The economic strategy of President Trump is so consequential and encompassing, even the domestic effects are felt globally.

♦Removing the U.S. from the multinational TPP trade deal initially planted the seeds of doubt amid multinational trade forecasters because the shift positioned the U.S. with unique leverage. They saw Trump using access to the worlds largest market as a negotiating strategy.

♦A few months later, President Trump walked away from the ridiculous regulatory restrictions within the Paris Climate Treaty. Instantaneously this put even more strategic manufacturing and economic advance on the U.S. ledger, and simultaneously made American energy independence a foregone conclusion.

♦And now that congress has codified President Trump’s lower domestic business taxes, in conjunction with opening up ANWR for energy development (a strategic economic goal for 20+ years), the size of the U.S. economic and manufacturing advantage has just increased U.S. trade leverage to almost unimaginable levels.

Economic Nationalism – President Trump’s strategy has created: •Lower and long-term predictable energy costs, not attached to OPEC or multinational influence; •Lower and long-term raw material costs due to slashed regulatory environment; •lower and long-term business manufacturing tax rates; and now Trump begins negotiating trade deals.

Add these advantages together within the largest economic market in the world and the U.S. is now the place where manufacturers will want to do business. Additionally, the process of utilizing Canada and/or Mexico as a workaround into the U.S. market, via NAFTA, is on the cusp of removal.

This is the backdrop for Canadian Prime Minister to consider his trade options.

•Canada is now anchored to the multinational rules contained in the Paris Climate Treaty. •Canada will no longer be able to utilize their own natural resources. •Effective yesterday, Canada has lost their strategic corporate-tax-rate advantage; and •there is a very real possibility the U.S. will pull out of NAFTA effectively closing the loophole exploited by China and Asia using Canadian companies as assembly plants for Asian products shipped duty-free into the U.S. market.

This is Prime Minister Justin Trudeau’s new economic landscape as he attempts to adhere to his former promises to remain in the Trans-Pacific Partnership (TPP) trade deal:

TOKYO — Japan’s former ambassador to Canada has added his voice to those concerned that confusion over Ottawa’s position on the Trans-Pacific Partnership could affect the relationship between the two countries. At last month’s Asia-Pacific Economic Cooperation summit in Vietnam, Trudeau’s decision not to attend a meeting of leaders of the 11 countries negotiating the trade deal — a meeting which the other countries expected would finalize an agreement in principle — “grated on Japanese sensitivities,” said Sadaaki Numata, formerly Japan’s top diplomat in Canada and an advisor to the Canadian Chamber of Commerce Japan. And he said it has put the relationship into a holding pattern, with the Japanese waiting for an indication that Canada is still interested in moving forward with the deal. “I am concerned that what happened recently might lead to a stasis in our relationship and that’s not good, that would not be very encouraging,” Numata said. “Certainly (Trudeau) may have been able to avoid a situation where people would call Canada’s attitude as something ‘unpredictable.’ (read more)

Allow me put it bluntly. Prime Minister Rainbow Socks is screwed. POTUS Trump has unleashed the U.S. economic engine; meanwhile Trudeau has anchored Canada to the Paris Treaty rules and is now on the brink of giving Canadian trade sovereignty to Asia.

Prime Minister Trudeau and Foreign Minister Crystia Freeland demanded that TPP be renamed the “Comprehensive and Progressive Trans-Pacific Partnership”. However, no amount of linguistic lipstick is going to hide the foolish ‘fine-print’ attachments within the multinational trade deal that will eventually be taken over by China.

China is in the perfect position in relationship to TPP. Chairman Xi Jinping sitting on the sideline waiting for everyone else to attach themselves to the rules, then China will strategically enter and all other nations become economically subservient. It appears to be a transparent long-game.

At CTH we occasionally ask ourselves if POTUS told Xi Jinping China could have trade leverage over Canada and Mexico in return for help on North Korea… and other things?

Wait., that would mean China knew Trump was likely pulling out of NAFTA way back in February 2017. …Nah, that would mean a much bigger and more comprehensive strategy than any one assembly of people could possibly pull off…. Right?

Right?