Thread: Trump ls laying groundwork for a new world order built around the US,China and Russia

Trump is laying groundwork for a new world order built around the US, China and Russia

PUBLISHED MON, JUL 1 2019 12:58 AM EDTUPDATED MON, JUL 1 2019 6:25 AM EDT

Dr. Michael Ivanovitch@MSIGLOBAL9

KEY POINTS

• Washington has begun a process with Russia and China during last week’s G-20 meeting in Osaka, Japan that could create a new world order.
• China would make a fateful mistake by refusing to grasp America’s olive branch.
• The world economy is now facing brighter prospects, even though the U.S. failed to force large trade surplus countries to drive an upswing of the global business cycle.

U.S. President Donald Trump and China’s President Xi Jinping shake hands before their bilateral meeting during the G-20 leaders summit in Osaka, Japan on June 29, 2019.
Kevin Lamarque | Reuters


President Donald Trump showed during last week’s Group of 20 meeting in Osaka, Japan what he meant by repeated off-the-cuff remarks that he wanted to build good relations with Russia and China.

He had an apparently friendly and wide-ranging discussion with Russia’s President Vladimir Putin on Friday. The two leaders agreed that American and Russian officials would continue their consultations about global and regional issues, and ways of improving and expanding bilateral political and economic ties.

That was followed Saturday by Trump’s meeting with China’s President Xi Jinping who — in a dig at the U.S. — extolled multilateralism and sharply criticized trade protectionism in his opening remarks to the G-20 plenary session. Xi reiterated those views by saying that he wanted cooperation rather than “friction and confrontation.”

Eventually, the Trump-Xi meeting ended up on a conciliatory note. Additional trade tariffs will be put to the side, and the two countries’ negotiating teams will pick up where they left off when trade talks were interrupted a month ago.

An olive branch to China
Ignoring complaints of American companies about discriminatory treatment in China, Xi also asked that the Chinese businesses should be treated fairly by U.S. authorities. Trump obliged by allowing American firms to sell technology to Chinese telecom giant Huawei in areas that were not critical to national security.

What does that all mean?

First and foremost, it signals the beginning of Trump’s firm focus on his reelection campaign, where a scuffle, or worse, with Russia and China would be a devastating event and leave him as a one-term player — even in the context of a rather uninspiring lineup of Democratic competitors.

Calming things down with two countries branded by Washington as strategic competitors hell-bent on undermining America’s world order is a priority — “for now,” as Trump likes to say.

And, as he also would say, “we shall see later,” presumably after his reelection.

Will that fly as a feasible election strategy? Yes it will, because, as said earlier, Trump correctly sees that picking a fight with Russia and China is an existential threat to humanity Americans and the rest of the world would not support.

So, Trump looks for peaceful and negotiated solutions with Russia in Syria, Ukraine and Venezuela, with a carrot for Moscow in opening up huge opportunities for American businesses eager to expand their operations in the country’s investment-starved enormous territories. In fact, the American business delegation was one of the largest at the recent economic forum in St. Petersburg, Russia.

Moscow’s allegedly key policy influence within the OPEC oil cartel is also seen as a precious help in holding energy prices down,and staying the Federal Reserve’s hand in hiking interest rates to forestall energy-driven inflation pressures.

Trump assist for Japan’s winner

Iran is another issue where Russia has a helpful hand.

That’s in sharp contrast with America’s closest allies — the United Kingdom, France and Germany — who not only publicly disagree with the U.S. on Iran, but also actively oppose Washington’s Iran sanctions and have established a special payment facility to do business with Tehran.
China is an entirely different problem. While Russia could be an irritant in some global issues and in managing Europe’s centuries-old hatreds, China is already a very credible challenge to American world order — seriously undermining Washington’s increasingly unstable trans-Atlantic and Asian alliances.

Some observers have already determined that Trump lost last week in his trade and security confrontation with China. That is a hasty, thoughtless and unworthy assessment.

It is true, however, that Trump’s trade armistice with China was dictated by his domestic considerations. It is also true that Trump appeared to be scaling back his ill-advised political overreach under the guise of his unassailable trade case against China.

The bottom line, again, for now, is that Trump will have to settle for China’s commitment to cut its American trade surpluses, but he definitely has to forget about interfering in China’s legislative process and economic policies – hot-button issues that China calls “issues of principle.”

Trump wasted two-and-a-half years and $1 trillion of American money (rising trade deficits with China) in pursuit of political objectives that he should have known China would never accept. Whoever pushed Trump in that direction deserves his signature “You’re fired!” scream.

But Japan’s Prime Minister Shinzo Abe deserves kudos. He is a winner and a happy man: Trump pushed China into his lap.

Abe, as a result, should be the first to thank Trump for making Japan’s impossible dream come true. Xi, who looked like he was holding his nose during years of photo ops with Abe, last week accepted an invitation to pay a state visit to Japan next spring.

Let’s see now how Trump manages Japan, its huge and systematic annual trade surpluses of about $70 billion on American trades, and Washington’s irrevocable obligation to unconditionally defend what is still called America’s key Asian ally.

Putting it all together and lifting the sights from here and now, Trump may have started a process of enduring world peace.

That concept is based on the idea that the U.S., Russia and China have been staring for years at an underlying security architecture of a uniquely binary choice: The end of humanity, or a new, hopefully American, world order built around those three key players whose economic and civilizational interests call for peaceful co-existence.

Investment thoughts

Trump has begun a process with Russia and China during last week’s G-20 meeting that could bring lasting peace and economic prosperity to the world.

His geopolitical moves may have been mainly motivated by his reelection strategy, but they have an enormous potential for creating a new world order based on the foundations enshrined in America’s inspired and written United Nations charter.

China would make a fateful mistake by refusing to grasp the olive branch offered by the U.S. last week. Triumphalist hints in Chinese official media don’t augur well, but let’s hope that a more realistic and constructive thinking will prevail.

The world economy is now facing brighter prospects, although the U.S. failed to force large and systematic trade surplus countries to drive an upswing of the global business cycle. As always, Washington will have to do the heavy lifting for those beggar-thy-neighbor countries — only to be perversely criticized for violating the multilateral trading system.

https://www.cnbc.com/2019/07/01/comm...na-russia.html

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