So from my perspective, and I'm very sorry to say this, but Carney is going to totally F#CK the Canadian people.
He thinks he has an upper hand on the trade/tariffs because the US buys his 'discounted' oil. But that oil is high sulfur and harder to refine. The cheapest place to transport it is to the US, where we have refineries that can handle it. The other options are for shipment of it to Vancouver, put it on tankers and ship it off to another customer nation. But the transport costs alone would make it unprofitable.
Timber from Canada? We have forests galore and our timber companies would gladly ramp up our own production.
Steel? We can do that too.
We have a trade deal with the UK now. Canada/US is a bigger market and trading partner but it is mostly to the benefit of Canada and so Carney is taking a huge risk.
Modi in India is racing to get the next trade deal and that look like it is coming along nicely, ditto with the Japanese as they are running to the see if they can edge out India.
China is even coming to the US. With hat in hand. They fear what will happen to them if we close off the markets.
FULL STORY AT ZeroHedge >>>
https://www.zerohedge.com/markets/f...-trump-quietly-reach-out-first-reuters-report
Fear Of Economic Collapse Forced China To Negotiate With Trump, Quietly Reach Out First: Reuters Report
Three weeks ago, when we first reported that as a result of the ongoing Trump trade war with China, "chinese factories are shutting down, laying off workers", we said that as a result of this war of attrition in which the outcome of every incremental clash and battle will be used just as aggressively for media propaganda, "the fact that any marginal pain will be amplified as trade war weakness will mean that Beijing will do everything in its power to prevent the full extent of the shutdowns from being revealed."
Sure enough, last week the WSJ reported that whereas "not long ago, anyone could comb through a wide range of official data from China... then it started to disappear."
We detailed the unprecedented disappearance of Chinese "data", fake as it traditionally may have been, earlier this week. But while we had our theories why China quietly vaporized hundreds of data sets - naturally one wouldn't be deleting the data if it was good, or could at least be massaged in a credible way - it was not until today when a Reuters report confirmed what we said from day one, namely that in the long run China's economy has more to lose than the US, where the hit would be faster but would focus primarily on the market, and once the initial selloff shock wears off leverage would swing to benefit the White House.
And just as we supposed, Beijing's unprecedented propaganda campaign, it was the cracks in the economy that forced Xi to the negotiating. According to the Reuters report, "since U.S. President Donald Trump imposed steep tariffs on China last month, Beijing had responded in kind. On state and social media, it posted images of Mao Zedong, lambasted "imperialists," and sent a message: capitulation to bullies is dangerous, and it wouldn't back down."
But behind closed doors, China was quietly preparing to do just that, and Reuters reports that according three sources, officials had grown "increasingly alarmed about tariffs' impact on the economy and the risk of isolation as China's trading partners have started negotiating deals with Washington."
China's reasons for deciding to negotiate, Washington's letter on fentanyl, U.S. diplomatic challenges in Beijing, and the early outreach between the two sides are reported by Reuters for the first time, based on interviews with nearly a dozen government officials and experts on both sides.
As usual, China's diplomatic efforts had two faces, one for popular domestic consumption, and one for private engagement with the adversary, in this case the US.
Sure enough, China's foreign ministry said in a statement to Reuters that it reiterated that "China's firm opposition to the U.S. abuse of tariffs is consistent and clear, and there is no change." It added that "the U.S. has ignored China's goodwill and unreasonably imposed tariffs on China under the pretext of fentanyl. This is a typical act of bullying, which seriously undermines dialogue and cooperation between the two sides in the field of drug control."
In retrospect, the pretext may have been "fentanyl" but as we learn in a follow up report today from the WSJ, it was anything but a facade: according to the Journal, Xi Jinping is sending his top public-security aide to Switzerland as part of Beijing’s trade talks with Washington, signaling the importance of the fentanyl issue to bilateral relations.
Wang Xiaohong, who is the minister of public security and a senior leader within the State Council, China’s cabinet, will be part of the Chinese delegation led by Vice Premier He Lifeng, a trusted aide to Xi and a gatekeeper to the world’s second-largest economy.... Xi has designated Wang, a close lieutenant, as the point person in Beijing’s recent discussions with Washington over how to address President Trump’s concerns about China’s role in the fentanyl trade, The Wall Street Journal has reported, helping pave the way for the weekend trade talks.
So no, the US had not "ignored China's goodwill", and judging by Xi's response, clearly the issue of fentanyl is a very serious one, and more importantly, one which will allow Trump to score a quick and easy victory over the weekend, one which will further demonstrate the Trump admin's growing leverage in the ongoing negotiations.
But back to the Reuters report, according to which China's Vice Foreign Minister Hua Chunying said on Friday that China has full confidence in its ability to manage U.S. trade issues, adding that "the Trump administration's approach cannot be sustained." Once again, however, we learn that it was China's approach which was far more unsustainable.
The trade war between the world's two largest economies, combined with Trump's decision last month to impose duties on dozens of other countries, has disrupted supply chains, unsettled financial markets and stoked fears of a sharp downturn in global growth.
After Trump's tariff salvo last month, China took a hard line in its public messaging. Beijing posted footage on its official social media feeds of a Chinese MiG-15 fighter shooting down a U.S. jet in the Korean War, with commentary: "China won't kneel down, because we know standing up for ourselves keeps the possibility of cooperation alive, while compromise snuffs it out." The tone began to shift on April 30, when a state media-affiliated blog said the U.S. had "proactively reached out to. . .
