 We met last year some of us in this group and it was just after the American election and we have now have 10 months of the Trump presidency, so we can compare what he's actually done as president with what he hinted he might do when he was a candidate. And so what I want to do is spend some time on that comparison but before I do that I want to answer your question about the S&P and Moody downgrades of China and to make it simple these firms do not know what they're talking about. I've had experience with them for over 30 years. One of them involved the Korean crisis in late 97-98 and you may remember or not that S&P downgraded Korea at that time by several things after the crisis broke. And it indicated to me because I'd just been spending some time on the Korean economy that these two institutions or I'm talking about S&P in particular did not know what they were talking about. They had no notion of the Korean public and sentiment toward debt repaying as it is pejoratively sometimes said they're run by 40-year-olds supervising 25-year-olds and they run their models which may be inadequate typically are limited by data and they just don't know much about what they're doing. They downgraded the U.S. debt in 2011. We have serious, serious problems in the United States but not paying the U.S. public debt is not one of them and won't be in the foreseeable future. And I think the downgrading of China's debt is trying to correct for their mistakes on the upside in grading mortgage-backed securities too highly in 2006 and 2007. So general lesson, don't pay much attention to their ratings, at least their sovereign ratings. By the way they were not very good on Greece either. It was after the crisis that they downgraded Greece. Anyway that's a side comment on this. I attached zero significance to this downgrade in terms of their understanding of the Chinese economy. It's based probably I don't know the model just on the high debt levels in China by developing country standards without looking at what the debt is as she told us yesterday. It makes a difference actually who holds it and what it is and so forth. Back to Trump. As I said, or I hope I said last time, Trump campaigned on slogans. What I call slogans are sentiments, tweets, and unexpectedly he became president. And then he faced the challenge of translating slogans into policy. And that turns out to be a big, big problem in general. I'll come back to BRI at the end and China has the same problem by the way. So what I want to do is say after 10 months, how is Trump responded to his campaign sentiments. And I guess the first surprise is that he actually took them seriously. And he has made attempts to translate these slogans into policy. And I want to divide my observations into four headings. And I'll give just a few illustrative examples under each heading where he's tried and succeeded in translating his slogans into policy. Where he tried and failed to translate the slogans into policy. Where he actually reversed his position or his administration did with his acquiescence. And fourth issues that are still open even after 10 months in the administration where we don't know. And by the way, none of these issues is closed. All of them continues to be open, but I'm going to classify it anyway. Under the first heading, attempts which were successful, the first, in the first week he said publicly, and no big surprise, he was not going to submit TPP to Congress for enactment. And under the arrangements of the Trans-Pacific Partnership, he needed to do that to get it. No guarantee that it would go through the Congress, but he said he was not going to submit it. So in effect, the U.S. withdrew. And that was no surprise. He said it was a terrible agreement. He used that phrase for actually many agreements. And so that was one early on. With a five-month flag, he also said, although he hasn't done it formally as far as I know, he was going to withdraw from the Paris Agreement. There was much more discussion within the administration over doing that. But anyway, he did it at the end or indicated he would withdraw from the, he was not going to follow the Paris Agreement. And so those are two examples where he said, indicated, expressed sentiments about these issues during the campaign and he followed through successfully. Under the second heading, where he expressed sentiments and followed through unsuccessfully, again mentioned two. One conserves immigrants from Muslim countries. Muslims, it's well understood, are terrorists and he didn't want terrorists into the country. And so he decreed by executive order that seven countries, citizens of seven countries, no matter where they were living, but citizens of seven countries could not enter the United States for 120 days, so it was limited. Within a week, that executive order was suspended by a district court judge. And that was a big shock to Mr. Trump. He discovered that the judges, the federal judges, don't work for him. The order was very badly drafted. They came out, I guess three weeks later, with a much better drafted order and they reduced the number of countries to six. And a different set of judges declared that was invalid also. The argument was, by the way, the merits of the case was not decided by these judges. The judges said, this sounds to me like it's unconstitutional. And therefore I'm suspending the order, which they can do, and the courts will decide later whether it's actually unconstitutional. But we don't want an unconstitutional order to go into effect. So that's the American system. And then a second issue concerned an entirely largely domestic issue. The Affordable Care Act passed under President Obama in 2010. Hugely controversial, especially among Republicans, wide sentiment for repealing it. After the election, but before he became president, he revised his verb from repeal to revise, which itself was interesting. And then he challenged the Congress to revise it. And again, I won't take you through the many agonizing details, but the Congress failed. In particular, the Senate failed. And so President Trump discovered that not only do the American judges don't work for him, the American Congress doesn't work for him. Being president of the United States is a very high status position with very limited authority, actually, under the system of American checks and balances. The issues where he reversed his position first concerned the U.S. alliances. He said in the campaign that NATO was obsolete. He didn't use that term as far as I know with respect to Japan and Korea. But he implied that they were also obsolete. It's worth noting here that this Trump position agrees with the position, as I understand it, of the Chinese government, which is that these military alliances were relics of the Cold War, and they were, to coin and term, obsolete. So Trump actually agreed with the Chinese position on this. But we have a big security conference in Munich, Germany every year. Every March, maybe Doug went to it. I didn't go to it. But Mattis, Defense Secretary, Mattis went to it. And Pence also traveled to Europe. And both of these senior officials said, well, created a love fest with NATO. And then Mattis also later traveled to East Asia, Japan and Korea, and also said these are very fine alliances. And of course, our partners have to pay more, to be sure. But these alliances are very fine. So Trump actually never, as far as I know, repudiated his sentiment of the campaign, but his administration did with his presumed acquiescence. And so that's an issue of reversal, I call it, of his campaign slogans. And a second example directly concerns China. Trump said in the campaign that he was on his first day in office. If elected, he would declare China a currency manipulator. He said that in the campaign. The first day went by. The first week went by. The first month went by. No comment on China's currency manipulation. Then a astute journalist asked the new Secretary of Treasury, what about this China being a currency manipulator? And Secretary Munchkin responded by saying, we have a well-ordered process for making such judgments. Treasury report will be out at the end of April and will decide then. And the report duly came out at the end of April. And China was not declared a currency manipulator correctly in my view on the substance of it. So again, Trump did not actually repudiate his earlier statements, but his administration did. Again, I assume with his acquiescence or maybe even lack of knowledge. I'm not sure. And the issues that are still, my fourth category is the issues that are still open. And again, a major domestic issue with some international implications is tax reform. And that is the current top agenda of the administration with the Congress during the course of the fall. They hope to get a major tax reform and tax reduction by the end of the year. And so that's currently very much in the discussion in Washington and in the American business community, especially. We don't know how that's going to come out. And it does not concern this seminar especially. And I can talk about the likelihoods if you want to. Much more directly applicable here is Trump's trade policy toward China. And I think I may have mentioned last year, I will, I don't remember, but I will mention it again. I'm sure that most of Trump's statements during his campaign with respect to China were well reported in Chinese newspapers and on the TV. What I'm equally sure of is that his even worse statements about Mexico were not reported in China. So Chinese in Trump's view is terribly behaved, but much less worse, badly behaved than Mexico was. That was probably not reported in China, but China's only second in Trump's list of countries to condemn. He has since, by the way, one of the condemnations was on the trade surpluses of those China and Mexico with the United States. He has since added to that list, Canada, Germany, and I was told Korea, although I haven't seen that actually myself, Korea has been added to the list. So China has lots of company. In fact, one of our panelists yesterday said, or maybe it was today, 100 countries have trade surpluses. You said that with the United States. And then we can go into the analytical merits. Trump has just lacks fundamental understanding of both about the system we have and about the accounting that is associated with trade surpluses and deficits. So this is just a huge conceptual mistake that he's engaged in. But apparently I'm told by Doug that it's been on his mind for decades. It was not just a recent one. It goes back some decades. He has, or his administration on his instruction has activated, that's actually not quite the right word, but investigated, three rarely used clauses which give the president some authority under American trade legislation. Back up a minute under the U.S. Constitution, the real policymaker in the United States is Congress. The president only executes the laws. But Congress from time to time delegates authority to the president and under the trade legislation going back 40 years to 1974, the president has certain authorities with respect to trade, which he has had investigated. But what's noteworthy is that he has taken no action so far in these trade issues except to open a revision of NAFTA beyond the TPP rejection. And again we could go into the details about why there's been no action. But the point for us here is we still don't know what the trade policy is going to be. I've been around long enough to see many trade negotiations and we won't know about the NAFTA renegotiation until it's done. The guidelines that presented initially were not bad. In fact, they were drawn from TPP ironically. But our chief negotiator has said a number of quite aggressive things publicly, whether that's for show or whether it's real or whether it will materialize, that remains to be seen. So this issue, remember in the campaign, he said at one point 45% duty on Chinese goods. We've seen nothing like that. But we don't know. It's still too early to tell even 10 months into the administration what his trade policy will be. He has been heard to have said, at least on four occasions, involving very different issues across the area of policy. That's a much more complicated issue than I thought it was. And that's what he's discovering. Slogans are not policy. And a complicating feature is that he has been very, very slow to appoint the officials, and the American president can appoint many officials with Senate confirmation. He's been very slow to appoint the officials who actually frame policy in the United States. Decisions are at the top, but the policy gets framed not by the civil servants, typically by assistant secretaries and undersecretaries and deputy assistant secretaries. And many of those positions are vacant. So he's not getting full information about policy options. So that's just a complicating factor. I will just finish by saying, talking about BRI, because we haven't colluded, but I agree with Doug. I was one of those who was appalled when Obama or his unnamed official objected to AIIB having been involved in the creation of the ADB 50 years ago, I thought it was a very positive initiative. And so it has turned out to be so far. It's still at its early stages. BRI, so that, anyway, that's now in being, BRI was announced by President Xi four years ago in 2013. Yeah, four years ago. And I'm told, I guess I don't read Chinese, but I'm told it's a famous Chinese four character slogan. And I tried at the time to find out what it meant. And I failed. And the Chinese and maybe both of you have been involved in it. I know lots of Chinese academics and think tanks have been involved in filling out what now called BRI one belt one road might actually look like. I know that at least some things that long predated BRI were included in it, although they were started years and years ago. And before the May conference this year, in which there was a very elaborate summit conference, I mean, there was a frenetic activity to find out what it might include. And it's gradually settling down. Statements have been made about financing and soon we'll hear about some of the projects other than the ones that were started years ago. But again, it's, it's complicated for China also, as well as for the United States to translate slogans into policy. It takes a long time and lots and lots of thought. But potentially, I think it's a good idea. And I think the US government should say, we, you know, there are a lot of Americans who are very suspicious that you read the literature of political scientists. Very suspicious. This is a Chinese strategic grab, whatever that means. And I say, let's embrace it and emphasize the positive. These are poor countries to the west of China. They can use some help if China is willing to do the financing. We should applaud it.