China

Trump Trade Initiatives Face Stronger Headwinds

Regions like the Pacific Northwest rely heavily on international trade to bolster their economies. Concerns are growing the US economy may suffer because Trump administration trade initiatives such as the new NAFTA are foundering.

Regions like the Pacific Northwest rely heavily on international trade to bolster their economies. Concerns are growing the US economy may suffer because Trump administration trade initiatives such as the new NAFTA are foundering.

Trump administration trade talks with China remain in limbo and negotiations with the European Union have flatlined. Now Trump’s new NAFTA trade agreement is faltering in Congress. The absence of agreements and the continuation of tariffs are piling more stress on manufacturers and farmers. 

No one expected trade talks with China would be a cake walk. Bruised relationships with European political leaders may contribute to stalled negotiations with the EU over agricultural products. But Trump trumpeted his success in maneuvering Mexico and China into a trade deal only to see the agreement flounder amid bipartisan complaints.

The early onset of the 2020 presidential election only complicates the situation with trade policies morphing into trade politics.

Trump’s protectionism has begun to chafe with traditionally free-trade Republicans, many of whom represent agricultural interests that are paying the price of a trade war with lost sales and the prospect of lost markets.

Republican Senate Finance Chair Charles Grassley has flatly told Trump he won’t move the new NAFTA trade deal until Trump lifts steel and aluminum tariffs on Mexico and Canada. Canada has strongly objected to the continuing tariffs, which has become an issue in its upcoming elections. Trump trade officials believe Chinese steel producers are evading the tariffs by shipping through Mexico.

“The tariffs are going to come off because the president has a good agreement,” Grassley told The Washington Post. “It’s just a matter of his realizing that nothing’s going to happen until the tariffs go off. And so the tariffs come off if he wants to get a win.” Grassley said Trump has refused because he feels the tariffs have revived the domestic steel industry and is insisting on quotas as a fallback when tariffs are lifted.

The AFL-CIO has refused to endorse the trade agreement until the Mexican parliament approves promised labor reforms. House Democrats aren’t on board, either. Speaker Nancy Pelosi said she won’t put the agreement on the House floor until she sees proof of tougher, effective enforcement provisions. 

Liberal Democrats say the deal is a nonstarter because of provisions they say codify exclusive 10-year rights to biologics, which they view as a “total giveaway to Big Pharma.”

Trump officials remain optimistic. Treasury Secretary Steven Mnuchin posed for pictures late last week after a bargaining session with his Chinese counterparts that he deemed “productive,” even as several deadlines have come and gone. The International Trade Commission’s analysis of new NAFTA won’t be completed until mid-April, which starts the congressional clock on approval.

However, negotiations face a political clock as leading Democratic presidential contenders oppose the new NAFTA, heartland farmers grow restive as they see hard-earned global markets evaporate, the US economy begins to show signs of stalling and trade deficits keep climbing.

 

Carter Offers New Year Advice on China Relationship

Former President Jimmy Carter offers advice on how to avoid a cold war with China based on his experience 40 years ago normalizing diplomatic relations with Chinese leader Deng Xiaoping that led the two countries to “become engines of global prosperity.”

Former President Jimmy Carter offers advice on how to avoid a cold war with China based on his experience 40 years ago normalizing diplomatic relations with Chinese leader Deng Xiaoping that led the two countries to “become engines of global prosperity.”

With all the division in Washington, DC, former President Jimmy Carter offered some useful historical perspective on how to find common ground with China, as opposed to putting a “critical relationship in jeopardy.”

Drawing on his own experience of normalizing diplomatic relations with Chinese leader Deng Xiaoping 40 years ago in an op-ed published by the Washington Post, Carter says the key is to identify common goals to address intractable global problems that require leadership by the world’s two largest economic powerhouses.

“While today’s leaders face a different world [than 1979], the cause of peace remains just as important,” Carter says. “Leaders must bring new vision, courage and ingenuity to new challenges and opportunities…. They also must accept our conviction that the United States and China need to build their futures together, for themselves and for humanity at large.”

Carter’s retrospective of his own dealings with China comes with a backdrop of President Trump engaging in a trade war with China. The negotiated 90-day pause in further escalation of the trade war affords an opportunity, Carter says, to recalibrate the relationship and the means to resolve disputes.

“The U.S. imposition of tariffs on $200 billion worth of Chinese good and China’s retaliatory tariffs contribute to the deteriorating relationship, hurting both countries,” he says, which could descend into a Cold War over the Pacific.

Carter recalls that establishing a normalized relationship with China put an end to three decades of hostility and “led to an era distinguished by peace in East Asia and in the pacific Region.” “China’s spectacular economic growth, in conjunction with its continuing integration with the much larger US economy, has enabled the two countries to become engines of global prosperity.”

Political and economic concerns over Chinese economic ascendancy, growing military power and resistance to full democratization can overshadow the opportunities the two nations could pursue together, Carter insists. “The 40thanniversary of this relationship is a testament to the ability of countries with different histories, cultures and political systems to work together for the greater good.”

He urges quick resolution of trade issues, including “trade imbalances, intellectual property theft, forced technology transfers and unfair barriers to US investments.”  Carter dismisses use of “national security” as a reason to obstruct to commercial relationships and claims, “China needs competition for its economy to innovate and grow. Pursuing a fair and reciprocal relationship is the only way for both countries to remain economically strong.”

While he doesn’t say as much in his op-ed, Carter implies that US negotiators must approach their Chinese counterparts differently than, say, European officials. The Chinese view themselves as the oldest nation on earth and the cradle of many of the world’s most important inventions. As such, they bridle at direct criticism and resist confrontational tactics. Cultural sensitivity is a must to get anywhere. Much of the debate over access to the Taiwan Strait and South China Sea can be traced to historical dominance by China of major trading lanes in Southeast Asia and Eastern Africa.

The current government in China is a post-WWII product and the winner of a civil war. While communist in name, China’s ruling party has moved from communal to a form of market-oriented economics, with a strong role for state-sponsored policies. Those policies can be very effective because of Chinese acquiescence to collective goals. However, Chinese officials are mindful that their way of doing business can rub the rest of the world the wrong way. The secret is to find approaches and compromises that don’t offend the Chinese, offer concrete resolutions to legitimate disputes and restore a level of comity between the two nations that will be major competitors and collaborators for the foreseeable future.

For its part, Carter says, the United States should return to the Paris climate accord to strike a collaboration with China on how to decrease greenhouse gas emissions in both the developed and undeveloped world. The US should continue to invite China to play an intermediary role in reducing, if not eliminating, the nuclear threat on the Korean Peninsula. And, the two countries should work hand in hand to develop Africa economically in ways that enrich its citizens, not dictators.

Other forms of collaboration might include joint space research. The Chinese currently have a robotic space probe on the dark side of the moon, the first such probe by any nation. Current US policy forbids exchange of space technology with China. A new space race would be costly and counter-productive, while collaborative efforts may advance knowledge and eventually colonization of the moon and Mars much faster. They might even have a benefit on earth, as the Chinese have announced plans to launch a man-made moon, which is actually a gigantic mirror designed to provide lunar lighting that cuts heating bills.

The two nations also could team up to deal with cyber-terrorism. Intelligence suggests there are state-sponsored cyber-hackers in China. An improved relationship with China may turn hacking into common defense against hackers and disinformation agents. While China still has censorship, its citizens are increasingly exposed to foreign ideas and ideals. Its economic aspirations lie closer to the United States than Russia, which could be persuasive for Chinese officials to join US efforts to combat Russian interference designed to create division and dysfunction.

As has often been the case in his post-presidency, Carter offers plenty to chew on in the new year. One of his signal achievements as President serves as a useful, timely reminder that the harder road to take can be the most productive – and peaceful.

 

‘America First’ Policies Raise Questions about US Leadership

President Trump’s ‘America First’ policies have played well with his political base, but not so well with global leaders as tensions are growing over the specter of spiraling trade war with consumers at home and abroad likely to pay the price.

President Trump’s ‘America First’ policies have played well with his political base, but not so well with global leaders as tensions are growing over the specter of spiraling trade war with consumers at home and abroad likely to pay the price.

One of the unintended successes of President Trump’s ‘America First’ policies has been to galvanize the European Union, Japan and China to preserve and bolster multilateral trade, regulatory and security arrangements Trump disdains.

“After months of denialangerbargaining and depression, Europe and other parts of the world have accepted that Mr. Trump and his mission of disruption are not going away,” reports The New York Times.

Accounts suggest foreign leaders are stunned by Trump’s continuing attacks on traditional allies, cozy relations with Russian President Vladimir Putin and seeming disavowal of America’s role as the leading advocate of a liberal world order.

EU leaders are especially astonished at being referred to as “foes.” In June, 29 EU ambassadors to the United States sent an open letter to Trump in defense of free trade and investment policies.

“Together, the US and EU have created the largest and wealthiest market in the world. The transatlantic economy accounts for half of the global gross domestic product by value, which directly supports more than 15 million high-quality jobs and $5.5 trillion in commercial sales. And nearly one-third of the world’s trade in goods occurs between the EU and United States alone,” the letter said. The ambassadors added that EU investment in the United States exceeds US investment in Europe.

EU leaders, despite qualms about Chinese trade practices that mirror Trump’s, have met with Chinese leaders without US involvement. According to the Times, the “summit meeting produced an unusual joint declaration and a common commitment to keep the global system strong.”

The EU then signed what has been described as the largest free-trade agreement in history with Japan, again with no US involvement.

Now, the EU is preparing “whopping tariffs” in response to proposed Trump tariffs on items such as German-made cars, noting that 45 out of 50 US states export more goods and services to Europe than China, totaling around $500 billion in 2016.

GOP Senator Ben Sasse from Nebraska may have spoken for the wave of critics who think Trump’s tariffs are undermining US exports that have taken years to cultivate and who believe his proposed $12 billion package of one-time financial aid to farmers won’t come close to co vering the long-term damage done by the tariffs.

GOP Senator Ben Sasse from Nebraska may have spoken for the wave of critics who think Trump’s tariffs are undermining US exports that have taken years to cultivate and who believe his proposed $12 billion package of one-time financial aid to farmers won’t come close to co vering the long-term damage done by the tariffs.

On the regulatory front, the EU fined Google $5.1 billion for antitrust behavior, which drew a sharp rebuke from Trump. Google plans to appeal the EU ruling, but it may be forced to reckon with it in the marketplace in the meantime.

Interestingly, the basis for the fine echoed an unusually American-sounding rationale. “Google has used Android as a vehicle to cement the dominance of its search engine,” Margrethe Vestager, Europe’s antitrust chief, told the Times. “These practices have denied rivals the chance to innovate and compete on the merits. They have denied European consumers the benefits of effective competition in the important mobile sphere.” 

European Commission President Jean-Claude Juncker travels to DC this week to discuss the deteriorating EU trading relationship with Trump officials.

Meanwhile, the impact of tariffs is beginning to be felt. The Associated Press carried a story last week about the stress felt by US soybean farmers, who are a target of retaliatory Chinese tariffs. One soybean farmer said he already has lost $250,000 in value for his current crop. Soybeans on the Chicago Board of trade have dropped $2 per bushel in value. Farmers interviewed say they still support Trump, but want to know what the end game is.

The Oregonian posted a story last week listing five Oregon exports at risk in a spiraling trade war with China. Noting Oregon exported $3.5 billion worth of goods to China in 2017, the article said the most vulnerable are:

  • Computer and electronic products ($2.1 billion)
  • Machinery ($435 million)
  • Chemicals ($363 million)
  • Transportation equipment ($262 million)
  • Agricultural products ($235 million)

Oregonian reporter Mike Rogoway provided a more comprehensive look at Oregon exports in a piece published in June. Among the interesting statistics Rogoway uncovered: 87,000 Fords produced in the United States were exported through the Port of Portland, 90 percent of which headed to China.

US business interests also remain frustrated at Trump efforts to negotiate changes in the North American Free Trade Agreement, which appear to have stalled and made more difficult by the election of a leftist president in Mexico.

Global tensions are growing over the budding trade war, as reflected by a statement coming out of the G20 meeting held in Argentina over the weekend. US Treasury Secretary Steven Mnuchin attended the meeting and agreed to sign the joint statement.

Mnuchin acknowledged what he called “micro impacts” caused by the Trump tariffs, but defended them as a pathway to freer trade that is fair to the United States. News reports said Mnuchin and Chinese finance officials conversed during the 2-day meeting, but only engaged in “chitchat,” not serious negotiations.

There are harsher judgments of Trump’s policies. WorldPost editor Nathan Gardels. wrote, “The ‘American First’ president who denigrates democratic allies as foes is no longer the leader of the free world….Trump appears to be not even the leader of the United States.”

 

Zig-Zagging Trump Trade Policies Put Northwest on Edge

Trump trade policies seem destined to trigger a global trade war, which could have a serious economic impact on the Pacific Northwest that relies heavily on export of airplanes, machinery, technology, agricultural products and services. Disrupted trade also could harm  manufacturers with supply chains throughout the Pacific Rim.

Trump trade policies seem destined to trigger a global trade war, which could have a serious economic impact on the Pacific Northwest that relies heavily on export of airplanes, machinery, technology, agricultural products and services. Disrupted trade also could harm  manufacturers with supply chains throughout the Pacific Rim.

The Pacific Northwest is especially dependent on international trade and the threat of a global trade war has many business leaders on edge. Perhaps none more so than at Daimler Trucks in Portland that employees more than 2,000 workers who are mostly engineers.

Despite some mixed signals, President Trump has moved ahead to impose a 25 percent tariff on imported steel and a 10 percent on imported aluminum. He also has singled out Mercedes-Benz for an outright ban on imports, citing national security and his personal angst at seeing New York’s Fifth Avenue clogged with the popular German luxury car.

Mercedes-Benz manufactures SUVs, GLE coupes and C-class cars at its Tuscaloosa, Alabama plantBMW manufactures luxury cars in Spartanburg, South Carolina, which the company says produces 1,900 vehicles per day, the highest daily output of any BMW car plant in the world. Spartanburg is the exclusive manufacturing site for BMW’s X-class vehicles, which are exported worldwide.

For Oregonians, a greater concern would be the impact of Trump’s tariffs on Daimler Trucks, which maintains its North American headquarters in Portland. Much of the company’s truck manufacturing has been shifted to the Southeast and Mexico. What largely remains in Portland are corporate teams and engineers “designing the future of commercial vehicles.”

Daimler Group is the corporate parent for Mercedes-Benz Cars and Daimler Trucks.

President Trump has singled out German car manufacturer Mercedes-Benz, which is a sister company to Daimler Trucks that manufactures and designs commercial vehicles at its North American Headquarters in Portland

President Trump has singled out German car manufacturer Mercedes-Benz, which is a sister company to Daimler Trucks that manufactures and designs commercial vehicles at its North American Headquarters in Portland

Officials at Daimler aren’t alone in fretting about fallout from a potential trade war. The Seattle Times quoted officials from the aluminum and agricultural sectors, as well as union officials, raising alarms about impacts from tariffs on multi-country supply chains, direct exports and price increases that could affect everything from Boeing airplanes to new housing. A Seattle homebuilding official said higher tariffs on steel could increase the price of a new house by up to $5,000.

Depending on how China and the European Union impose reciprocal tariffs, emerging markets pursued by Northwest exporters such as winemakers could be squeezed. Tariffs slapped on by Mexico and Canada also could have disruptive effects.

In addition to the tariffs, what baffles and irks US trading partners is the unpredictability of Trump's trade policy, if it can be called a trade policy. Negotiations occur, agreements are reached and then Trump goes in a different direction, as he did with the bilateral trade deal struck with South Korea and with the Chinese talks two weeks ago.

Trump’s trade steps also raise hackles on Capitol Hill. Many Trump supporters were stunned when he agreed to back off punishment that the Chinese said could force the collapse of ZTE, a huge telecom company facing charges of ignoring US export sanctions imposed on North Korea and Iran. A Texas court fined ZTE $1 billion and ordered it could not receive any US-made components and software for seven years.

EU officials, who share US concerns about restrictive Chinese industrial policy and alleged intellectual property theft, have urged the Trump administration to form a united front on policies and negotiations aimed at winning major concessions from the Chinese.

However, Trump’s mistrust of multilateral arrangements appears to drive his actions. Despite warnings from economists, Trump has put trading relations with Canada, Mexico, China, South Korea, Japan and the European Union in a state of flux. Reciprocal tariffs are being imposed and talks about updating existing trade deals have stalled.

Trump’s nationalist trade policy may win applause in steel-producing states, but could trigger discontent and growing fears of an economic slowdown in the rest of the country as crucial midterms approach this fall that will determine who controls Congress for the next two years.

The Renewed Nuclear Arms Race We Aren’t Discussing

The threat of terrorist attacks is more top-of-mind for Americans than an accelerating nuclear arms race by Russia, China and the United States involving smaller, more precise nuclear weapons that could put the entire world on higher alert.

The threat of terrorist attacks is more top-of-mind for Americans than an accelerating nuclear arms race by Russia, China and the United States involving smaller, more precise nuclear weapons that could put the entire world on higher alert.

Americans worry about the threat of terrorism while being largely unaware of an accelerating nuclear arms race involving Russia, China and the United States.

To the extent nuclear weapons are discussed, it is in the context of the Iranian nuclear deal, North Korea’s relentless efforts to join the nuclear club and a fear that ISIS will grab nuclear material for a so-called dirty bomb. A reignited nuclear arms race between world powers, including the United States, remains in the shadows of a presidential election and public debate.

The topic was brought into the daylight by a recent New York Times article that reported, “The United States, Russia and China are now aggressively pursuing a new generation of smaller, less destructive nuclear weapons.” 

The report added ominously, “The buildups threaten to revive a Cold War-era arms race and unsettle the balance of destructive force among nations that has kept the nuclear peace for more than a half century.”

Sobering stuff. It underlines the need for a calm hand, not a twitchy finger in the White House. It also may be why GOP presidential frontrunner Donald Trump hasn’t repeated his seemingly off-the-cuff comments about helping Japan and South Korea secure nuclear weapons.

The new nuclear race has less to do with building larger bombs than the stealth of surgically delivering smaller ones. The Russians have topped big missiles with miniaturized warheads and are developing an undersea drone that can loft a city-smothering radioactive cloud. China is reportedly flight-testing a nuclear warhead that can be mounted on a hypersonic glide vehicle, which would maneuver in space, then twist and careen toward its intended target on Earth. 

The Times report says the United States is also testing a hypersonic weapon and modernizing its nuclear arsenal with "small, stealthy and precise” weaponry that can evade nuclear missile defense systems and pinpoint targets. U.S. officials aren’t denying what’s going on, but they also aren’t playing it up.

After World War II, the Cold War race to stockpile ever-larger bombs on longer-distance missiles was based on the “grim logic” of mutual assured destruction, which meant if someone launched an attack, there would be a massive counterattack that would destroy great swaths of the planet. The outcome was so horrifying, it became its own effective deterrent.

Now, the prospect of less destructive and more precise nuclear weapons could tempt somebody to try them out. Some military experts say miniaturized nuclear weapons could deter terrorist groups, though nuclear arms critics would contend their use could feed the radical vision of ISIS for some kind of apocalyptic battle. 

Development of a new generation of nukes at the moment has more to do with geopolitical anxieties, such as Russia’s flirtation with Soviet-style aggression and China’s ambition to solidify its place as a world power. Russia’s expansion into Crimea and China’s land claims in the China Sea serve as present-day reminders of the tensions that underlie nuclear expansion and modernization and cause all three countries to point fingers as to who’s is responsible for a new nuclear arms race.

The Times report notes that Washington and Moscow have kept their respective nuclear forces on high alert to allow a rapid response if an incoming strike is detected. China is apparently on a path to upgrade its early warning system, raising the overall stakes of a “launch on warning” mistake that triggers a nuclear free-for-all.

Arms control advocates feel like middle managers in a modern, fast economy with little effective role in addressing a rekindled Cold War escalation. The Times quotes Mark Gubrud, a nuclear weapons expert, as saying, “The world has failed to put the nuclear genie back in the bottle and new genies are now getting loose."

No Nap for a Superpower

Most Americans would like to withdraw from international contretemps, but the rest of the world isn't cooperating. American involvement is in demand across the globe.

Nowhere is American fatigue deeper than with the Middle East. We fought two long, expensive wars and a majority of Americans want to put them in the rear-view mirror. That doesn't seem likely.

Secretary of State John Kerry brokered a deal to audit all the ballots cast in the recent Afghan presidential runoff, avoiding at least for now a splintered national government, which could give the Taliban hiding in the hills an opportunity to make a political or military comeback.

Iraq continues to disintegrate, forcing President Obama, who campaigned on getting America out of the country, to consider going back in. He already has consented to send up to 1,000 military advisers to Iraq and is applying pressure to install a national unity government that can woo back disaffected Sunnis and opportunistic Kurds.

The United States is playing a lead role in fragile, emotionally charged negotiations on Iran's nuclear capabilities. There is a small window for Iran's new government to compromise in return for a significant relaxation of economic sanctions. Direct dialogue with Iran may have side benefits in trying to quell Sunni-led terrorist insurgency in Iraq.

Kerry Cuts Video to Explain Iran Deal

Secretary of State John Kerry appealed to a wider audience than the Washington, DC talking heads of television with a video explaining the nuances of the nuclear agreement between world powers and Iran.

Amid mounting criticism of the 6-month agreement by Israel, the Saudis and leading members of Congress, Kerry gave a fairly straightforward account of what he called the "first-step" agreement to a comprehensive pact with Iran to restrict its ability to develop a nuclear weapon.

The video, which lacks a lot of professional touches, features Kerry talking into a camera and explaining the deal in reasonable detail, especially involving Iran's current and projected capacity to generate the fuel for a nuclear bomb.

While the video won't silence domestic or international critics, it does represent an intriguing move to make complex foreign affairs accessible to anyone interested enough to take five minutes to listen.

On the other side of the world, Iran has deployed social media to explain its side of the deal, which includes relief from some economic sanctions that have strained its economy.

Israeli Prime Minister Benjamin Netanyahu flexed his access to major television network news outlet to express his misgivings with the deal, while the Saudis and Sunni Arab Gulf monarchies let their allies know through trusted channels of their displeasure with a pact involving Shiites.

The United States has never been adept at triangulating foreign policy conundrums that don't resolve themselves in black and white, but shades of gray. The politics and alliances, visible and invisible, of the Middle East are anything but black and white.

Fumbling Away Home Field Advantage

Sports teams know the value of a home field advantage. They do everything they can to preserve it. The U.S. Congress appears on the verge of making an unforced turnover that could surrender our advantage as the global reserve currency.

Even though a handful of conservative lawmakers believe defaulting on the national debt is no big deal, financial leaders around the world think it is. They are beginning to question the stability of the mighty U.S. dollar.

Not waiting to find out if Congress can manage an 11th-hour deal to avoid debt default, the Chinese called for replacing the dollar as the world's reserve currency, citing the "pernicious impasse" on Capitol Hill.

The European Union has sounded alarm bells about the financial crisis that could occur if the United States falls into a technical default later this week. Its central bankers also seized on the occasion to return the lectures American officials gave them during the EU's most recent financial difficulties, saying the United States needs to "get its act together."

The British, our best friends in Europe, haven't been as snarky as other Europeans, but just cut a deal to serve as the main offshore hub for trading China's currency. It is step toward the Chinese yuan taking its place as a world currency. According to a Reuters report, London and Beijing also agreed to allow the yuan to be traded against sterling directly, rather than through the dollar, thereby reducing transaction costs. 

Economists say there is no real alternative to the dollar as the world's gold standard. But the conversation going on around the globe about "de-Americanizing" the world economy should be sobering to Americans.

Like sports team, there are definite advantages to being the world's reserve currency. One of the biggest is reduced transaction costs when an export or import is made with dollars in or dollars out. There also is less risk of currency valuation fluctuations that easily can turn a profit into a loss. Of course, the most significant benefit is attracting investment from around the world, which comes in handy when running domestic fiscal deficits and foreign trade imbalances.

Political Chicken and Economic Checkers

The continuing federal government shutdown and looming debt crisis kept President Obama from attending critical Asia-Pacific trade meetings and perhaps signaled the United States is a less reliable partner than China.The empty American chair at the Asia-Pacific Economic Cooperation meeting in Indonesia speaks of significant external damage wreaked by the continuing federal government shutdown and debt ceiling showdown.

Even though Secretary of State John Kerry replaced President Obama, the absence of our top gun was unmistakable. It left China to dominate this stage and set many Pacific Rim officials to wondering about the financial and political reliability of the United States.

While U.S. politicians bicker over universal health care and domestic spending levels, Asia-Pacific leaders at the meeting talked about the pain of the global economic crisis and the ambitions of the region to become the world's economic engine. They were talking about job creation on a hemispheric scale. 

Before he canceled his trip to remain in Washington while the government was shut down and a fiscal crisis loomed over the debt ceiling, Obama planned on touting a Trans-Pacific Partnership, which The New York Times described as "a trade bloc led by the United States and excluding China." Complex negotiations were to be completed by the end of the year, the newspaper said.

The partnership is intended to address "all economic sectors from intellectual property protection to agriculture to automobiles," The Times reported. It is part of the Obama "Pacific pivot" to focus more energy on building stronger ties in a region with huge potential for economic growth.

What's Really Behind U.S. Inaction in Syria

There are potent reasons why President Obama has delayed a response to the Syrian government crossing his red line and using chemical weapons on its own citizens.

Risking a deepening image of presidential dithering, Obama continues to search for a measured response that doesn't repeat mistakes made by the United States in the 1980s in Afghanistan and further strain relations with Russia, which continues to protect the Bashar al-Assad regime. 

This week's report of a chemical weapon attack that may have killed as many as 1,500 Syrians makes Obama's tightrope walk even trickier.

The Washington Post's Max Fisher posted a blog listing five reasons for what appears as Obama inaction. First and foremost is the fear that the rebels, some of whom have affiliation with al-Qaeda, could be worse than the current regime. The United States learned that lesson when it sided with Afghanistan militants in resisting a Soviet invasion. The Russians got repelled, but the United States got sucked into a prolonged war against the Taliban and, at times, with the ruling Karzai government, purportedly a U.S. ally.

Obama's widely ridiculed "lead-from-rear" strategy in Libya resulted in a regime change. But it also resulted in a politically embarrassing episode with a militant attack on the U.S. consulate in Benghazi on the eve of the 2012 presidential election. You can understand Obama's hesitancy to burst in on another party where the United States will inevitably be the piñata.

Fisher says there isn't much political advantage for Obama to become bogged down in Syria, despite his red line ultimatum. He already is accused of public policy attention deficit for jumping from issue to issue. Now Obama, as evidenced by his 2-day bus trip to promote his college affordability agenda, is trying to focus on a few longer-term economic priorities.

California Dreamin' on High-Speed Rail

The Japanese built a bullet train in the 1960s. Europe soon followed suit. Now California lawmakers have approved spending $8 billion to prepare the first 130-mile stretch of what in the future could become a West Coast high-speed rail corridor.

Approval came despite severe fiscal pressures and the negative votes of senators who sit on the high-speed rail project. Senator Joe Simitian, D-Palo Alto, called the first $6 billion leg between Merced and Bakersfield "the wrong plan, in the wrong place, at the wrong time."

But supporters such as Senator Juan Vargas, D-San Diego, said high-speed rail is like "the things that dreams are made of." If everything stays on track and another $20 billion can be scrounged, service won't begin any earlier than 2022.

Boondoggle or dream, the project hasn't cleared every hurdle. California voters must approve a $10 billion bond measure this November. The ultimate high-speed line stretching from San Francisco through Los Angeles to Anaheim carries a price tag of $69 billion. California officials hope to acquire half that amount from the federal government and $13.1 billion from private sources.

The price tag for a high-speed rail line running the entire length of the West Coast from Vancouver, B.C. to San Diego seems unfathomable. But, as California Senate President Pro Tempore Darrell Steinberg, D-Sacramento, said, "Ten, 20, 30 years from now, Californians will be glad we made the decision and we have a 21st century transportation system."

Last week's vote also included $714 million to upgrade local transit lines to connect to high-speed rail and electrify the Caltrain between Sacramento and San Francisco. To sweeten the deal, $500 million was added for commuter line upgrades in Los Angeles.

Japan invested in a bullet train to move people faster in a congested corridor, without increasing oil imports. With construction expedited before the 1964 Olympic Games, the first intercity route began with 12 cars per train, each seating 150 people and reaching average speeds exceeding 101 miles per hour. The bullet train attracted 100 million passengers in its first three years of operation and reached 1 billion passengers in 1976. Japanese bullet trains now are larger, with 16 cars, reach speeds exceeding 300 miles per hour and traverse 1,484 miles of track.

Regular high-speed rail service began in Europe in 1965 between Paris and Toulouse. Great Britain introduced high-speed service, followed by more lines on the continent. Spain's first high-speed line opened in 1992 between Madrid and Seville. It now plans Europe's most ambitious high-speed rail expansion.

Hacking the Chamber of Commerce

Instead of hacking into its computers, it might have been easier to snap a photo of the U.S. Chamber of Commerce's main message, hanging from huge banners facing the White House. Photo by US Chamber.On the same day a Goldman Sachs economist described the Chinese Communist Party as a "chamber of commerce," a group of Chinese hackers were uncovered eavesdropping on the U.S. Chamber of Commerce.

Fabled magazine publisher Henry Luce famously lamented the loss of China to Communists by noting "Communism is the most monstrous cancer which ever attacked humanity." Now it is just attacking computers.

ABC News reported the hackers, allegedly aided by the Chinese military, have been sneaking peeks of U.S. Chamber of Commerce computers for more than a year. Maybe they are looking for a blueprint of how to act more like a chamber of commerce.

Jim O'Neill, an economist with Goldman Sachs, told NPR that in his 21 years of observing the Chinese, he concluded that while it is a run by a "Communist Party leadership, it's almost more like a chamber of commerce than a political party."

Holt: Giving Hope to Homeless

Few people realize, and I myself was unaware before my recent trip to Asia, that the roots of international adoption grew out of a farm in Creswell, Oregon.

In December 1954, Harry and Bertha Holt of Creswell saw a documentary film showing children in Korean orphanages following the Korean War. Unbeknownst to the Holts at the time, the screening of the documentary would inspire them to change the lives of hundreds of thousands of homeless children worldwide.

Caption: CFM’s Ali Santore recently traveled in Asia with the Holt International Children’s Services.