Trade negotiations with China took a turn for the worse yesterday, as the White House announced plans to roll out a new 25% tariff on Chinese goods.
For the past month or so, the Trump administration has been hinting that a resolution to the trade dispute was just over the horizon. But trade talks with China break down more often than my aunt who calls an entire bottle of gin an “aperitif.”
According to U.S. Trade Representative and #1-not-a-fan-of-China Robert Lighthizer, “Over the course of the last week or so, we’ve seen an erosion in commitments by China, I would say retreating from commitments that have already been made, in our judgment.”
We had some indication over the weekend that talks were starting to break down (delivered in the same way we receive all our important geopolitical news these days).
On Saturday morning, the President tweeted, “The Trade Deal with China continues, but too slowly, as they attempt to renegotiate. No!”
And so, starting this Friday, tariffs on $200 billion of Chinese imports will be raised from 10% to a crippling 25%. (If you had your eye on that cheap Chinese snow blower, you might want to buy it now. Or don’t. It’s May.)
According to White House officials, there are three major sticking points on the deal:
- The U.S. wants the final trade deal to be made public, while Beijing would rather publish a basic summary of the deal. (If I had my ass handed to me by Donald Trump, I wouldn’t want all the sordid details micro-analysed by the New York Times either.)
- In order to meet all of Trump’s demands, China would have to actually change its trade laws. (Which is more of a pain in the a** than anything else.)
- The White House is actually kinda loving these tariffs. Reportedly, U.S. negotiators are driving hard to resolve the trade dispute with some tariffs still in place.
As Donald himself told his 60 million Twitter followers over the weekend:
“For 10 months, China has been paying Tariffs to the USA of 25% on 50 Billion Dollars of High Tech, and 10% on 200 Billion Dollars of other goods. These payments are partially responsible for our great economic results.”
U.S. stocks took a nosedive Monday morning in response to the news, but the Dow Jones Industrial Average staged a Rocky-esque comeback, ending the day at just down 0.3% at the close. Meanwhile, Chinese stocks posted their biggest single-day decline since 2016.
There is some speculation that this is just a negotiating tactic from Trump’s team to use as leverage as they enter the final stage of negotiations. China’s vice premier will be in town later this week to attempt to resume negotiations. (He should probably read The Art of the Deal before then.)
The governor of Illinois announced a new bill yesterday that would legalise the recreational use of marijuana in his state. (How is this only happening now? Didn’t Chicago invent jazz?)
Under the new law, residents would be allowed to carry 30 grams of the sticky icky without repercussion, while non-residents would be restricted to just 15 grams (because out-of-staters can’t hold their weed).
Additionally, folks would be given the green light to grow their own — as long as you grow no more than five plants and keep your Dankinstein grow op in a locked room out of public view (lest a poor child put eyes upon the devil’s lettuce).
Make Some Illinoise!
Governor Pritzker’s bill includes a plan for routing the fat stacks of cash to various social programs:
- 25% to the Restoring Our Communities Fund, which distributes funds to communities most affected by drug use and the war on drugs
- 20% to mental health and substance abuse treatment
- 10% for unpaid bills
- 8% percent for law enforcement training grants
- 2% percent for public drug education.
If the bill is passed — which seems likely considering Pritzker’s Democrats hold the majority in both chambers — the law would go into effect on Jan. 1, 2020.
Critics of the bill have pointed out that the bill gives priority to the medical marijuana operations that are already in place. This gives them an unfair advantage over entrepreneurs who want to enter the legal weed game. (Who will have a hard time staying motivated as it is because of all the legal weed.)
The XFL is Back, Baby
Vince McMahon’s more horny, more violent football league is back (but this time it’s going to be less horny and less violent).
McMahon is better known for his sweaty, violent, multi-billion-dollar soap opera, the WWE (aka World Wrestling Entertainment Inc.).
But in the spring of 2001, McMahon had a not-so-brief moment of insanity and launched an off-season football league, complete with all the trimmings we’d come to expect from McMahon’s tenure at the WWE.
The XFL was exactly like the NFL except:
- The team names all sounded like crappy energy drinks (including such classics as the Maniax, the Rage, and the Xtreme).
- Players had WWE-style ALL-CAPS nicknames like HE HATE ME, BIG DADDY, and DEATHBLOW.
- The league allowed (and encouraged) harder hits, with fewer penalties.
- Scantily clad cheerleaders were filmed like a soft-core porno and were encouraged to date the players (to create that sweet, sweet drama).
- It paid its players garbage.
The XFL’s first and only season aired on NBC and bizarrely lead straight into SNL (the XFL as a concept is probably funnier than the majority of SNL episodes).
Keeping McMahon away from the day-to-day of the XFL is key to its success.
Although McMahon is involved with the 2020 XFL reboot (he sold $100 million in WWE stock to fund the venture), he’s handed the reins over to the decidedly more serious and less-horny Oliver Luck.
Luck’s career in sports could not be more different than McMahon’s. He started as an NFL quarterback. After his retirement, he served as CEO of the Houston Sports Authority, president of Houston Dynamo, and executive vice president of the NCAA.
Luck has signaled his intention to steer the XFL away from its wonderfully trashy roots. The EXTREME team and players names are gone. The hyper-sexualised cheerleaders are just regular scantily clad cheerleaders now.
The new XFL’s mission statement is that the games will be faster, safer, fan-centric (whatever that means), and played in less than three hours. And the games will no longer lead into the Kenan Thompson Pulling Faces Show.
Starting Feb. 8, ABC, Fox, ESPN, ESPN2, FS1, and FS2 will all be broadcasting XFL games. Obviously, that’s a huge win for a league with the XFL’s reputation and a vote of confidence in Luck.
In fact, the biggest challenge Luck now faces is distancing the new XFL from the reputation of its namesake. Which, as it turns out, is barely a name in the first place. Apparently, the “X” in XFL doesn’t actually stand for anything AND NEVER HAS.
It’s just a letter they needed to fill out their logo.
“There are a limited number of letters in the alphabet,” Luck said in an interview with the Rolling Stone. “AFL? Nope, taken. BFL? Eh, doesn’t sound very good. CFL? Taken. DFL? What’s the D stand for? … They went all the way down the list, slept on it for a couple of days, came back — and, long story short, they said the XFL still has some brand equity.”
The XFL’s salary cap for its 52-man roster is set at a little over $4 million — which works out to just $77,000 per player. The NFL’s rookie minimum salary is seven times higher than that. (Which means the roster will be largely made up of NFL rejects and former NFL stars with gambling debts to pay off.)
Whether or not Luck can successfully temper McMahon’s worst impulses and keep this ship on course remains to be seen. But this is the closest we’ve gotten to a legitimate off-season football league since the USFL in the 80s.
One Last Thing
China’s Ethnic Internment Camps are Overflowing
Investor’s eyes are all on China right now.
As we covered in today’s first story, every development in the trade negotiations sending shockwaves through the global markets.
And there’s a good reason for that.
China is the world’s second-largest economy. And as such, how it interacts with the world’s largest economy (the good old U.S. of A.) has an enormous impact on the economy of the world at large.
And when you get to be as wealthy and powerful as China, you’ll find it comes with some perks.
If you can keep the cheap products rolling out, folks will happily look the other way when it comes to… minor indiscretions. (And by minor indiscretions, I mean some of the worst human rights violations we’ve seen since World War II.)
Since 2017, the Chinese government has been rounding up a segment of its population and imprisoning them in internment camps without trial.
These folks are not protestors or anti-government activists. They’re simply guilty of being Uighurs, an ethnic minority with which the government has taken a sincere disliking to. (You don’t want to be someone the Chinese government sincerely dislikes, especially if you live in China.)
In the last two years, China has rounded up more than 2 million Uighurs and imprisoned them in a network of massive internment camps.
In these internment camps, called “reeducation centers” by the Chinese government (who don’t realise how Black Mirror that sounds), Uighurs are forced to undergo psychological indoctrination programs.
Prisoner’s daily routine includes studying communist propaganda, “giving thanks” to Chinese President Xi Jinping, and some light torture. According to the admissions of Chinese officials, waterboarding and other forms of torture are part of the “reeducation curriculum.”
The government has tried to deny the existence of these camps. But even China can’t disappear more than a million people without anyone noticing.
In tomorrow’s issue of One Last Thing, we’ll get into why China is imprisoning the Uighurs and look at the possible side effects this could have on the global economy.
Until then, perhaps consider what happened the last time a dictator tried to imprison and wipe out every member of an ethnic minority…