Meraglim Blog

U.S. – Mexico Trade Deal is a Win-Win for the Parties, But a Loss for China

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn

Financial media were filled with headlines last week about the new Mexican-U.S. trade deal designed to replace NAFTA. The Canadians began negotiating a similar deal at the last minute.

It’s not clear if Canada can join the U.S. and Mexico in a “new NAFTA” or if the Mexican-U.S. deal will stand alone, but either way it’s a great accomplishment by President Trump and his trade team.

Mexico will retain preferred access to U.S. markets and the U.S. will benefit from huge new agricultural purchases by Mexico. Tariffs will be reduced or eliminated in many categories. This is a classic win-win deal.

But, as this article shows, there is one big loser – China. By finding a new market for U.S. soybeans in Mexico, Trump has removed the Chinese threat to buy fewer soybeans from the U.S.

The Mexican deal also gives Trump a political win ahead of the mid-term elections, which makes a Chinese deal less urgent. If Canada can be brought into the U.S.-Mexican fold, the win will be even bigger and China’s leverage even less.

This dynamic was reflected in the fact that the Trump trade team recently increased their demands on China to include internal structural reform in addition to trade concessions. These reforms are not likely to happen soon, if at all, which shows how a China deal is suddenly less pressing.

The political benefit to Trump of confronting China may now outweigh the detriment of a trade war. By outflanking China in Mexico, Trump once again highlights the art of the deal.

Accredited investors interested in learning more about Jim Rickard’s private placement in the world’s first predictive data analytics startup that combines human and artificial intelligence with complexity science should check out his offering at Meraglim Holdings. Click the link to learn more.

IF THE SCIENCE IS NOT ON YOUR SIDE, JUST TRY THREATS

It’s clear that good science does not support the extreme claims of the climate alarmists. Yes, there is such a thing as climate change, but it’s slow, difficult to predict and almost impossible to model because of the complexity of the process. The climate alarmists have grabbed most of the headlines for the past ten

Read More »

WHY TRUMP WILL WIN REELECTION: NOT POLLS OR PUNDITS; JUST COMMON SENSE

Political analysts use polls, betting odds, historic trends and other inputs to make their (usually wrong) political predictions. We all remember that “experts” said Hillary Clinton would win the presidency in 2016 (they gave her a 92% chance on the morning of the election), and that the UK would vote to “remain” in the EU

Read More »

HERE’S ANOTHER ELITE WITH ANOTHER PLAN TO TAX AWAY YOUR WEALTH

The elites never rest when it comes to devising new ways to take your money through taxes, inflation or outright confiscation. The latest Trojan horse the elites are riding to take your money is climate change. The climate does change over long periods of time for reasons that are not well understood except that they

Read More »

KRUGMAN SHOWS HE KNOWS LITTLE ABOUT ECONOMICS AND LESS ABOUT FINANCE

We already knew that Nobel Prize winner Paul Krugman knows almost nothing about economics. Now, we see from this article that he knows nothing about banking either. Krugman claims that the repeal of Glass-Steagall and the actions of banks in general were not the cause of the 2008 financial crisis. The conventional wisdom is that Lehman Brothers,

Read More »
Scroll to Top