Trump declares national emergency over threats against US technology amid campaign against Huawei

President Donald Trump on Wednesday declared a national emergency over threats against American technology, the White House said.

The move, done via executive order, authorized the Commerce Secretary Wilbur Ross, in consultation with other top officials, to block transactions that involve information or communications technology that “poses an unacceptable risk to the national security of the United States.”

Following the order, the U.S. Department of Commerce announced the addition of Huawei Technologies and its affiliates to the Bureau of Industry and Security (BIS) Entity List, making it more difficult for the Chinese telecom giant to conduct business with U.S. companies.

The addition means that U.S. companies cannot sell or transfer technology to Huawei without a license issued by the BIS. That could make it harder for Huawei to do business, as it depends on some U.S. suppliers for parts.

President Donald Trump backed the decision, which will “prevent American technology from being used by foreign owned entities in ways that potentially undermine U.S. national security or foreign policy interests,” Commerce Secretary Wilbur Ross said in a statement.

The announcement has been under discussion for a year. It comes as the U.S and China remain locked in a trade dispute and could escalate tensions between the world’s two largest economies.

The order had been opposed by small rural carriers, who continued to rely on Huawei equipment even after it was largely dropped by the larger telecommunications companies.

In a statement, White House press secretary Sarah Huckabee Sanders wrote that the administration will “protect America from foreign adversaries who are actively and increasingly creating and exploiting vulnerabilities in information and communications technology infrastructure and services in the United States.”

The Trump administration has pushed allies around the world not to adopt the company’s next generation 5G network technology, which American officials have warned could be used for spying by the Chinese. Those efforts have had mixed results in Europe, where several countries declined to stop doing business with the company.

Huawei has forcefully denied allegations that it is not independent from the Chinese government.

In recent months, the U.S. has taken a number of steps against the firm.

In January, the Department of Justice announced a slew of charges against two units of the company, including for stealing trade secrets from T-Mobile USA. And both Huawei and ZTE, another Chinese technology firm, were barred from most U.S. government contract work by the 2019 Defense Authorization Act.

In December, Canadian authorities arrested Huawei CFO Meng Wanzhou to serve an extradition request from the U.S. government, which has alleged that the company defrauded several banks by concealing payments from Iran in violation of sanctions against that country.

Huawei did not immediately respond to a request for comment on the executive order. Earlier Wednesday, David Wang, an executive at the company, told The Wall Street Journal that such an order would be misguided.

[NBC News]

Trump brags about his China trade war ‘success’ as stock ticker shows market tanking

President Donald Trump on Monday boasted about how successful his trade war with China has been — even though stock markets took an absolute beating on the news that China was about to slap tariffs on $60 billion of American goods.

While giving remarks to White House reporters on Monday, Trump bragged that his tariffs were making the United States richer, while a stock-market ticker showed that the Dow Jones Industrial Average was falling by more than 600 points.

“We’re taking in right now hundreds of billions of dollars,” Trump said of his tariffs on Chinese goods. “We’re taking in billions of dollars of tariffs, and those tariffs are going to be tremendously, if you look at what we’ve done thus far with China, we’ve never taken in ten cents until I got elected, now we’re taking in billions of billions.”

Trump also falsely credited the tariffs for economic growth in the first quarter of 2019, even though the majority of economists say the tariffs had nothing to do with strong GDP growth.

“This is a very positive step,” Trump said as the stock ticker continued showing a bloodbath in the markets. “I love the position we’re in.”

[Raw Story]

Trump doubles down on China tariffs, saying there is ‘no reason’ for US consumers to pay them

President Trump on Monday argued in a series of tweets that China will bear the brunt of the new tariffs his administration is imposing on the country, a day after one of his top economic advisers said both the U.S. and China would be hurt by the economic fight.

Trump wrote in the tweets that there was no “reason” for U.S. consumers to pay the tariffs, arguing in part that people in the United States could avoid paying the tariffs by buying products produced in other countries or in the United States.

“Their is no reason for the U.S. Consumer to pay the Tariffs, which take effect on China today,” Trump wrote in one of the posts on Twitter.

In a second tweet, he said a consumer could “buy the product inside the USA (the best idea).”

He said companies would leave China for other countries, such as Vietnam, to avoid the tariffs.

https://twitter.com/realDonaldTrump/status/1127886307118678016?ref_src=twsrc%5Etfw
https://twitter.com/realDonaldTrump/status/1127886307995336705?ref_src=twsrc%5Etfw

Trump’s comments come just a day after his top economic adviser, Larry Kudlow, in an interview on “Fox News Sunday” said both China and U.S. consumers would be hurt by the tariffs.

“In fact, both sides will pay in these things, and of course it depends,” Kudlow responded after host Chris Wallace pressed him on how importers of Chinese products hit by tariffs will pay those tariffs.

Most economists agree that the costs of the tariffs will be paid by U.S. consumers in the form of higher prices on imported products from China.

Kudlow did say that China would suffer, too, from the fight, saying they would be hit by gross domestic product losses and a diminishing export market.

The Trump administration announced it would hike tariffs on $200 billion in Chinese products on Friday. Tariffs that were 10 percent are jumping to 25 percent. 

It’s unclear how easy it would be for U.S. consumers to avoid higher prices coming because of the tariffs. It’s also not clear yet how prices will be effected, since the tariffs only went into effect on Chinese products leaving China on Friday.

[The Hill]

Trump announces second round of farm aid to offset trade damage

President Trump on Monday announced his administration was planning to disburse a second tranche of aid as part of a $12 billion package meant to assist American farmers stung by retaliatory trade measures enacted by China and other foreign governments.

“Today I am making good on my promise to defend our Farmers & Ranchers from unjustified trade retaliation by foreign nations,” Trump tweeted. “I have authorized Secretary Perdue to implement the 2nd round of Market Facilitation Payments. Our economy is stronger than ever–we stand with our Farmers!”

After this latest round of payments, farmers will have received about $9.6 billion in aid, according to Department of Agriculture figures. The largest payments will be for soybeans.

Agriculture Secretary Sonny Perdue said in a statement Monday that farmers “are continuing to experience losses due to unjustified trade retaliation.”

“This assistance will help with short-term cash flow issues as we move into the new year,” he added.

The Trump administration announced in July it was dispersing $12 billion in aid to farmers amid escalating trade disputes with China, Mexico, Canada and the European Union. The administration said it would dole out the first $6 billion in August.

Reuters reported earlier this month that the second portion of aid had been delayed by the administration.

The $6 billion that was dispersed in August included about $4.7 billion to producers of corn, cotton, dairy, pork, sorghum, soybeans, and wheat.

Perdue said in a statement at the time that “all of this could go away tomorrow, if China and the other nations simply correct their behavior.”

“But in the meantime, the programs we are announcing today buys time for the President to strike long-lasting trade deals to benefit our entire economy,” he said.

Trump has engaged in an escalating trade war with China that has hurt farmers in the U.S. who rely on China for exports.

The second portion of aid announced Monday was initially delayed because the Trump administration was worried about the cost of the program and was hopeful that China would resume buying soybeans from the U.S., according to Reuters.

[The Hill]

Stock markets plunge after Trump’s ‘Tariff Man’ tweet

Stocks took a nosedive on Wall Street as investors worried that a US-China trade truce reached over the weekend wasn’t all it was cracked up to be.

The Dow Jones Industrial Average sank almost 800 points Tuesday.

Boeing and Caterpillar, two major exporters which would have much to lose if trade tensions don’t ease, weighed the most on the Dow.

Bond prices soared sharply, sending yields lower, as traders shoved money into lower-risk investments.

The sharp drop in yields hurt banks because it makes it harder to earn money from lending. JPMorgan Chase sank 4.5 percent.

The S&P 500 lost 90 points, or 3.2 percent, to 2,700.

The Dow dropped 799 points, or 3.1 percent, to 25,027. The Nasdaq fell 283 points, or 3.8 percent, to 7,158.

The markets plunged after President Donald Trump unleashed a threatening tweet Tuesday morning.

“President Xi and I want this deal to happen, and it probably will. But if not remember, I am a Tariff Man,” Trump tweeted.

[New York Post]

When Trump Phones Friends, the Chinese Listen and Learn

When President Trump calls old friends on one of his iPhones to gossip, gripe or solicit their latest take on how he is doing, American intelligence reports indicate that Chinese spies are often listening — and putting to use invaluable insights into how to best work the president and affect administration policy, current and former American officials said.

Mr. Trump’s aides have repeatedly warned him that his cellphone calls are not secure, and they have told him that Russian spies are routinely eavesdropping on the calls, as well. But aides say the voluble president, who has been pressured into using his secure White House landline more often these days, has still refused to give up his iPhones. White House officials say they can only hope he refrains from discussing classified information when he is on them.

Mr. Trump’s use of his iPhones was detailed by several current and former officials, who spoke on the condition of anonymity so they could discuss classified intelligence and sensitive security arrangements. The officials said they were doing so not to undermine Mr. Trump, but out of frustration with what they considered the president’s casual approach to electronic security.

American spy agencies, the officials said, had learned that China and Russia were eavesdropping on the president’s cellphone calls from human sources inside foreign governments and intercepting communications between foreign officials.

The officials said they have also determined that China is seeking to use what it is learning from the calls — how Mr. Trump thinks, what arguments tend to sway him and to whom he is inclined to listen — to keep a trade war with the United States from escalating further. In what amounts to a marriage of lobbying and espionage, the Chinese have pieced together a list of the people with whom Mr. Trump regularly speaks in hopes of using them to influence the president, the officials said.

Among those on the list are Stephen A. Schwarzman, the Blackstone Group chief executive who has endowed a master’s program at Tsinghua University in Beijing, and Steve Wynn, the former Las Vegas casino magnate who used to own a lucrative property in Macau.

The Chinese have identified friends of both men and others among the president’s regulars, and are now relying on Chinese businessmen and others with ties to Beijing to feed arguments to the friends of the Trump friends. The strategy is that those people will pass on what they are hearing, and that Beijing’s views will eventually be delivered to the president by trusted voices, the officials said. They added that the Trump friends were most likely unaware of any Chinese effort.

L. Lin Wood, a lawyer for Mr. Wynn, said his client was retired and had no comment. A spokeswoman for Blackstone, Christine Anderson, declined to comment on Chinese efforts to influence Mr. Schwarzman but said that he “has been happy to serve as an intermediary on certain critical matters between the two countries at the request of both heads of state.”

Russia is not believed to be running as sophisticated an influence effort as China because of Mr. Trump’s apparent affinity for President Vladimir V. Putin, a former official said.

China’s effort is a 21st-century version of what officials there have been doing for many decades, which is trying to influence American leaders by cultivating an informal network of prominent businesspeople and academics who can be sold on ideas and policy prescriptions and then carry them to the White House. The difference now is that China, through its eavesdropping on Mr. Trump’s calls, has a far clearer idea of who carries the most influence with the president, and what arguments tend to work.

The Chinese and the Russians “would look for any little thing — how easily was he talked out of something, what was the argument that was used,” said John Sipher, a 28-year veteran of the Central Intelligence Agency who served in Moscow in the 1990s and later ran the agency’s Russia program.

Trump friends like Mr. Schwarzman, who figured prominently in the first meeting between President Xi Jinping of China and Mr. Trump at Mar-a-Lago, the president’s Florida resort, already hold pro-China and pro-trade views, and thus are ideal targets in the eyes of the Chinese, the officials said. Targeting the friends of Mr. Schwarzman and Mr. Wynn can reinforce the views of the two, the officials said. The friends are also most likely to be more accessible.

One official said the Chinese were pushing for the friends to persuade Mr. Trump to sit down with Mr. Xi as often as possible. The Chinese, the official said, correctly perceive that Mr. Trump places tremendous value on personal relationships, and that one-on-one meetings yield breakthroughs far more often than regular contacts between Chinese and American officials.

Whether the friends can stop Mr. Trump from pursuing a trade war with China is another question.

Officials said the president has two official iPhones that have been altered by the National Security Agency to limit their capabilities — and vulnerabilities — and a third personal phone that is no different from hundreds of millions of iPhones in use around the world. Mr. Trump keeps the personal phone, White House officials said, because unlike his other two phones, he can store his contacts in it.

Apple declined to comment on the president’s iPhones. None of them are completely secure and are vulnerable to hackers who could remotely break into the phones themselves.

But the calls made from the phones are intercepted as they travel through the cell towers, cables and switches that make up national and international cellphone networks. Calls made from any cellphone — iPhone, Android, an old-school Samsung flip phone — are vulnerable.

The issue of secure communications is fraught for Mr. Trump. As a presidential candidate, he regularly attacked his Democratic opponent, Hillary Clinton, during the 2016 campaign for her use of an unsecured email server while she was secretary state, and he basked in chants of “lock her up” at his rallies.

Intercepting calls is a relatively easy skill for governments. American intelligence agencies consider it an essential tool of spycraft, and they routinely try to tap the phones of important foreign leaders. In a diplomatic blowup during the Obama administration, documents leaked by Edward J. Snowden, a former contractor for the National Security Agency, showed that the American government had tapped the phone of Chancellor Angela Merkel of Germany.

Foreign governments are well aware of the risk, and so leaders like Mr. Xi and Mr. Putin avoid using cellphones when possible.

President Barack Obama was careful with cellphones, too. He used an iPhone in his second term, but it could not make calls and could receive email only from a special address that was given to a select group of staff members and intimates. It had no camera or microphone and could not be used to download apps at will. Texting was forbidden because there was no way to collect and store the messages, as required by the Presidential Records Act.

“It is a great phone, state of the art, but it doesn’t take pictures, you can’t text. The phone doesn’t work, you know, you can’t play your music on it,” Mr. Obama said on “The Tonight Show Starring Jimmy Fallon” in June 2016. “So basically, it’s like — does your 3-year-old have one of those play phones?”

When Mr. Obama needed a cellphone, the officials said, he used one of those of his aides.
Mr. Trump has insisted on more capable devices, although he did agree during the transition to give up his Android phone (the Google operating system is considered more vulnerable than Apple’s). And since becoming president, Mr. Trump has agreed to a slightly cumbersome arrangement of having two official phones: one for Twitter and other apps, and one for calls.

Mr. Trump typically relies on his mobile phones when he does not want a call going through the White House switchboard and logged for senior aides to see, his aides said. Many of those Mr. Trump speaks with most often on one of his cellphones, such as hosts at Fox News, share the president’s political views, or simply enable his sense of grievance about any number of subjects.

Administration officials said Mr. Trump’s longtime paranoia about surveillance — well before coming to the White House he believed his phone conversations were often being recorded — gave them some comfort that he was not disclosing classified information on the calls.

They said they had further confidence he was not spilling secrets because he rarely digs into the details of the intelligence he is shown and is not well versed in the operational specifics of military or covert activities.

In an interview this week with The Wall Street Journal, Mr. Trump quipped about his phones being insecure. When asked what American officials in Turkey had learned about the killing of the journalist Jamal Khashoggi in the Saudi consulate in Istanbul, he replied, “I actually said don’t give it to me on the phone. I don’t want it on the phone. As good as these phones are supposed to be.”

But Mr. Trump is also famously indiscreet. In a May 2017 meeting in the Oval Office with Russian officials, he shared highly sensitive intelligence passed to the United States by Israel. He also told the Russians that James B. Comey, the former F.B.I. director, was “a real nut job” and that firing him had relieved “great pressure.”

Still, Mr. Trump’s lack of tech savvy has alleviated some other security concerns. He does not use email, so the risk of a phishing attack like those used by Russian intelligence to gain access to Democratic Party emails is close to nil. The same goes for texts, which are disabled on his official phones.

His Twitter phone can connect to the internet only over a Wi-Fi connection, and he rarely, if ever, has access to unsecured wireless networks, officials said. But the security of the device ultimately depends on the user, and protecting the president’s phones has sometimes proved difficult.

Last year, Mr. Trump’s cellphone was left behind in a golf cart at his club in Bedminster, N.J., causing a scramble to locate it, according to two people familiar with what took place.

Mr. Trump is supposed to swap out his two official phones every 30 days for new ones but rarely does, bristling at the inconvenience. White House staff members are supposed to set up the new phones exactly like the old ones, but the new iPhones cannot be restored from backups of his old phones, because doing so would transfer over any malware.

New phone or old, though, the Chinese and the Russians are listening, and learning.

[The New York Times]

Trump says US is ending decades-old nuclear arms treaty with Russia

President Donald Trump announced Saturday that the US is pulling out of the landmark Intermediate-Range Nuclear Forces Treaty with Russia, a decades-old agreement that has drawn the ire of the President.

“Russia has violated the agreement. They’ve been violating it for many years,” Trump told reporters before boarding Air Force One to leave Nevada following a campaign rally.

“And I don’t know why President Obama didn’t negotiate or pull out. And we’re not going to let them violate a nuclear agreement and go out and do weapons and we’re not allowed to,” he said. “We’re the ones that have stayed in the agreement and we’ve honored the agreement.

“But Russia has not, unfortunately, honored the agreement. So we’re going to terminate the agreement. We’re gonna pull out,” he said of the agreement, which was signed in December 1987 by former President Ronald Reagan and former USSR President Mikhail Gorbachev.

Following the announcement, Russia’s state-run news agency, RIA Novosti, reported that Russian President Vladimir Putin plans to discuss the decision with US national security adviser John Bolton when he visits Russia this week.

According to the report, the Kremlin’s spokesman, Dmitry Peskov, said, “It’s likely that an explanation from the US will be required following the latest scandalous statements.”

What is the Intermediate-Range Nuclear Forces Treaty?

The treaty forced both countries to eliminate ground-launched ballistic and cruise missiles with ranges between approximately 300 and 3,400 miles. It offered a blanket of protection to the United States’ European allies and marked a watershed agreement between two nations at the center of the arms race during the Cold War.

Former State Department spokesman Rear Adm. John Kirby, a CNN military and diplomatic analyst, explained that the treaty “wasn’t designed to solve all of our problems with the Soviet Union,” but was “designed to provide a measure of some strategic stability on the continent of Europe.”

“I suspect our European allies right now are none too happy about hearing that President Trump intends to pull out of it,” he said.

Why leave the agreement now?

The Trump Administration has said repeatedlythat Russia has violated the treaty and has pointed to their predecessors in the Obama administration who accused Russia of violating the terms of the agreement.

In 2014, CNN reported that the US had accused Russia of violating the INF Treaty, citing cruise missile tests that dated to 2008. CNN reported in 2014 that the United States at the time informed its NATO allies of Russia’s suspected breach.

However, it wasn’t until recently that NATO officially confirmed Russia’s activity constituted a likely violation.

NATO Secretary General Jens Stoltenberg said earlier this month that the military alliance remained “concerned about Russia’s lack of respect for its international commitments, including the Intermediate-Range Nuclear Forces Treaty, the INF Treaty.”

“This treaty abolishes a whole category of weapons and is a crucial element of our security,” Stoltenberg said, speaking at a defense ministers’ meeting. “Now this treaty is in danger because of Russia’s actions.”

He continued, “After years of denials, Russia recently acknowledged the existence of a new missile system, called 9M729. Russia has not provided any credible answers on this new missile. All allies agree that the most plausible assessment would be that Russia is in violation of the treaty. It is therefore urgent that Russia addresses these concerns in a substantial and transparent manner.”

Moscow’s failure to adhere to the agreement was also addressed in the most recent Nuclear Posture Review published by the Defense Department in February, which said Russia “continues to violate a series of arms control treaties and commitments.”

“In a broader context, Russia is either rejecting or avoiding its obligations and commitments under numerous agreements and has rebuffed U.S. efforts to follow the New Strategic Arms Reduction Treaty (START) with another round of negotiated reductions and to pursue reductions in non-strategic nuclear forces.”

What does this mean for US security?

Pulling out of the treaty could provoke a similar arms race across Europe akin to the one that was occurring when the agreement was initially signed in the 1980s.

“I don’t think we’re at the stage right now that if we pull out of the INF Treaty, you’ve got to go sort of build a bunker in your backyard,” Kirby said.

“I don’t think we’re at that stage at all,” he said. “But I do think, if we pull out, we really do need to think about how we are going to, right now because we don’t have the same capability as the Russians have with this particular missile. How are we going to try and counter that? How are we going to try and help deter use of it on the continent of Europe?”

How does China work in all of this?

Administration officials believe the treaty has put the US at a disadvantage because China does not face any constraints on developing intermediate-range nuclear missiles in the Pacific and it does not allow the US to develop new weapons.

Trump, speaking with reporters on Saturday, referenced China when explaining his reasoning for pulling out of the agreement.

“Unless Russia comes to us and China comes to us and they all come to us and say, ‘Let’s really get smart and let’s none of us develop those weapons.’ But if Russia’s doing it and if China’s doing it and we’re adhering to the agreement, that’s unacceptable,” Trump said.

In 2017, the head of US Pacific Command, Adm. Harry Harris, told Congress that approximately 95% of China’s missile force would violate the INF Treaty if they were part of the agreement.

“This fact is significant because the U.S. has no comparable capability due to our adherence to the Intermediate Range Nuclear Forces (INF) Treaty with Russia,” Harris said in a statement to the Senate Armed Services Committee.

National security adviser John Bolton is expected to discuss the treaty with Russian officials on his trip to Moscow next week.

Kirby said he thinks the Russians will be OK with the decision.

“This gives Putin an excuse to just continue doing what he’s doing, only doing it more blatantly,” Kirby said.

Outspoken Russian senator Alexey Pushkov tweeted Sunday that the “United States is bringing the world back to the Cold War” in reaction to Trump’s decision, which he called a “massive blow to the entire system of strategic stability in the world.”

Senior Russian lawmaker Konstantin Kosachev warned on his Facebook page that “the consequences would be truly catastrophic.” However, he said it’s not official that the US has pulled out of the INF, saying “it’s still possible to consider Trump’s statement as continuous blackmail rather than a completed legal act.”

[CNN]

Trump On Trade Wars With China, U.S. Allies: ‘We’ve Been the Stupid Country for So Many Years’

During his broad-ranging interview with 60 Minutes, President Trump said America has been a “stupid country” in the past, while also defending his approach to international economics and foreign policy.

Lesley Stahl pressed Trump on his escalating trade wars with China and their retaliation across multiple markets. Trump disputed her “trade war” characterization and that eventually led to a chat on the Trump Administration’s tariffs against American allies.

“I mean, what’s an ally?” Trump said. “We have wonderful relationships with a lot of people. But nobody treats us much worse than the European Union.”

Stahl continued to ask about this “hostile” approach, and whether Trump would consider dissolving the western alliance under NATO.

“We’ve been the stupid country for so many years,” Trump said. “We shouldn’t be paying almost the entire cost of NATO to protect Europe, and then on top of that, they take advantage of us on trade.”

[Mediaite]

Trump: Now Ford can build Focus in U.S.; Ford: That makes no sense

Auto analysts groaned on Sunday in response to tweets sent by President Trump that touted his tariffs on Chinese imports and his claim that the trade war would inspire Ford Motor Co. to build its Ford Active crossover in the U.S. rather than overseas.

Wrong, Ford said.

The Dearborn-based company issued a statement in response to the president’s tweet:

“It would not be profitable to build the Focus Active in the U.S. given an expected annual sales volume of fewer than 50,000 units and its competitive segment. Ford is proud to employ more U.S. hourly workers and build more vehicles in the U.S. than any other automaker.”

Jon Gabrielsen, a market economist who advises automakers and auto suppliers, said, “This is further evidence that neither the president nor his trade representatives have any clue of the complexities of global supply chains.”

A trade war actually hurts one of America’s most iconic companies, Gabrielsen said. “This forces Ford to forfeit the sales they would have had if they could continue to import that low-volume niche vehicle.”

Ford on Aug. 31 canceled plans to import the Focus Active crossover from China to the United States because of costs from the escalating trade war.

“Given the negative financial impact of the new tariffs, we’ve decided to not import this vehicle from China,” Kumar Galhotra, president of Ford North America, told reporters.

The Focus Active was meant to take the place of the Ford Focus in the U.S. because Ford is phasing out the entry-level car as it shifts its production to pickups and SUVs. Focus Active was scheduled to go on sale in the late summer of 2019.

“Basically, this boils down to how we deploy our resources. Any program that we’re working on requires resources — engineering resources, capital resources,” Galhotra said. “Our resources could be better deployed at this stage.”

Tariffs imposed by President Donald Trump on Chinese products and the threat of more had a direct impact on the Aug. 31 decision, according to Ford officials. The United States already has imposed tariffs on steel and aluminum from China and, as of July, put a 25 percent tax on autos imported from China.

“Ford was pretty clear in its statement: Focus production will not shift in part or in whole back to the U.S.,” said Stephanie Brinley, a senior analyst at London-based IHS Markit.

Trump didn’t tweet about the Ford announcement at the time. On Sunday, he quoted the CNBC TV network and tweeted, “‘Ford has abruptly killed a plan to sell a Chinese-made small vehicle in the U.S. because of the prospect of higher U.S. Tariffs.'” CNBC. This is just the beginning. This car can now be BUILT IN THE U.S.A. and Ford will pay no tariffs.”

“Ford is one of the companies that has the highest U.S. content and the most U.S. autoworkers of any company,” said Kristin Dziczek, vice president of the Industry, Labor & Economics Group at the Center for Automotive Research in Ann Arbor.

“You know, their statement was very clear. It’s too costly to build that car here and they weren’t planning to. They don’t make business decisions based on tweets. They make decisions based on whether there’s a demand here for the vehicle and if it can be done profitably. Demand for small cars is waning, so they thought they would build some for the rest of the world and bring a few for folks here who want one,” Dziczek said.

Building the car may still be the plan, but not in the U.S., she emphasized, along with other analysts. At issue is finding low-wage production sites to maintain profit margins, and that doesn’t include the U.S. or Canada.

“This trade thing turns into Whac-A-Mole,” Dziczek said. “You can shut off China and things will come from India, Thailand, Taiwan, Poland, Slovenia. There are loads of low-cost countries for parts and vehicles.”

After touting his tariff plan, the president also cited tariff data that alarmed analysts.

“If the U.S. sells a car into China, there is a tax of 25%. If China sells a car into the U.S., there is a tax of 2%. Does anybody think that is FAIR? The days of the U.S. being ripped-off by other nations is OVER!”

Wrong again, Dziczek said. “China lowered the tariff rate from 25 percent to 15 percent for most-favored nation status — which is offered to World Trade Organization members — but raised it to 40 percent for the U.S. in retaliation to the tariffs we put on Chinese goods.”

She continued, “And the tariffs we charge for goods coming into the U.S. is 2.5 percent, not 2 percent. And then we put an additional 25 percent on cars coming from China into the U.S. So now they’re paying 27.5 percent. This is why Ford had to re-evaluate.”

American automakers ship about 250,000 vehicles a year from the U.S. to China, while China ships about 50,000 vehicles to the U.S. annually, Dziczek noted.

For example, every Buick Envision sold in the U.S. is made in China. General Motors has petitioned that the car be excluded from tariffs on Chinese-built products.

Ford spokesman Mark Truby emphasized Sunday that the company plans to build many new vehicles in America. “For example, we are starting production soon of the Ford Ranger in the factory just outside of Detroit where the Focus was previously built. We’re not defensive about building in America. Nobody does more than us. We also have to make a business case that works.”

[Detroit Free Press]

Trump: ‘No reason’ for Korea war games right now

President Trump on Wednesday said there was “no reason” for joint U.S.-South Korea military exercises at the moment, citing ongoing discussions over North Korea’s nuclear program.

“The President believes that his relationship with Kim Jong Un is a very good and warm one, and there is no reason at this time to be spending large amounts of money on joint U.S.-South Korea war games,” the White House said in a statement that Trump himself issued on Twitter.

“Besides, the President can instantly start the joint exercises again with South Korea, and Japan, if he so chooses,” the statement added.

The Trump administration statement came one day after Defense Secretary James Mattis said there were no plans to suspend future military exercisesbetween the U.S. and South Korea.

Mattis later clarified, however, that there has been “no decision” about suspending more exercises following the three that were cancelled after Trump’s summit with North Korean leader Kim Jong Un earlier this year.

“Our military posture has not changed since the conclusion of the Singapore summit and no decisions have been made about suspending any future exercises,” Mattis said in a statement Wednesday.

Following the summit between Trump and Kim in June, the Pentagon said it would indefinitely suspend the annual Ulchi Freedom Guardian exercise and two Korean Marine Exchange Program training exercises with South Korea as part of diplomatic negotiations with the North.

The Trump administration has been engaged with North Korea for several months in an effort to scale back Pyongyang’s nuclear program, but those efforts have appeared to hit a roadblock in recent weeks.

Trump last week abruptly cancelled a planned trip for Secretary of State Mike Pompeo to travel to Pyongyang to continue negotiations. The Washington Post reported that Trump nixed the trip after a North Korean official signaled in a letter that the meeting would not be successful.

On Wednesday, the White House argued that China was partially to blame for the stalled efforts, accusing Beijing of applying “tremendous pressure” to North Korea because of the ongoing trade dispute between the U.S. and China.

“At the same time, we also know that China is providing North Korea with considerable aid, including money, fuel, fertilizer and various other commodities,” the White House said. “This is not helpful!”

However, the White House added that the trade disputes with China will be “resolved” and described Trump’s relationship with Chinese President Xi Jinping as “very strong.”

[The Hill]

Reality

Reminder: It was Vladimir Putin who suggested to Trump we cancel these military exercises.

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