible a b.s. story to placate the masses that still remember the campaign promise of tariff

cheech_wizard's picture

Consider the source - Axios

Axios is an American news and information website founded in 2016 by Politico co-founder Jim VandeHei, Politico's former Chief White House correspondent Mike Allen, and former Politico Chief Revenue Officer Roy Schwartz. The site's name, based on the Greek word for "worthy",

Standard Disclaimer: Yes, fake news.

NickPeeMe's picture

Looks Like Drumpf is bleeding from the Vagina or whatever this morning. Wow Sad. Maybe all you Trumptards should send him a card telling him how wonderful he is.  He loves hourly affirmation that he is wonderful.  Think of all has done for you. You got your mooslum ban and your about to take health care from 22 million poor folks. That should keep you retards regular if nothing else. You got your wall and Hillary is in jail, oh wait scratch the last two. apparently they are beyond his reach.

Savvy's picture

Trump's reach exceeds his grasp.

Arnold's picture

How do you handle paying yourself, Mr Brock?

Savvy's picture

Are you stupid? A man's reach SHOULD exceed his grasp.

Son of Captain Nemo's picture

Well at least I didn't get him wrong before Super Tuesday... Not only is he a "whore" add insane to the list!

Son of Captain Nemo's picture

Who ever thought that the President who championed downsizing our military footprint would do the opposite (https://www.rt.com/news/394784-china-protests-taiwan-arms/)along with this "trade war" narrative that will crush the life out of what is left of the American economy doing business with everybody else let alone expediting the death of the petrodollar.

gregga777's picture

F*** the CON Street Swindlers, Goldman Sachs and the 1% vigorously with a wire brush!

silverer's picture

Well, at least it's not the same old, same old. Hillary would have just kept busy selling out what's left of America and looting the taxpayers to fill her banks accounts. At least we have better entertainment for four years with Trump. Who knows? Something good might even come out of it.

WTFUD's picture

A similar overrule on current Foreign Policy of Intervention would get me back on board with the President.

NickPeeMe's picture

If it smells like Drumpf twat it probably is Drumpfs twat or maybe Hillary's twat same fucking thing anyways.

gespiri's picture

More name calling without any intelligent arguments.  Why are you even here?  You're wasting the oxygen of this world....

Arnold's picture

David Brock gets paid a substantial salary to gain our response.
Pizza, anyone?

NickPeeMe's picture

Pizza, whitewater, birthers, Russiagate, take your pick Trumptards as long as you stay distracted the owners of this fucking shithole country can keep picking your pockets.

NickPeeMe's picture

I come here for the propaganda and to make retards feel bad.

Thomas Paine's picture

Appears that the troll-tards here circle jerk in the same room of a DC basement complex...so original.  Pizza anyone?