Russiagate refuses to lay down and die just yet.
Even as President Trump begins to more openly discuss the need to bring Russia back into the G8 nations and as he discusses feeling vindicated by the Justice Department’s Inspector General report on the Hillary Clinton / FBI e-mail probe, Paul Manafort had his bail revoked by a federal judge. He is now to be sent to jail while awaiting separate trials on money laundering and fraud charges. These charges followed allegations that he sought to obstruct the Russia inquiry whilst being under house arrest.
This report, run on USA today’s site and echoed across the American mainstream press, appears to be the latest counterpunch in the bizarre Russiagate investigation that has still, as yet, provided NO indication of any sort of collusion between the Russian Federation and the Trump campaign to “interfere” or “meddle” with the American Presidential election of 2016.
Paul Manfort has been taking beating after beating though. This is not because of his activity in any sort of collusion with Russian agencies, but because he allegedly was involved in a very large money laundering and fraud conspiracy in Ukraine. In fact, he has five counts charged against him:
“The five previously charged counts against Manfort remain unchanged: conspiracy against the United States, conspiracy to launder money, unregistered agent of a foreign principal, false and misleading FARA [Foreign Agent Registration Act] statements, and false statements,” the special counsel’s spokesman said in a statement last week.
While these actions, if proven true, would indeed be criminal activities deserving of a penalty like incarceration, they nevertheless have no connection to the original scope of the Russiagate investigation into election interference. One is simply not the other.
But to the press, this does not matter. This in fact appears to be the plan with Russiagate, that its unlimited scope is able to dig up an occasional crime that can be associated, however loosely, with the seriousness of the original charge.
Mr. Manafort had been free on bail awaiting trial when federal prosecutors representing Mr. Mueller and Mr. Manfort’s own attorneys met in court and clashed, with the Mueller team charging Paul Manafort and Russian business associate Konstantin Kilimnik with being involved in a scheme to tamper with two witnesses in the existing case that has been brought already against Mr. Manafort:
“The danger is that Mr. Manafort will continue to commit crimes,” prosecutor Greg Andres told the judge.
Prosecutors asserted that that the alleged obstruction effort, in which Manafort and Kilimnik sought to coach the testimony of the two un-identified witnesses, should trigger the revocation of Manafort’s bail, sending him to jail to await a July trial in Alexandria, Va.
These new charges were brought last week, and the investigators have alleged that “repeated contacts” occurred while Manafort was living at home under house arrest which had been originally gained as a condition of his release.
Fox News reported that Federal District Judge Amy Berman Jackson sent Mr. Manafort to jail on Friday, revoking the conditions of his $10 million bail. He is to remain in jail until the trials begin in August and September of this year. (The USA Today article reports the first of these trials to begin in July.)
Nevertheless, an unemotional Manafort simply pleaded “not guilty” to these charges.
“Mr. Manafort is innocent and nothing about the latest allegation changes our defense,” spokesman Jason Maloni said. “We will do our talking in court.”
As for Konstantin Kilimnik, he is in Moscow reportedly and no action is, or is expected to be, taken that could impact him since he is not in the US jurisdiction.
The timing for this action may not be deliberate at all, but given the history and strange nature of the Mueller investigation, it certainly does give the appearance of trying to keep the RussiaGate narrative alive at all costs, possibly due to the President’s stated intention to meet with President Vladimir Putin to see, among other things, about getting Russia back into the G8 nations.
The Deep State assault continues, and with continued power.
As Trump continues to levy trade tariffs on America’s trading partners, despite international agreements stipulating that such actions will not be implemented, the team of nations opposing Trump’s trade policies continues to grow and hit back. Back in March, Trump announced his plan to tariff China over its alleged economic aggression and ‘unfair’ trade practices, which sparked a tit for tat response from Beijing, which then met a punitive response from Washington realizing retaliatory measures from China before a deal was cut in Washington to make a truce on the trade war, effectively ending the tariffs spat, but which was then violated within a matter of days. China followed that up with an even amount of tariffs on American goods to compensate for the damage.
The EU as well, due to Trump’s metals tariffs, have unpacked countermeasures to deal with this new trade reality with America, and so has Japan, while South Korea has a dispute filed with the WTO over the matter. India, too, has promised an equivalent response, and has now requantified it, announcing that it is preparing to impose tariffs and remove trade concessions on some 30 products imported from the USA.
India will suspend trade concessions and raise import duties on 30 products from the United States by up to 50 percent, in a mirror response to Washington’s impetuous move to impose tariffs on steel and aluminum imports.
New Delhi has drawn up a list of 30 American products it now wants to target with increased import duties. The new measures will see a 50 percent tariff increase on motorcycles with engine capacities of over 800cc, while apple imports would be charged with a 25 percent levy. Imports of almonds and walnuts would see a 20 percent levy.
Earlier this week, New Delhi sent a letter to the World Trade Organization notifying the body of its intention. The total tariff increase on all products in the list will amount to an estimated additional $240 million in import fees. The sum is roughly equivalent to the damage India would suffer from Donald Trump’s protectionist measures.
“The proposed suspension of concessions or other obligations takes the form of an increase in tariffs on selected products originating in the United States, based on the measures of the United States,” New Delhi wrote to the WTO on June 13. “India wishes to clarify that suspension of concessions shall be equivalent to the amount of trade affected by the United States’ measures.”
“India reserves its right to further suspend substantially equivalent concessions and other obligations based on the trade impact resulting from the application of the measures of the United States,” the notification added.
In March, President Trump announced 25 and 10 percent tariffs on all foreign steel and aluminum entering the United States. While some countries were granted exemptions, India wasn’t. New Delhi made representations to the WTO in May, threatening to raise duties by up to 100 percent on 20 products imported from the United States. This week, the government has finalized its list and figures. Earlier, India said it will go ahead with retaliatory measures on 21 June, unless the US reconsiders its import fees.
New Delhi notified the WTO just as Commerce Minister Suresh Prabhu was wrapping up his trip to Washington, where he held discussions with US Commerce Secretary Wilbur Ross and US Trade Representative Robert Lighthizer, to find ways to avoid an all-out trade war.
Last week, speaking at the G7 gathering in Canada, Donald Trump lashed out against “unfair” foreign trade relations, this time between the United States and India. “I mean, we have India, where some of the tariffs are 100 percent. A hundred percent. And we charge nothing. We can’t do that,” Trump said last week. “We’re like the piggybank that everybody is robbing
But trade wars are good and easy to win, right? And the list of countries that have an economic gripe with the US isn’t growing? Not quite, in either case, as Europe is presently very much ill at east about the aluminum and steel tariffs, increase in oil prices, partly influenced by the geopolitical fallout from Trump’s JCPOA withdrawal, and China getting into a tit for tat trade spat with the US, with an outcome that very much adversely impacts trade in Europe and Asia.
In fact, with a growing list of nations that find America to be a poor trade partner, or who have been shunned by American markets altogether, it’s likely that they might start turning to each other to fill the void that the US market used to fill; that is, before Trump. Mexico and China are already seeking for other markets from which to source their goods in order to mitigate the damage of a trade war with America, and it won’t be surprising to see the news break out that India will do the same. India has already announced that it intends to continue doing business with Iran and Venezuela, despite US sanctions, and is improving its ties with Russia and China.
Fri, 15 Jun 2018 18:25 UTC – SOTTnet
“The Chinese are raping us” and “Canada is killing our farmers”! Such melodramatic claims from Trump resonate with many Americans, because the effects of globalization have been devastating for half the population. To his credit, Trump has been harping on trade deficit for thirty years – he was complaining about the Japanese in the 1980s. However, he’s vastly oversimplifying the issue and the solutions. This is an important topic that requires serious thought.
What is Trade Deficit?
Simply put, trade balance is the difference between our exports and imports. If we export more than we import, we have a trade surplus; but if we import more than we export, alas, we have a trade deficit!
Why Trade Deficit is Bad
Trade deficit is transfer of wealth.
Since our Federal Reserve Bank creates fiat money out of thin air, it’s hard to see the adverse effects of trade deficits. However, imagine for a moment that all trade happened with gold. Every year that we have a trade deficit, our gold reserves will shrink, and we can then clearly see that perpetual trade deficit is unsustainable.
Another facet of trade deficit is its impact on the money supply. Say you spend $1000 on jewelry at a local store. That’s not a one-time transaction. The jeweler may spend that money at a furniture store, whose owner uses that money to pay his employee, who uses that to pay his rent, which the landlord uses to buy groceries, and so on. Thus the economic effect of $1000 can be multiple times its value.
Now imagine the catalytic effect of $9 trillion! That’s the tremendous economic stimulus we have lost in the last two decades alone due to trade deficit.
Symptom of Jobs Lost
A corollary of trade deficit is that Americans are not producing the goods that we import. Of course, no country is 100% self-reliant, but everything we import potentially represents a lost American job.
Blame China? Not so Fast!
Blaming China, which is also a rising economic superpower, is a political winner. Yes, we have the largest trade deficit with China – about $380 billion – but that number is fake.
Look at an iPhone that’s assembled in China and shipped to the US. Our commerce department will claim a US-China trade deficit of about $600 on that iphone. In reality, China gets only about $40 out of that $600 because a Chinese company merely assembles various expensive parts from Japan, South Korea, Taiwan etc.
Thus, our true trade deficit with China is about half the official number.
But the Math Keeps Getting Murkier!
Trade deficit also fails to include the effects of overseas operations, foreign investments etc.
Consider that GM sells more cars in China than in the US. GM’s profit from those cars represent a transfer of wealth from China to the US. Similarly, US corporations such as Starbucks, McDonald’s, KFC, clothing brands, hotel chains etc. have tens of thousands of branches all over the world. Profits from all such activities are ignored in the trade deficit numbers.
Furthermore, when foreigners buy homes in the US, purchase shares of US corporations, acquire entire firms, or open a factory in the US, those investments aren’t reflected in the import-export statistics either. Add to that the large service industry that is dominated by the US (at least in terms of US- EU trade) and the US comes out with a large trade surplus with the EU, not a deficit.
So perhaps we need to come up with a new metric that’s more sophisticated.
Who to Blame?
There’s no doubt that US manufacturing has declined drastically over the years. In the 1950’s, the US produced 80% of world’s steel and cars; today, the shares are 5% and 10% respectively. The number of people in the manufacturing sector has steadily fallen over the decades and tens of thousands of manufacturing plants have been closed.
But the only people to blame for this are the US corporate elites. They are the ones who championed globalization and wrote NAFTA and WTO. For them, the only difference between a Mexican and an American worker is that the former costs less and hence is a better employee. Walmart buys $60 billion worth of Chinese goods every year, because the executives only care about maximizing their compensation and satisfying the major shareholders.
Interestingly, neither Trump nor any politician dares to challenge the corportocracy that rules the West.
Can Tariffs Help?
Tariffs are deliberate taxes and protectionist measures that make goods from other countries more expensive. They are usually helpful in nations that lack mature markets – for example, in the 19th century, the US benefited from high tariffs, which protected fledgling industries from European competitors.
Right now, guess who demands low tariffs on imports? Apple, Walmart, Home Depot, Starbucks, Ford and most other big firms that rely upon cheap raw materials, labor and finished goods from other nations.
Given that tariffs should be used only in special circumstances, Trump’s tariffs on imports of lumber and steel are quite misguided. Look at the prices of steel and lumber over the last two years – do these two industries need protection from foreign competition?
Trump’s tariffs will only hurt the average American by raising the prices of many consumer goods – for example, thanks to his tariff, washing machines’ prices are up 19% this year.
Furthermore, retaliatory tariffs from China, Canada and EU are have already been imposed and will hurt US farms and businesses.
Petrodollar – The Elephant in the Room
In the discussions about trade deficit, there’s a shocking fact that everyone ignores: after WWII, US bankers and politicians built a global financial system that, to work, actually requires the US to run massive trade deficits! Look at the dominance of US dollar in foreign exchange reserves held by central banks around the world:
How are those countries going to accumulate US dollars and US treasuries? Answer: by selling us goods and services.
Similarly, the US created the Petrodollar system in the 1970’s, forcing other nations to buy oil and commodities using US dollars. That system also perpetuates our trade deficit. For example, how is India going to get USD to buy oil from Saudi Arabia? By running a trade surplus with the US of course!
Originally, this system worked because of the so-called “petrodollar recycling” – countries like Saudi Arabia would use much of their oil revenues and trade surpluses to buy American products and weapons. However, as US manufacturing kept declining over the decades, the dollars from trade surpluses stopped flowing back to the US as it once did.
Without a Trade Deficit
Trump dreams of a world where the US has no trade deficit. However, if that happens:
- USD will no longer be the main global reserve or trading currency
- Foreigners won’t have USD to buy US treasuries/bonds
- The US government will be forced to slash its expenditure (social security, military etc.)
- We won’t be able to punish our geopolitical enemies through economic sanctions (since they won’t use US$ to conduct trade)
In other words, the USA won’t be a superpower anymore!
So Complex! What’s the Solution?
The best solution is to produce more American goods that the rest of the world will gladly buy without coercion. In order to do that, we need to rebuild a competitive, high-end manufacturing sector. (Note: this also creates numerous white-collar jobs).
The only ones who can revive manufacturing are those who shipped the jobs abroad – i.e. globalist corporations.
This year alone, US corporations plan to spend $800 billion on stock buybacks – which, by the way, used to be illegal until the 1980s. Such financial engineering only inflates the stock market bubble to irrational levels. If the elites were really concerned about the long-term prosperity of America, they would instead invest such vast sums of money to create jobs and innovative products at home. Unfortunately, most of the corporate big-wigs are concerned primarily with their corporations’ (and their own) bottom line.
There are also numerous other efforts that need to be taken by the US government, civil society, and individual Americans to address the systemic problems in our economy. It will take an entire book to discuss all those, and I am in the process of publishing one.
Chris Kanthan is the author of a new book, Deconstructing the Syrian war.. Chris lives in the San Francisco Bay Area, has traveled to 35 countries, and writes about world affairs, politics, economy and health. His other book is Deconstructing Monsanto.. Follow him on Twitter: @GMOChannel