Trade Negotiations with China Are Still On, After Trump’s Tariff Threat

White House Aides’ Trips to Moscow Signaled Putin-Trump Phone Call

Even FBI’s Peter Strzok Suspected CIA of Lying Leaks to Media

House Democrats Have Mueller Scheduled To Testify May 15

Chinese Ambassador to Berlin Slams China-Bashing in Frankfurter Allgemeine Interview

U.S. Navy Provokes Beijing in South China Sea Again

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EDITORIAL

Real U.S. Infrastructure Investment Demands Over $10 Trillion

May 6 (EIRNS)—Schiller Institute President Helga Zepp-LaRouche, in her webcast May 5, stated that the $2 trillion of new spending U.S. infrastructure discussed by President Donald Trump and Democratic leaders April 30 was very far short of the investment needed. The American Society of Civil Engineers (ASCE) estimated a $4.5 trillion need just for renovation; the former head of China Investment Corporation proposed $8 trillion; and Zepp-LaRouche herself, based on comparison with China’s building of new infrastructure, guessed the need could be as high as $20 trillion. What would it be, if the demand were for recovery and renovation of the productivity of the economy, using the touchstone of Lyndon LaRouche’s “Four Laws” to save the nation?

The well-known ASCE estimate of $4.5 trillion is what the Society estimated to be necessary in added investment, not total investment. Public infrastructure spending currently is about $200 billion/year, with only 30% of it being Federal spending. So the ASCE is really requiring over $5 trillion in Federal investment. Moreover, the attrition rate of U.S. infrastructure expressed in financial accounting terms—annual depreciation—is $100 billion/year, despite what is currently being spent, according to the National Bureau of Economic Research. That brings the demand to $6 trillion. In addition, many, many infrastructure facilities are so ancient that they have long stopped depreciating and adding to that attrition estimate—the Portal Bridge and Hudson Tunnels, for example. Yet they, all the more urgently, must be replaced, easily bringing that needed investment to $8 trillion or more over a decade.

These costs, however, are all within the domain of renovation, replacement of basic economic infrastructure at the existing level of technology and integration—replacing elements, rather than systems of platforms. The White House’s and other “top 50” or “top 25” projects are all extremely discrete—a replaced lock or bridge here, a new tube there. Costs are dominated by three sectors: The road and bridge system (ASCE: $850 billion without ports or rail); the water management/water supply system (ASCE: $400 billion); and the electrical power grids (ASCE: up to $2 trillion).

What if far-sighted decisions are made: to introduce transportation systems with new technologies (maglev and high-speed rail for passengers, “slow” maglev and electric rail for freight); to integrate these with port connectivity and deepening; to introduce water management and supply infrastructure on new scales and with new technologies (the North American Water and Power Alliance, nuclear desalination, atmospheric ionization); and to bring on new electric power technologies (advanced third/fourth-generation fission and fusion power) and apply them broadly to industry?

In that case, a further cost must be borne by the nation which is not estimable but clearly involving several trillion dollars more, taking the investment over $10 trillion. And not only this new investment is required. So are crash programs in the “infrastructural R&D” category to develop the new technologies, which will be led by the science driver of greatly expanded space exploration.

It is evident that only international development banks, based on new national credit institutions and agreements among the major economic powers, could eventually make this possible.

U.S. POLITICAL AND ECONOMIC

Trade Negotiations with China Are Still On, After Trump’s Tariff Threat

May 6 (EIRNS)—In the trade and economic negotiations which many hoped to bring to a successful end this week, both China and the United States appear to be in strong positions. As EIR has previously reported, China’s accelerated credit issuance, targeted at infrastructure expansion and at projects and trade with Belt and Road countries, has boosted both its own economy and, through a big trade improvement, that of President Donald Trump’s United States.

Thus the Twitter threat of more tariffs by President Trump at midday Sunday, does not seem likely to cause China to agree to more economic and trade changes than it has already made. Trump tweeted: “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. The 10% will go up to 25% on Friday….” The message went on to threaten tariffs on the rest of China’s exports to America as well, those not yet hit with new tariffs. It clearly was intended to mean, “Full agreement must be reached by Friday,” May 10.

There was immediate and intense speculation that China’s 100-person delegation would not come to Washington this week. But Chinese Foreign Ministry spokesman Geng Shuang told reporters this morning that a delegation is “preparing to travel to the U.S. for trade talks.” Global Times editor Hu Xijin tweeted, “This should be seen as a gesture of good will by China.” Despite this, anonymous reports filled the media that the delegation would be downsized or—more critically—not headed by Vice Premier Liu He, whom Geng did not name.

Senate Minority Leader Chuck Schumer’s Twitter message yesterday immediately followed Trump’s: “Hang tough on China, President @realDonaldTrump. Don’t back down. Strength is the only way to win with China.” There had been a cacophony of charges from Members of Congress in both parties and from financial media, that China was “reneging” on agreements and the Trump team was “backing down,” etc.

At the same time, the Washington Post’s lead editorial Monday May 6 reported (or proposed) a new U.S. demand. While acknowledging China’s accommodations on the trade balance, its new intellectual property law, and its allowing U.S. firms to have full ownership of their subsidiaries in China, the Post pronounced that “only structural reforms”—changes in China’s economy—count. It demanded one not previously heard in these negotiations: that U.S.-based IT firms get full ownership of the data they collect on Chinese citizens—“for artificial intelligence purposes”!—and the free right to ship this data back to their parent companies Alphabet/Google, Facebook, Amazon, etc. which would directly violate well-known Chinese law.

White House Aides’ Trips to Moscow Signaled Putin-Trump Phone Call

May 6 (EIRNS)—Presidents Donald Trump and Vladimir Putin, in their 90-minute telephone discussion May 3, obviously addressed a wide range of areas where cooperation is necessary; preceding trips to Moscow by two White House aides may point to areas where it is already at issue.

A frequent contributor who goes by the name of “Harper” wrote to retired Col. Pat Lang’s blog “Sic Semper Tyrannis” on May 4: “Before the Trump-Putin phone call, two Administration officials traveled recently to Moscow to confer with counterparts.  Fiona Hill, the National Security Council director for Russian Affairs visited around the same time that the President’s envoy for North Korea, Stephen Biegun made an April 17-18 visit to the Kremlin to discuss U.S.-Russian collaboration to revive the stalled Korea denuclearization talks.”

Biegun’s trip may be an indication that Putin’s role is now essential to U.S.-D.P.R.K. negotiations over denuclearization of the Korean Peninsula. Following the lack of an agreement reached at the Hanoi summit, North Korea has declared National Security Advisor John Bolton “uncharming and stupid” and repeatedly denounced Secretary of State Mike Pompeo. North Korea’s own chief negotiator, Kim Yong Chol, officially lost his role in further talks. Biegun remains potentially to prepare a further summit meeting, but President Putin can negotiate credibly with both leaders. In his April 27 summit with Kim Jong Un, the North Korean leader demonstratively asked Putin to convey Kim’s view on the negotiations to the American side.

Hill’s visit, according to reports in a number of Russian media, involved the situations in Ukraine, and also Venezuela. Both are obviously open to change now, if the period of “Russiagate”—in which the United States and Russia steadily worked to place military and strategic obstacles in each other’s way—can now be ended.

Today Radio Free Europe is reporting Pompeo’s meeting with Russian Foreign Minister Sergey Lavrov at the Arctic Council conference in Finland, concentrated on Venezuela, and both described it afterwards as constructive. Trump had already said, after the May 3 telephone call, that both he and Putin wanted to ameliorate the humanitarian crisis in Venezuela without military intervention.

Even FBI’s Peter Strzok Suspected CIA of Lying Leaks to Media

May 6 (EIRNS)—Former FBI agent Peter Strzok suspected that the CIA was behind inaccurate leaks to the media about the Trump campaign’s contacts with Russia, Chuck Ross reports in today’s Daily Caller. On April 13, 2017, Strzok emailed some colleagues, “I’m beginning to think the agency [the CIA] got info a lot earlier than we thought and hasn’t shared it completely with us. Might explain all these weird/seemingly incorrect leads all these media folks have. Would also highlight agency as source of some of the leaks.”

That Strzok email was highlighted in a letter Republican Senators Chuck Grassley (IA) and Ron Johnson (WI) sent today to Intelligence Community Inspector General Michael K. Atkinson, asking the IG if he had investigated whether John Brennan’s CIA and/or other intelligence community agencies had leaked information to the press. The senators pointed to a Dec. 15, 2016, message that Strzok had sent to then-FBI attorney Lisa Page: “Think our sisters have begun leaking like mad….” Earlier in the day, NBC News had broken a big story alleging that the Russian President was personally involved in the election hacks—a story sourced to “senior U.S. intelligence officials,” the Daily Caller reports.

A few months later, Strzok emailed colleagues about a 2017 story in the British daily, Guardian, which claimed that British intelligence had provided their U.S. counterparts with information about possible Russian contacts with the Trump campaign in late 2015. This report raised Strzok’s suspicions that the CIA had intelligence it had not shared with the FBI.

Ross reports that Senators Grassley and Johnson wrote to Intelligence IG Atkinson, “These texts and emails raise a number of serious questions and concerns,” and asked him to provide more information about the intelligence “sisters,” and why they would have started leaking. Meanwhile, the Justice Department’s IG Michael Horowitz is investigating the FBI and the Justice Department’s handling of the Russia probe.  Peter Strzok was the lead case agent on both the Clinton and Russiagate investigations and, with Page, was part of Mueller’s initial prosecutorial team. Horowitz’s earlier investigation showed that they considered their Russia work as an FBI “insurance policy” against Trump. The Daily Caller quotes Attorney General William Barr’s May 1 statement that the DOJ has “multiple” criminal leak investigations underway, and that Barr has also formed a task force to investigate the origins of the Trump investigation.

House Democrats Have Mueller Scheduled To Testify May 15

May 6 (EIRNS)—The House Judiciary Committee has scheduled legal assassin Robert Mueller to be questioned about Russian interference in the 2016 election on May 15. “Beating a dead horse” looks sane by comparison.

Rep. David Cicilline (D-RI) told “Fox News Sunday” that he did not know if Mueller would appear. The Fox network also reported that President Donald Trump deferred to his Attorney General William Barr, when asked about it May 3, saying, “I don’t know. That’s up to the Attorney General, who I think has done a fantastic job!”

On May 5 President Trump questioned why Mueller should appear in a tweeting, concluding “Bob Mueller should not testify. No redos for the Dems!” House Judiciary Chairman Jerrold Nadler (D-NY) gave Attorney General William Barr a deadline of May 6 to comply with a subpoena demanding an unredacted version of Mueller’s report, or face a contempt charge, Fox News reported.

Nadler set a May 8 vote in the committee to hold Attorney General William Barr in contempt of Congress for defying the Congressional panel’s subpoena for an unredacted version of Mueller’s Russia report—that is, for following the law, which required Barr to redact grand jury testimony and certain classified information.

THE NEW GLOBAL ECONOMIC ORDER

Chinese Ambassador to Berlin Slams China-Bashing in Frankfurter Allgemeine Interview

May 6 (EIRNS)—In an interview with the Frankfurter Allgemeine Sonntagszeitung, the Sunday edition of Frankfurter Allgemeine Zeitung, China’s Ambassador Wu Ken, who took office in Berlin at the end of March, criticized the increasing discrimination against Chinese investors in Germany that is part of a widespread China-bashing campaign. Chinese investors are not rolling up the German economy, he stated. What is true instead, is that “the Germans have already invested €80 billion in China; we, however, only €11 billion in Germany.”

“As a former foreign policy advisor of the Governor of Guangdong, I know how many foreign firms have invested in this province alone and have taken over 100% (of shares) at Chinese firms,” Wu said. “On the other hand, Chinese investors unfortunately encounter increasing problems on the European and also the German market.”

Wu explained: The Belt and Road Initiative is not geopolitics, it is an economic cooperation design for a win-win for all who take part in it, and furthermore, it “is the biggest contemporary peace project,” Wu said; he called espionage charges against Chinese high-tech firms like Huawei “a mobbing campaign.” When FAZ suggested that Chinese companies could be “easily controlled by the government,” Wu countered by comparing Germany’s state share in Volkswagen to China’s in Huawei: Germany owns 20% of Volkswagen, whereas the Chinese state has not a single cent of shares in Huawei, he pointed out.

Wu also repudiated the “debt trap” argument, saying that as China has been active on the global scale only since 2013, it cannot be blamed for all the debt that has been there before, and that after all, “debt” is a rather neutral term, there are different kinds of debt—this he actually learned when studying economics in Frankfurt decades ago, Wu explained. The Chinese policy is helping countries to get out of their old debt, namely through development.

Global Times covered the interview today under the headline, “U.S. a Bully, Huawei Crackdown Politically Motivated: Chinese Envoy.”

STRATEGIC WAR DANGER

U.S. Navy Provokes Beijing in South China Sea Again

May 6 (EIRNS)—Two U.S. Navy destroyers, the USS Preble and theUSS Chung Hoon, conducted another “freedom of navigation operation” in the South China Sea early today. A U.S. military spokesman told Reuters that the two ships sailed within 12 miles of Gaven and Johnson Reefs in the Spratly Islands. Commander Clay Doss, a spokesman for the Seventh Fleet, said the “innocent passage” was aimed “to challenge excessive maritime claims and preserve access to the waterways as governed by international law.”

At his briefing today, Foreign Ministry spokesman Geng Shuang said the U.S. ships entered the waters near the islets without the Chinese government’s permission, and the Chinese Navy warned them to leave. “The trespass of U.S. warships is a violation of China’s sovereignty,” Geng said. “It undermines peace, security and good order in the relevant waters. China deplores and firmly opposes such moves.

“With the concerted efforts of China and ASEAN states, the situation in the South China Sea is steadily improving. Under the current circumstances, China urges the U.S. to stop such provocations, respect China’s sovereignty and security interests and regional countries’ efforts to safeguard peace and stability in the South China Sea,” Geng continued. “China will continue to take all necessary measures to defend national sovereignty and security, and safeguard peace and stability in the South China Sea.”

Syrian Army’s Offensive against Idlib Jihadis Under Way

May 6 (EIRNS)—After several days of heavy bombardment from both air and artillery, the Syrian Arab Army (SAA) begin its offensive into Idlib province this morning. Led by the Tiger Forces, the SAA stormed several points under the control of the jihadi groups Jaysh Al-Izza and Hay’at Tahrir Al-Sham near the Abu Dhuhour Crossing in southern Idlib, Al Masdar News reported. By late morning, the Tiger Forces reported capturing two villages in northern Hama near a key high point. By early afternoon, the SAA had beaten back a counteroffensive by the jihadis and the Turkish-backed militias to capture the high ground.

Yesterday, when it was obvious that an offensive was coming, the jihadi groups and allied Turkish-backed armed opposition groups claimed that the Syrian-Russian objective was to gain control of the M4 and M5 highways that run through the jihadi enclave between Aleppo, Latakia, and Hama.

“There has long been a Russian aim to capture these highways. This is rejected as a principle of our revolution and it would have meant the displacement of tens of thousands of people who live in the area and refuse to be under Russian [rule],” Maj. Yousef Hamoud, spokesman for the Turkish-backed National Army, told Reuters.

The officer must mean that if the jihadis lose control of those highways, their military position will be very much weaker than before.

The SAA had been building up for an offensive late last summer in order to liberate the last jihadi enclave in western Syria, but it was blocked after an agreement between Turkish President Recep Tayyip Erdogan and Russian Vladimir Putin to turn the enclave, which included adjacent areas of Latakia, Hama, and Aleppo provinces, into a de-escalation zone, under the condition that the Turks would gain the withdrawal of the jihadi groups from the demilitarized zone that was to be created around the edges of the zone. The Putin-Erdogan agreement, however, followed claims of humanitarian disaster and threats of military intervention from the West. The refusal of the jihadi groups to abide by the agreement made conditions untenable, prompting the Syrian offensive.

SCIENCE AND INFRASTRUCTURE

Pentagon Aiming To Test Two Hypersonic Vehicles by End of 2019

May 6 (EIRNS)—The Defense Advanced Research Projects Agency (DARPA) announced last week that there are two U.S. hypersonic vehicle prototypes that could be make their first test flights before the end of this year.

One vehicle is part of the hypersonic air-breathing weapon concept, or HAWC, program. The other is the tactical boost glide, or TBG, effort.

“We’re on track for both to have flights before the calendar year ends,” DARPA chief Steven Walker told reporters at a breakfast meeting in Washington, reported industry publication National Defense on May 1. The schedule is not fixed, however, because once “you actually get into the building of these things and qualifying the hardware, things tend to slip,” Walker said.

The TBG effort is intended to develop an advanced boost-glide system that can be launched from a rocket, Walker said. The HAWC concept takes advantage of work DARPA has previously done in scramjet technology to create a system that can be self-powered after being launched from an aircraft such as a B-52.

“Two very different concepts, but when you’re talking hypersonics it’s good to have what I consider intended redundancy, because it’s a hard technology making materials and propulsion systems that last in 3,000-degree Fahrenheit temperatures,” he said.

OTHER

Saudi Arabia, India Help Suppress ISIS-Linked Groups in Sri Lanka Bombings; Riyadh Arrests Two

May 6 (EIRNS)—Indian and Sri Lankan authorities are cooperating closely to suppress the terrorist networks responsible for the Easter Sunday attacks in Sri Lanka, especially given the links to Islamic State networks in India itself. According to the May 4 Indian daily Hindustan Times, Saudi Arabian authorities last week reportedly arrested Maulana Rila, the brother-in-law of Shangri-La Hotel bomber Zahran Hashim, and a colleague known only as Shahnawaj, on the basis of input from Indian intelligence. Zahran was the leader of National Towheed Jama’at, the group believed to be responsible for the Easter bombings in Sri Lanka on April 21.

Indian security agencies have been in touch with their Saudi Arabian counterparts to discover any links between Sri Lanka bombers and the Kasaragod (Kerala)-Coimbatore (Tamil Nadu) grouping in India. India’s state of Tamil Nadu is opposite a narrow strait from Sri Lanka.

Sri Lanka is also expected to send a team to Saudi Arabia, according to the Daily Mirror of Sri Lanka. According to this article, Islamic State has been able to operate in India and has recruited fighters for Syria, Iraq, and Afghanistan. The Islamic State of Khorasan Province (ISKP) in Afghanistan is one group recruiting Indian nationals. At least 115 Indian nationals have reached various conflict zones: 81 reached Syria, Iraq, and Libya, and the other 34 in Nangarhar province of Afghanistan. From this original group of 115, there were 24 killed while fighting in Syria and Iraq, and 11 lost their lives in Afghanistan. In addition, 35 Indians were deported to India and 126 individuals are under law enforcement surveillance in India, with 8 Indian nationals under arrest for their affiliations in other countries.

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