Category Archives: NATO

Trump Tariffs and the Globalist Spinning Heads

Image result for spinning headsIt is funny to watch the talking heads opine, wring their hands, and pop Valium on live TV over Trump’s proposed steel and aluminum “tariffs”.  They cry that Trump is creating a “trade war” and that our really nice allies are going to hate us.  Even farm groups are getting in on the act claiming that wheat, soybeans, and other commodities are going to be subject to retaliation.  The absolute dumbest comment that is often repeated is that there are only 250,000 workers in steel and aluminum but there are 6,500,000 workers who need steel and/or aluminum products to support their industries.  A trade war would endanger 6,500,000 workers versus only 250,000 who may benefit!  Really, a 25% tariff on steel and a 10% tariff on aluminum, will cause 6,500,000 people to be laid off!  Then, our idiotic Congressional hacks all badmouth Trump’s policy even though they have no idea what it is like to compete today in the so-called “free market” of globalism!  They all need to get a real job and get some dirt under their fingernails!

Subsidies Are Tariffs:  First of all, “tariffs”, a tax on imports or exports between sovereign states, is only one way to screw your trading partner!  How about when your country produces wheat and my country produces wheat, but your country pays you $1.00 per bushel to produce your wheat.  This allows your country to produce more of a product that may not be economically viable if not subsidized.  The result, the world “free” market is now being flooded with a product because of one country’s subsidy!  This is not fiction.  When I was farming and growing sugar beets, the EU decided to subsidize their beet and cane production.  The result is that world sugar prices were driven down to $.06 a pound and we had to stop growing and EXPORTING sugar while the EU subsidized growers overproduced creating more downward pressure on sugar prices.  The EU farmer did not receive only $.06 per pound, they received almost $.25 per pound due to direct and indirect EU farm subsidies!  Their subsidy increased as world prices in the “free market” went down.  China and others do this today with Steel and Aluminum and a whole host of other products and commodities.

VAT Taxes:  Mexican IVA (VAT) tax is levied at the rate of 16% on most imports from even the US.  China, the EU and many other nations charge US manufacturers a VAT tax on all of their exports into these countries.  While the US manufacturer can recoup the VAT tax when the produce is resold in the designation country, the US product is automatically 16% more expensive than competing local products that are exempted from the VAT tax!

Quality/Health Restrictions:  MANY countries have set artificial import barriers by imposing harsh Quality or Health restrictions on incoming products.  These restrictions are levied against specific products from specific nations.  Case in point is Japan’s restrictions on importing US beef and other animal products.  In order to protect its own beef producers, Japan imposed quality requirements on US beef that even Japan’s own producers could not meet if the same standard applied to them.  The EU applies the same discriminatory barriers to US imports for many food products coming into the EU from the US. 

One of the funniest examples I personally experienced was when I was working in Tunisia.  Tunisia was a prior colony of France so France kept their paws in the Tunisian economy especially long after their independence.  Wine grape juice was sent into France and many of the French import restrictions on juice from Tunisia were waved entirely.  ESPECIALLY THOSE THAT WERE LABELED AS “FRENCH WINE” AFTER BEING PROCESSED IN FRANCE.”  This ticked off the Italians who thought they were part of the EU with France.  I guess they never read George Orwell’s Animal Farm.  (French wine is more equal than Italian Wine! )  If you were in the US trying to export wine to the EU, forget it.  It would be easier and cheaper to import heroin!  

So, without belaboring the topic with more details of a Tariff is not just a tariff, don’t think that the word “free trade” does not mean that countries we try to export to are “free” to our exports.  Also, that even if both countries have the same tariff percentage, VAT taxes, heath and quality fees may erase the “free” part!  One other nutty “tariff” is the EU’s global warming restrictions.  If the grand poohbah of the EU decides your country is not doing its part to lower cow flatulence, I mean global warming, then you could get a demerit, tax, on all products coming from your country!

What is Trump Trying to Accomplish?

  1. NAFTA:  Hold Canada and Mexico’s feet to the fire on renegotiating NAFTA and leveling trade imbalances, including quality standards, VAT, and other non-leveling practices.
  2. ChinaTrump wants to deal with China Top-To-Top rather than have a knock down drag out with them publicly.  Trump needs to maintain a dialogue with Xi on North Korea and a whole host of issues that are vital to our national interest.  He wants to whittle down the trade deficit with China but in as low-key a way as possible.  The blowhards who want to “attack” China head on are not responsible for leveling trade and maintaining world stability, Trump is!  Trump will deal with XI directly on intellectual property, currency manipulation, state industry dumping and other related trade issues.
  3. EU:  The EU sticks it to us on trade every time they get a chance.  Whether it is on agricultural products, BMWs/Mercedes, or steel, the EU does not treat us as a valued trading partner and do not particularly concern themselves over our trade imbalance.  Try exporting a horse to the EU.  If your horse does not have a passport, yes a passport, with all of the injections your horse has had, no deal.  Remember the French and others eat horse meat and they want to know what their meal has been injected with!  Trump sees NATO and the EU as intertwined.  Subsidizing their defense is not acceptable and having an unfair trade imbalance just adds to this level of unfairness in Trump’s mind.  He will negotiate long and hard with the EU and will do so openly as he did NATO and their lack of owning up to their commitments.

Many argue that trade imbalances are not harmful and are actually healthy by providing US citizens with low-cost products.  They argue further that even if a US company cannot make broom sticks as cheaply as they are made in and shipped in from China that is OK because the US consumer is getting a cheaper brook stick!  That great unless you worked at the US broom stick factory!  They will then argue, that is ok, they have unemployment, welfare, food stamps etc. to fall back on! 

So, we lose our factory that paid taxes, we lose the taxes from the employees who used to work at the broom stick factory, and now we have to subsidize the Chinese Broom Stick by giving our ex-broom stick employees $65,000 is welfare and other government paid goodies!  Bet you don’t hear Larry Kudlow or the Wall Street Journal mention that little paradox!  Trade imbalance can be offset with foreign investments back into the US IF THOSE INVESTMENTS PRODUCE US JOBS!  In the past 40 years we have lost out export base, increased our trade imbalance to $800 Billion, and CLOSED 55,000 US factories!  Maybe some of these really smart people need to go back to their Ivy League schools and try ECON 101 again. 

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Trump knows you have to stimulate the supply side via business tax and regulation reductions; stimulate the demand side by creating good paying jobs; and leveling our trade imbalances by insisting on a fair international trade playing field.  The US is 5% of the world population and consumes 25% of the world output including our own.  Trump knows that you cannot have low exports and continue to lose our own industries and jobs and still maintain a healthy GDP and economic growth.  

RD Pierini



Afghanistan/Pakistan/Indian/South Asia Challenge-The Trump Doctrine

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The Trump Afghanistan/Indian Sub Continent/South Asia Doctrine:

Last night, August 21/2017, President Trump outlined his Afghanistan foreign policy plan as part of his Afghanistan/Indian Subcontinent/South Asia foreign policy.  He has been asking his advisors for months “What does winning in Afghanistan look like”?  Trump drilled down on the result first, forcing his advisors to start with the conclusion then working a strategy to achieve that result…  He kept questioning their approaches until he was able to formulate a foreign policy that may achieve a result that benefits United States self-interest.  What has evolved is a doctrine that seeks to bring together a real diverse, and challenging “coalition” of disparate interest and nations.

Strategic Change:  Afghans Determine their Future

Inside of Trump’s address, was the notion that the US has no interest in defining the political self-governance structure of Afghanistan.  GW Bush and the Neo-Cons had the goal of establishing a western-style democracy over a country that is absolutely tribal in nature, with war lords as their overseers, with no experience in self-governing other than within the tribe.  This concept was doomed for failure at the outset especially when you add in the fact that these peoples were Muslim.  Islam has its own inherent governance structure.

Afghanistan is NOT a country made up of homogenous ethnic peoples with the same self-interests or even share any historical commonality.  There are 8 major ethnic groups within the current Afghan borders that were defined in the late 1800’s and early 1900’s by the British, Russia, and China.  The resulting “country” was basically a corral around a many peoples, most of which knew little or nothing about the other.  The map below will give you an idea of how disparate the ethnic make-up of Afghanistan is.

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Don’t make the mistake and try to draw a comparison to our republic that is made of 50 States.  The closest US analogy would be if the Christopher Columbus had drawn a line around the US and told all of the tribes of native peoples (Indians) and island dwellers, that they had to be subservient to Washington DC (I know it did not exist in 1492).  Further, that they had to vote for the central government leadership!  It is pretty amazing how clueless our own leadership is!

President Trump recognized that for the US to try to superimpose a central government over Afghanistan is a fool’s folly.  He stated point-blank that he has no interest in meddling in the Afghans governance.  While this one message is subtle, it is key to recognize that an Afghan western-style democracy cannot be a criteria for success!

Primary Success Criteria:  Eliminate Terrorist Haven in Afghanistan

President Trump stated that there are 20 separate terrorist groups in Afghanistan and in Pakistan.  His number one success criteria is the elimination of terrorist organizations from Afghanistan and allowing the terrorist organization from reconstituting in Pakistan.  Period!  

This is not simple and contains many tactical changes to give this a fighting chance.  Trump stated he will incorporate changes to achieve this goal:

  1. Rules of Engagement:  The President stated that he will take off the restraints on our commanders and soldiers and allow them to fight to win.  This will include the elimination of having embedded LAWYERS making the decision as to whether a soldier can fire on someone planting an IED!  How stupid is it to read a terrorist his “Miranda Rights”!  Further, that in-field tactical decision-making will not require approval from Washington and that the Military command will be empowered to take the fight to the criminals and terrorist, this is critical that we fight both, and eliminate them as a threat.  
  2. Focus on the Fight:  The US will no longer be in the business of nation building.  Our troops will no longer be building roads and buildings but focused on killing terrorist.  Period.
  3. Eliminate Cross-Border Safe  Havens:  The President also said that they will pressure Pakistan, apply real pressure and not just lip service, to not object to the US bombing terrorist havens inside of the Pakistan border with Afghanistan.  Today, the terrorist scurry across the border and we do not pursue them.  Trump will use our aid to Pakistan and other economic incentives to coerce the Pakistan Government to cooperate with the US.  He will also seek to isolate their nuclear weapons even more to ensure they do not fall into the hands of the terrorists.
  4. Stalemate China:  China has been a long-term player in both Afghanistan and Pakistan and are close neighbors with the former sharing a small border with China.  China has also been instrumental in the nuclearization of Pakistan!   The US will have to put pressure on China to keep them from interfering in our efforts to work with Pakistan to eliminate the terrorist from the region.
  5. Stalemate Russia:  The old Soviet Union bordered Afghanistan and had long sought to take over the Afghan mineral deposits.  Since the Progressive Left has interfered with Trump’s ability to work with Russia on Syria and other common issues, it will be difficult for the President to stalemate Russia.  That said, Trump will do everything he can to insure that Russian arming of the militants is minimized.  Russia shares many of our concerns for militant Islam and hopefully Trump will be able to overcome the “Russia Fever” that the left has created in our country.
  6. All Out War:  Trump will also wage a war to win and focus less on pressures to fight a “gentlemen’s war”.  He has already increased bombings by over 182% since taking office.  He will use special forces, air power, cyber, and increase commitments from NATO and other allies.  He may run into some resistance from some NATO allies as he talks the gloves off.  The French, for example, don’t like to fight at night!  Amazing.  Trump will also push the envelope in terms of pure fire power using even more MOABs to get the attention of the Terrorists.
  7. Engage the War Lords:  Trump’s team recognizes the role the regional war lords play in running Afghanistan.  Trump will have to prevail on them to cease sheltering and aiding any of the terrorists.  If he can persuade them that the US is not supporting a centralization of an Afghan government and allow the war lords to have a larger role in Afghanistan’s future, he may win most of them over.

Second Success Criteria:  Reduce the US Financial Commitment

Trump was subtle in his speech to enlist more financial support from Afghanistan, NATO and even India!  He is focused on $$$ and the US need to get others to help foot the bills that benefit others as well as the US.  He will probably tell Tillerson that he will take care of this part of the diplomatic effort!

  1. Afghanistan Financial Support:  Remember Trump talking about the Iraq war and that we should have “taken” some of the oil as repayment for our economic commitment to “liberating” Iraq?  Well, Afghanistan’s mineral and gemstone wealth is estimated at 1-3 Trillion dollars and include: barite, chromite, coal, copper, gold, iron ore, lead, natural gas, petroleum, precious and semi-precious stones, salt, sulfur, talc, zinc, emerald, lapis lazuli, red garnet and ruby.  Trump will probably seek to bring in international companies to help Afghanistan develop these resources and use part of the proceeds to offset our costs in the war effort.  Trump will also have to replace Afghanistan’s largest cash crop, poppies for opioid sales, with other sources of income for the war lords.   This change is needed to help rid the world markets of cheap opioids.  
  2. NATO:  Trump will ask NATO to increase their financial and military commitment to the Afghan Terrorist War as well.  NATO has already stated that they approve of the Trump Doctrine in South Asia and are open to discussions moving forward.
  3. India:  India is an interesting inclusion into the increased economic support for fighting terrorist in Afghanistan.  First of all, India is not a Muslim majority country and is in fact the home of the Sikhs who are enemies of the Muslims.  India would love to see the US exert more pressure on Pakistan as the two are also enemies in both religion and politics.  A more stable South Asia would benefit India and allow it to focus even more on its economic development and somewhat less on national defense.  The President seeks to pressure India, via its trade advantage with the US, to have India supply economic aid in Afghanistan in various forms.  At best, this will challenge even Trump’s “Art of the Deal” skills.  The overall alliance will include Muslims (both Sunni and Shia), Hindu, Sikhs, and a handful of others!  The alliance does, however, form a solid base for a true South Asia policy that includes Afghanistan, Pakistan, and the Indian sub continent.  (May be easier than repealing Obamacare in Congress though)

The goals of the strategic change in Afghan self-determination, the defeat of terrorism in Afghanistan and to some degree Pakistan, and the Cost-Sharing goals to reduce US economic commitment to Afghanistan, define Trump’s success in Afghanistan.  If this succeeds with this “odd” alliance of players, it will have long-standing benefits in South Asia and help to stabilize a Post-Soviet South Asia.  If we do not succeed according to a time-table only Trump knows, we may pull out of Afghanistan sometime in the future.

There are many other facets of this doctrine that will be fleshed out in the coming months.  Trump will let the Generals and the troops do their jobs but will keep pressure on Mattis and his staff to keep their eye on the ball.  He will also make sure the Treasury is doing all they can to cut off the supply of funding to the terrorist and keep other cabinet members contributing in any way they can to assist the fight.  Rex Tillerson has a difficult job of keeping the coalition together while maintaining stability in Pakistan and elsewhere.  No small task.

Observation:  One thing to look for that will differentiate this campaign from our past feeble efforts to rid Afghanistan from Terrorist is a cessation of warfare during the winter months.  I would hazard a guess that Trump will seek to keep the terrorist from relaxing during the winter months with a series of asymmetrical attacks by land and air.  Sleep deprivation can be a demoralizing factor for sure…

RD Pierini



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NATO Underfunding is a Signal of Weakness to Putin

Trump to NATO, put your Money where your Mouth is…”


Image result for trump scoulding at nato meeting

Russia and its leader Putin only respect strength. 

The NATO countries who are NOT investing their committed 2% to defense spending are sending a message to Putin that they do not take Putin’s threats seriously and that they are not willing to invest in their own defense to stop Putin, PERIOD!

This should give pause to the Baltic NATO members and wanna be NATO members such as the Ukraine that only 18% of the NATO members take Russian threats seriously, let alone ISIS.

The Biggest NATO Jokes:

Below is a chart showing each NATO member and their respective commitment to their own defense spending.

Core Spending Dodgers:

The US liberated France in WWII yet France only contributes 1.8% of their GDP to defense.  Germany, who we rebuilt after WWII and who we helped in their unification only spends a measly 1.2% of their GDP on defense spending.  Other countries who are dodging their commitment to NATO who we have defended or liberated in the past include Italy at 1%, Spain at .9%, Czech Republic at 1%, and many of the members of the Baltic States Council who are under threat right now from Russia, include Denmark at 1.2%, Latvia at 1%, Lithuania at 1.1%, and Norway at 1.5%.

If you are Putin looking to regain much of the Soviet Union’s empire states, why would you fear a bunch of countries that do not even meet their minimum standards of financial support that they agreed to!  Obviously Putin does not respect NATO nor its pathetic non paying members. 

Putin’s incursions into the Ukraine and Crimea are merely the beginning if NATO remains pathetically uncommitted.  ISIS has already infiltrated into the core nations of NATO via the EU’s open borders policies.  The EU is more committed to maintaining their open border policy than defending themselves and their citizens against Putin or ISIS.

The US is fortunate that Trump came along when he did or the US would appear a pathetically weak as the EU and Non Paying NATO nations… 

RD Pierini



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