As we've discussed over the past week, among the objectives in Trump's negotiations with global trading partners in the coming weeks and months, may be coordinating a global effort to put China in the global trade "penalty box" – a global retaliation against China's multi-decade predatory economic strategy.
According to a piece The Wall Street Journal ran today after the market close, that is indeed the plan. And they say Bessent is leading it.
So, Trump has quickly drawn most of the world back into alignment with the U.S., using the U.S. consumer as leverage.
And now it's said that they will "extract commitments from trading partners, to isolate China's economy for reductions in trade and tariff barriers."
With that, let's take a look at how this is shaping up, and how it might end in another Plaza Accord type of moment.
Back in my November 25th note, (here), when Bessent had just been named Trump's Treasury Secretary nominee, we talked about the dealing with China issue, and some of Bessent's pre-nominee comments, particularly where he made the case for a "large scale globally coordinated currency, fiscal and monetary" agreement.
And the case was largely centered around China, China's predatory trade practices, driven by its manipulated (weak) currency, which has resulted in massive global trade imbalances, and China's accumulation of the world's largest pile of foreign currency reserves ($3 trillion).
With that in mind, Trump's Chairman of the Council of Economic Advisors is a guy named Stephen Miran. He wrote a report on "Restructuring the Global Trading System" in November of last year. A month later, Trump picked him to be his top economist.
Within his guide to restructuring global trade: A "Mar-a-Lago Accord."
Here's what it looks like: Leveraging tariff threats and the United States' role in global security and financial stability, the plan includes our trading partners "burden sharing."
In this case, the dollar's role in the world as the reserve currency provides benefits to the world, and benefits to the U.S. but also drives persistent and unsustainable U.S. trade deficits.
So "burden sharing" means, accept tariffs or open your markets, boost your defense spending and buy more from the U.S., invest in American manufacturing, and buy our Treasuries.
The "Mar-a-Lago Accord" idea seem to be materializing. And it seems that isolating China will be part of it.