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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anachronism's picture

I spent a few years in Japan during the 70s, doing postgraduate study on the Japanese economy. Let me tell you: high tariffs protected basic industry, as well as agriculture and consumer goods sectors. But, more than that, Japan became great at that time because there was the overriding belief in sharing the sacrifice and sharing the rewards.

Beyond Japan: The economic "miracles" in Taiwan, Korea, China were all based upon export to the USA while protecting the domestic businesses from imports.

For most Americans, our economic policies have been a slow-moving process of economic suicide. A uniform and universal tariff rate, imposed upon everything coming into this country from everywhere else, would regenerate the American economy and restore the American dream. A simple formula would be to tax finished goods at the maximum personal tax rate, and raw materials plus semi-finished goods at the maximum corporate tax rate. Businesses and "non-profit" organizations, who are importing workers, should be taxed an additional amount equivalent to the maximum personal income tax rate on the income of the imported workers.

I would expect that about half of those costs would be absorbed by businesses on their bottom line, and half would be passed on to the end-user. It would take a few years for the adjustment to complete; but the end result would be a greater distribution of income across the working population, less need for social welfare, a larger tax base for our government, and many more profitable businesses. The big global enterprises would still be profitable; but their profit margins would be lower.

man of Wool's picture

Donald is just showing off again. tweet tweet tweet.

flyonmywall's picture

Fuck yeah ! If his Wall St. advisers advised against it, that's exactly what he should do !

I love it ! Drain the swamp by cutting off the money flows ! Fucking brilliant !

You are totally right gespiri. Who the fuck is going to buy a company's products if they are getting paid minimum wage at fucking McDonalds? You gonna pay a mortgage on that, or on your Hope Deport isle stuffer job?

95% of the shit at Home Depot or Lowe's is fucking Made in China. You're telling me the USA can't make a fucking sledgehammer in the fucking country anymore? That's the result of Chinese and Indian steel dumping.

I went to Lowe's the other day, and there was ONE hammer made in the USA, and about 8 others Made in fucking China. The one from the USA was more expensive by 5 bucks or so. You know why? Because of steel dumping. It's a no brainer. 

I bought the one made in the USA. Fuck the Chinese.

 

Badwolf757's picture

Exactly went on a search for a USA manual can opener.  Found one producer in middle America.  You had to buy them from their website for $17 plus S&H.  Of course I had to buy it .  

nevertheless's picture

who pays you to write that drivel...

 

"Drain the swamp", you are aware the President picks his cabinet don't you? Chump is the man who filled his swamp with Wall Street filth, no one else. 

 

I assume anyone who writes this Chump guzzling crap are paid trolls, pushing a message that this is real, when anyone with a brain knows it's more fake news. 

 

If your not a paid troll, then you need to pull head out and get educated, Chump is a Isreal firster, and will do nothing that harms their priorities. 

 

 

TheLastTrump's picture

Hey DUMBFUCK, this guy is describing his experience. So, that makes him a paid troll?

 

You sound like you have a guilt complex. Does Brock sign your paycheck, bitch?

 

"95% of the shit at Home Depot or Lowe's is fucking Made in China. You're telling me the USA can't make a fucking sledgehammer in the fucking country anymore? That's the result of Chinese and Indian steel dumping.

I went to Lowe's the other day, and there was ONE hammer made in the USA, and about 8 others Made in fucking China. The one from the USA was more expensive by 5 bucks or so. You know why? Because of steel dumping. It's a no brainer. 

I bought the one made in the USA. Fuck the Chinese."

Rothbardian in Cleveland's picture

You realize that this will not make more US hammer makers nor the hammers that are being made in the US any cheaper.  Right?  Of course you don't.  

 

But hey, if sure feels good though.  Ignorance is bliss....All Hail Trump!

brushhog's picture

MMM, not true. Increased demand for hammers made in the USA will do what?....come on,think a little bit.....it will create a market for increased production, which will do what? ....come on, almost there........create a demand for US labor, which does what?.....come on, this is simple economics, you are almost there.......it will increase employment and WAGES. THERE YOU GO.

Who is against this? Manufacturers who employ people overseas, but sell to American consumers. In other words the GLOBALISTS...you know the people who have had their way here for the past 30 years and destroyed the American labor force and way of life? Yeah, those guys hate the idea.

wally_12's picture

Hammer heads are forgings. Environmental laws drove all of the small forging companies out of business or to a friendlier environment.

UmbilicalMosqueSweeper's picture

FRNs are forgings. (((Globalist))) wars create the "friendly" environments needed for their survival.

gespiri's picture

Fuckin' A, man.  I told my bosses one time that if they keep outsourcing, or "near shoring" jobs to cheaper countries, who's gonna keep buying your products?  You'll piss off your loyal customers which is your employees, and they will tell others not to buy your products out of spit.

Here's the kicker: once oil/gas prices start going up, shipping costs will go higher which will impact their bottom line.

Phillyguy's picture

Trump has no fundamental knowledge of economics or trade policy and seems to think that when things do not go his way, all he has to do is get on twitter and put out banal and contradictory statements.  The economic situation facing the US is a direct result of government and corporate policies going back to Reagan. These include: 1) multiple tax cuts for the wealthy, 2) job out-sourcing, 3) financial de-regulation, 4) taxpayer funded $ multi-trillion wars stretching from the Levant to Caspian Basin, Persian Gulf, China Sea, Indian Ocean, Horn of Africa, the Maghreb to Eastern Europe and Russian border. When Trump attacks Syria, there will likely be nuclear war with Russia. 5) 1-4 above gave rise to the 2008 financial collapse which has still not been resolved. Starting a trade war will only make things worse. I suggest the President go back and carefully study how protectionist economic policies in the 1920-30s helped create the Great Depression.

overmedicatedundersexed's picture

tell a lie and keep telling it, makes it true for this turd phillyguy

" carefully study how protectionist economic policies in the 1920-30s helped create the Great Depression."

just ignore the 1st of many effects of the newly created FED and the JU who ran it during that time..cause well trade was what done us in..

idiots - got schooled at some progessive school so your facts must be right, just like cnn..cause well we just know the facts..

trade wars hurt the elite and keep jobs in the country..but banksters hate em and do all they can to destroy the economy..NWO globalism is not new.

wally_12's picture

The Great Depression had many causes. WW1, the creation of the FED in 1913, the excesses of the Roaring Twenties. Bucket rooms were abundant in NYC to bet on anything someone who disagreed with your position. Interestingly, Congress retracted Bucket laws to allow Wall Street to engage in Derivatives.

Even Warren Buffet is afraid of Derivitives.

TheLastTrump's picture

You have no idea how America has been ripped off for decades.

 

Plus, you don't fucking care.

 

I'm glad Trump cares.

Badwolf757's picture

Newbie Here.  How will this punish the 1%?  Thanks. 

brushhog's picture

People who export borrowed fiat confetti and import real goods from other countries are getting rich by producing nothing.

NuYawkFrankie's picture

Trade War???

Pssst... Donny - careful now, don't upset the gravy-train!

The USSA has NOTHING to trade - not counting worthless FRNs.

Your buddies on Wall St - yeah, like those guys you got in your Cabinet like Cohen & Munchkin - exported all the manufacturing while they were bank-rolling you to run around in your casinos

nevertheless's picture

nothing but fake news for the masses...Chump will not do anything that will harm the rich, period. 

dirty fingernails's picture

We sell lots of expensive, questionably functional weapons! Buy your F-35 now and we promise to have it ready for 2 flight tests by 2025!

Crazed Smoker's picture

USA has the second largest manufacturing output in the world after China, which is impressive considering the USA has only had a fifth of China's population.  Manufacturing output is near all time historical highs, and specifically food oil production in the USA are at an all time highs.  Manufacturing jobs however have dramatically declined and will continue to do so in part due to productivity.

TheLastTrump's picture

You have no idea what you're talking about.

ronaldwilsonreagan's picture

Looks like the Lame Duck Drumpf has a case of whiskey dick this morning and he is lashing out as the 5 year old that he is.

the repeal of Obama care is a great idea. After the dems take over of the house and senate in 2018 we move foreword with Single payer  health like every other fucking country on the planet has. unfortunate for you fractional IQ retards it actually works very well. The rest of the planet is laughing at our third world medical system.

Stormtrooper's picture

Great idea.  I'm looking forward to YOU paying for my health insurance, being the "rich" American that you are.

Anteater's picture

Higher steel prices will drive a stake through Detroit, shut-in Houston fraacking oil, higher food tariffs will crush WalMart and Amazon Whole Foods profits, higher clothes price will finish off the malls and clear out  commercial real estate, we'll have a grand old time free-falling back to PE 11. Of course the Pentagon and Wall Street wins either way, they'll churn and burn all the way to DJIA 16,500, then Trump can add another 0 onto the National Debt for his Central Banker pals.

TabakLover's picture

The Black Swan............ he here.  Get short boyz.

c2nnib2l's picture

US steel will skyrocket

directaction's picture

Whatever Trump does to protect America some liberal judge will overrule him.

Except no liberal judge will ever overrule his crazy bombing of other countries.  

nevertheless's picture

oh shut up!

 

Chump can NOT start more wars in the Middle East and he CAN enforce America's borders and use ICE to crack down on illegal immigration, yet he has done just the opposite. Chump has started more wars in the Middle east and decreased illegal immigration enforcement. 

TheLastTrump's picture

you lie

 

I see every day that the local illegals are either GONE or IN HIDING

shrimpythai's picture

also hows about a .1% tax or something like that on EVERY wall street trade eh? whatever the small figure was but wall st is not paying any taxes on trading - am I right or not ? I think WS should be paying a tax on all the millions of trades done every day

 

jeez

 

Anteater's picture

$0.001 per trade would balance the National budget and crush the front-running nano-crashers, but affect Mom and Pop not at all, although it might increase the price of short bathrobes on the Nanex.

shadow54's picture

Trump did sign a buy American order that hasn't been much put in effect. Using it and tarriffs should help the USA even the playing field. It isn't just China, it is every nation. Why do you think Canadians are trembling and hoping Trump takes no action, it is because of the cosy deal they got out of NAFTA.

Tarriffs are a good way to tax American companies that outsource jobs to other nations. I would hardly call it a trade war.

null's picture

Great point!
Not trade war ... simply Proper allocation of costs. And for those who claim things will cost more, well, more proper allocation.

mastersnark's picture

There are still small pockets of middle class whites that haven't yet been destroyed from the existing trade arrangements, so we really shouldn't make any changes until they are finally finished off.

small axe's picture

free trade, free markets ...  LOL. Who decides when to slap on the "free" label? Those who benefit. And looking at the last couple decades of stagnate incomes and rising wealth inequality, it sure hasn't be me or anyone I know.

 

 

PodUK's picture

If this is true, and i've no reason to think it's not, why are the SP futures Green?

PodUK's picture

If this is true, and i've no reason to think it's not, why are the SP futures Green?

Ricki13th's picture

A. PPT buying stocks true dark pools

B. Markets is hoping its fake news.

C. All of the Above

My answer is ''C''...

urhotdogs's picture

 No lessons from history.  Hoover , a successful business man, imposed tariffs and look what that got us.  Labor unions, taxes and regulations have caused jobs to move elsewhere. Add to that, automation.  Tariffs are a tax on on the American citizen and will cause prices to rise.  In retaliation, other countries will impose tariffs on our products.  Farmers were hit bad in the 1930s.  So, the government will get to decide what companies to "protect".  Just what we need, more government interference

brushhog's picture

Unfortunately we can have unions, high taxes, and high regulations AND an open trade border. You have to have one or the other. We can never undo the regs, the taxes, or the unions in this country, at least not enough to compete with places like China.

We MUST have tariffs, high and across the board. Or we will continue on the path to being an unemployed nation. As it stand 43% of Americans cannot find gainful employment....its higher if you count the underemployed. Free trade is the tax, it has taxed our jobs out of existence. Cheap goods from china arent cheap if you dont have a job or an income.

TheLastTrump's picture

"Free trade is the tax"

 

great point

 

of course it hasn't been FAIR TRADE, which is what The Donald has been talking about

TheLastTrump's picture

In the 1930's every country had farms everywhere. Not so much now.

 

US farmers will do just fine. People have to eat. I doubt China wants to shut down soybean imports...

JB Say's picture

China doesn't buy American so how exactly will they retaliate. Trump is probably applying pressure on the Chicoms to do something serious about the Norks. His remark on their efforts to date sounded like sarcasm.

Bopper09's picture

Next on the agenda:  Executive Order 11110

My biggest question:  Who the fuck is buying American debt?  Obviously not China or Russia anymore.  The ESF funnelling all this through a black hole?  What a fucking farce this fraud of western fiat currency utilizing a ponzi market scheme.

God save us.  And I'll use his silver to do so.