Larry Kudlow: Trump Uses Trade as Foreign Policy Tool Against China

Trump's Strategy: Trade as Foreign Policy

• 🎯 President Trump is utilizing trade deals as a primary instrument of foreign policy to strategically engage with and influence China.
• 🔑 This approach is highlighted as a significant accomplishment from Trump's recent Southeast Asia trip, emphasizing that trade is inseparable from foreign policy.

Fentanyl and China's Promises

• ⚠️ The discussion revisits President Trump's request to China's President Xi Jinping to stop fentanyl, a promise made 7 years ago at the G20 summit.
• 🤝 There's a hope that Xi will keep his promise this time to prevent further deaths from the drug, underscoring a "trust but verify" approach.

Trade Regulations and Rare Earths

• 🚫 New trade deals with countries like Australia and Vietnam include strict regulations to ban Chinese transshipping, which hides unfair trading practices.
• ⛏️ Australia and Vietnam already possess rare earth stockpiles, with other countries, including the US, developing their own.

US-China Relations and Decoupling

• 📉 US-China relations appear to be deescalating, with anticipated reductions in Chinese tariffs.
• ❓ The key question remains whether this signifies a new era of cooperation or a managed decoupling strategy between the US and China.

Ongoing Investigations and Future Deals

• 🔍 The US trade representative is expected to continue a 301 investigation into China's broken promises regarding the US-China Phase 1 trade deal.
• 📈 President Trump has rated the recent meeting as exceptionally high, though a cautious "trust but verify" stance is advised, referencing Reagan's approach.