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China Trade Truth

Coronavirus Highlights The Importance Of The Trump Doctrine Succeeding

Rod Thomson

We are seeing the folly of past administrations of both parties playing out in real time, illuminated by a deadly virus out of the heart of China. And it is making something abundantly clear.

President Trump was more right on trade and border security than even I thought — and those were the two areas I considered him strongest in 2016. In fact, no one else was even talking about trade agreements. 

The underlying thesis of Donald Trump’s push to re-do trade agreements with China and our North American neighbors — which might be called the Trump Doctrine — was to restore manufacturing at every level. The idea is that the world’s industrial democracies, led by the U.S.,  should not be beholden to the world’s largest Communist tyrants in order to simply have the basics required for their economies to operate.

This is literally the supply chain that is now threatening to crater the world economy because lousy, weak, vision-less American leadership has left us vulnerable. We should have understood that trade agreements favoring countries with cheap labor and allowing them to cheat endlessly and blackmail U.S. companies was not only wrong, it was dangerous. Trump saw that.

National security and now, obviously, health security are inextricably tied to better trade deals and more border security. I’m not saying Trump foresaw the coronavirus issue. There’s no evidence of that. But he saw American workers being hurt and he saw America and our allies being made vulnerable.

And boy was he ever right. 

This clarity of vision, absent among his opponents to this day, is why he ordered the shutdown of most flights from China to America in late January, more than a month ago. At the time, Democrats, including Joe Biden, rattled out on their rickety carts the same old tired, hackneyed dogmas: This is xenophobic! It’s racist! Discrimination! Ugh. It’s exhibit 4,871 why they should not be in charge of anything.

Trump’s quick, bold actions are likely why our reported cases of coronavirus are so relatively small, even though of course they will rise like everyone else’s for a period of time. We are China’s biggest trading partner, with enormous amounts of travel between the nations. But his quick actions shutting that down undoubtedly slowed it. Democrats paralyzed by intersectionality and grievances, would have been much slower to act and we would be seeing many more cases in the U.S.

Notice how some countries are beginning to close their borders to stop the spread of a pandemic, including the Europeans. But we are unable to do that effectively on our southern border until we have some sort of wall that turns floods of people into trickles, and funnels them to legal ports of entry. Everyone is safer then.

The new North American trade agreement with Canada and Mexico is fortunately in place, laying the groundwork for a more vibrant manufacturing base and safer supply chain as Western companies begin seriously re-thinking using China for all their cheapo manufacturing needs. This third world virus in a row emanating from China, and its mishandling, is making clear to the private sector that China is just too risky.

This will not be a quick change, and companies will always be looking for cheap labor, but they will have to factor in much more now. And with the improved trade agreements, the highly productive American labor force will be much more competitive and attractive.

Down the road, we will be less at the mercy of China and other unscrupulous countries, and more in charge of our own destiny, just as we are now with energy independence — thanks to innovative American fracking that Democrats vow to ban.

This better future will be largely due to the clarity of vision of one man: Donald Trump.

Rod Thomson is an author, past Salem radio host, ABC TV commentator, former journalist and is Founder of The Revolutionary Act. 


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China Mexico Trade Trump Truth

Trump Will Get Deals With Both China And Mexico

Rod Thomson

Most of the media won’t get it, probably even when it happens, but all of the signals are pointing to President Trump getting deals with both China and Mexico — and they will be better deals than what the United States has or has had.

Mexico is actually the easier nut to crack here. The government is corrupt, weak and totally reliant on the United States for both its legal economy and its black market economy. A full-out trade-war with the U.S. would of course cause some harm to the U.S., but would be catastrophic for Mexico. And more importantly, for Mexico’s government.

If the current political leadership wants to stay in power, and if future political leadership wants to attain power, they need a decent relationship with the U.S. And given the millions of Mexicans sending billions of dollars back to Mexico in remittances, running on an anti-American plank is not likely to be popular or successful — at least for long.

The tariffs on all Mexican imports began at 5 percent and rise by 5 percentage points each month before reaching 25 percent in October — unless Mexico takes serious steps to stop the flow of Central American migrants now swamping the southern American border. These 25 percent tariffs would crush the Mexican economy, and possibly have the perverse effect of strengthening the deadly cartels even more.

Mexico’s leadership is fully attuned to this dynamic, and that is why Mexican leaders are moving quickly to respond to Trump’s punitive tariffs launched Friday, with escalations coming, by agreeing to meet in Washington today.

President Trump tweeted Sunday: “Mexico is sending a big delegation to talk about the Border. Problem is, they’ve been ‘talking’ for 25 years. We want action, not talk.”

They’ve been “talking” and American leaders have been “talking” and everyone was fine with the arrangement as long as nothing was ever done. It’s obvious this President expects something to be done or those tariffs will just keep increasing.

So Mexican Economy Minister Graciela Marquez will arrive in Washington today (Monday) to meet with U.S. Commerce Secretary Wilbur Ross. On Wednesday, delegations led by Secretary of State Mike Pompeo and Mexico Foreign Relations Secretary Marcelo Ebrard will meet in Washington.

That was fast.

China is a tougher nut, but some of the same dynamics are in place as with Mexico.

As with Mexico, China is far more reliant on the U.S. than the U.S. is on China. Their economy is built on selling to the giant and prosperous U.S. consumer market. If that is cut off or diminished through tariffs, their much smaller secondary markets leave them in an economic tailspin, particularly considering that they are facing other economic headwinds, such as an aging and soon declining population, a fluctuating currency and increased competition from India (an ally that Trump should look to for a friendlier trade deal.)

One of the ways the Chinese Communist Party has maintained its iron fist of control is by not being communist, or socialist, but by freeing up its markets and allowing a form of capitalism to operate. That has created huge wealth gains, a growing economy and an emerging middle class.

Chinese who lived in generational poverty seeing the opportunity for a better life for themselves and their children have been willing to live with the totalitarianism of the Communist Party. But they may be much less willing to put up with the iron rule if the economy tanks.

One of the last things the Chinese government wants as it pursues its global ambitions is unrest at home. A trade war with the U.S. would risk that, and could begin to threaten their hold on power.

But the Chinese’ global ambitions based on their historic view of themselves as the Middle Kingdom — the center of the world — also drive them to be much more intransigent negotiators than the Mexicans. And patient negotiators as they take the long view. Newt Gingrich does a terrific job spelling this out in writing and on his podcast.

These are China’s competing interests in the negotiations: showing strength at home and abroad while actually being strong at home and abroad.

In the end though, their Middle Kingdom aspirations and desire for long-term control will mean that a new trade agreement is the lesser bitter pill to swallow. The Chinese are ultimately very pragmatic, and would likely view a new trade deal — even one that was not tilted in their favor — to be worth the trade-off for their ultimate vision.

That is why we’ve seen China moderating its original harsh rhetoric to Trump pulling out of negotiations after the Chinese deleted most of what they had agreed to. They had pulled this trick on previous administrations, counting on American president’s willingness to take a fake victory, if you will, and they were right.

However, they miscalculated with Trump. He’s just not a typical politician in so many ways.

So Beijing released a government policy paper on trade issues Sunday which as usual blamed the U.S. for the negotiations breakdown, but also turned much more conciliatory. They’ve realized Trump won’t come back to the table without real movement and so throughout the paper and at the briefing at which it was released, the Chinese government said repeatedly that they are willing to return to negotiations.

“We’re willing to adopt a cooperative approach to find a solution,” Vice Commerce Secretary Wang Shouwen said.

No talks are scheduled, but U.S. and Chinese trade officials will be at meetings of the Group of 20 major economies this weekend in Japan. A possible meeting between Mr. Trump and President Xi Jinping of China at the G-20 summit is seen as an opportunity to re-start trade talks. Don’t be surprised if that happens.

China “is expressing its wish to work together,” said Zhang Yansheng, a researcher at the state-backed think tank China Center for International Economic Exchanges, told the Wall Street Journal.

China will come back to the table that Mexico is already at. And Trump and Americans will ultimately get a better trade deal with China and better security on our southern border with Mexico — unless China holds out until November 2020 and we elect a new president that falls back to the status quo of China picking our pockets and stealing our tech.

Rod Thomson is an author, past Salem radio host, ABC TV commentator, former journalist and is Founder of The Revolutionary Act.


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China Tariffs Trade Truth

Trump Won’t Kick The Can Down The Road On China’s Cheating

Rod Thomson

To listen to media pundits, President Trump has created the trade-war crises with China. They say he is economically illiterate. Or he’s a dolt. Or he’s a xenophobe. Or a jingoist. And his impetuous actions are “roiling” markets and making businesses nervous and could tank the economy.

It’s all Trump’s fault. This is not just wrong, it is 180 degrees wrong and demonstrably so. In fact, Trump is the only American leader actually trying to right a substantial wrong.

The truth is that the China problem has been ignored or avoided by multiple presidents and Congresses from both parties, and certainly from the media and D.C. establishment, as far back as the late 1980s, but overtly since China’s entrance into the World Trade Organization. And it has always been a rightable wrong by United States leaders with some backbone and intestinal fortitude. So it has not happened.

Here’s what China has been doing.

The United States and many allies thought when China joined the WTO in 2001, the country would open its economy for more full trade. Until then, it had been utterly closed off to foreign companies even while it market-ized its formerly socialist economy. That’s actually part of the deal of being in the WTO — member nations are supposed to abide by free market trading principles to some extent. There was also the thinking that perhaps the Chinese Communist Party would allow more political and religious freedom as the country became more enlightened through trade relationships with the world’s industrialized democracies.

That, it turns out, was a bit of a pipe dream.

China has merely used its WTO membership to flood its trading “partners” with state-subsidized exports while throwing up numerous walls to continue blocking access to the country’s burgeoning middle class — including tariffs. They obviously continue their protectionist, controlling ways. And they continue to crush dissent and religious freedoms, including Chinese Christians.

“China has effectively used the multilateral trading system to its own advantage, enjoying the benefits of those rules of engagement while not always following those rules in spirit,” Eswar Prasad, a Cornell University economist and former head of the China division at the International Monetary Fund, told the Associated Press.

Or following the rules at all. But the comment shows how even the milquetoast IMF acknowledges China’s bad behavior, even if it soft-pedals it.

Because the reality is that it is much worse. From blackmailing U.S. companies and other foreign companies to gain entrance to the Chinese market, to secretly embedding spyware on the hardware they export, to stealing patents and creating cheap knock-offs, to product-dumping for market control to outright espionage and more.

This has meant the loss of likely hundreds of thousands and possibly millions of American jobs and wages over decades. That is a straightforward theft of prosperity. The same, though less, for Europeans who China also treats this way — although the Europeans are not quite the free-trade purists the U.S. attempts to be





Everyone knew. China is one of the worst trade actors on the world stage, not to mention a growing military threat beyond just their region. But no American leaders made the effort to do anything other than kick the can down the road — just as they did with North Korea’s nuclear and missile program and with our European allies in NATO paying their fair share for defense.

Economically, the result is a badly lopsided trading relationship: The U.S. trade deficit with China last year hit a record $379 billion. And their economic growth in part at our expense is funding a huge military buildup that does not rely on the traditional numbers superiority of the Chinese but on high-tech weaponry, including in space.

The trade deficit itself is not the end of the world, although it does transfer wealth, it does so in return for goods. I have a trade deficit so to speak with Walmart, Publix grocery store and Race Trac, to name a few. But that is because I don’t create goods or services I am trying to sell to them. U.S. companies want to sell to the Chinese people, but the government doesn’t allow it or cheats on it, and that is what is creating a lot of the trade deficit. The trade balance doesn’t have to be even. The trading market does.

Donald Trump the man has been harping on this problem for years, even decades. He was a lone voice because no one else wanted to poke the dragon. It was his initial issue when entering the presidential race. When he spoke to Florida Republicans about a week before coming down the elevator at Trump Tower to announce his bid, China was the focal point. It was not until he gauged the American people’s frustration at illegal immigration and the open southern border that he shifted focus, while still including China.

So this is the actual background for Trump beginning last year with tariffing some Chinese goods to get them to the table. They responded and talks went on for months, supposedly making progress and getting closer. Then the Chinese did what they always do, the week before the final negotiations and expected deal were to be announced, they reneged on every major commitment they had made. This worked with the likes of Barack Obama and other American leaders, who just backed down and got some gosh-awful deal that they misled the public about.

Not with President Trump, though. Trump tweeted two days later he was slapping tariffs on $200 billion of Chinese goods, which went into effect last Friday. Again, the media spun wildly at Trump’s actions, because of course they assume the worse and did not know or care about China reneging. Further, Trump spelled out plans for tariffs on another $300 billion. In response to tariffs on $500 billion of Chinese imports, China responded with tariffs on $60 billion.

And this belies the reality that we always had the vast upper hand if we would just wield it. The Chinese will have to come back to the table and they will have to give the U.S. a lot of what we want. Because the reality is that while both sides get damaged in a trade war, the Chinese are far more damaged than the U.S. To be blunt, they need us more than we need them.

“The United States has legitimate grounds to be upset with the Chinese,” said Mark Zandi, chief economist at Moody’s Analytics. “This has been building for almost 20 years.”

Exactly. And nobody would do anything about it until now.

Rod Thomson is an author, radio and TV commentator and former journalist, and is Founder of The Revolutionary Act. Rod also is co-host of Right Talk America With Julio and Rod on the Salem Radio Network.


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China Trade Trump Truth

China’s Exposed Hacking Strengthens U.S. Negotiating Hand

By Julio Gonzalez, M.D., J.D.

For many, the thought of a hacker attacking American companies conjures up images of a bespectacled, chain smoker sitting in some dark room in a nondescript warehouse figuring out ways to bypass passwords and security blocks. It seems, though, that China bypassing that process altogether.

Bloomberg Businessweek is reporting today that China has been hacking American computer programs, companies, individuals and perhaps governments by implanting tiny microchips into the computer’s hardware, allowing for access into the computer’s brain from the moment it is manufactured.

It’s not a Trojan horse, its a secret door to the castle that only the enemy knows about. It’s dangerous for everyone who uses China for manufacturing computer components — which is about everyone. World opinion will be universal on this issue.

The implantation of hacking facilitating equipment at the time of its production, a process known as seeding, is a significant development in the world of cyberwars. The danger of such activity are monumental as secretly installing these types of components into motherboards designed for security, intelligence, and military applications would be tantamount to gaining access to America’s next steps before they can be brought to fruition.

The Bloomberg Businessweek story tells of an experience by Amazon and Elemental Technologies. In providing its services, Elemental needed specialized servers manufactured for them. The manufacturer was Super Micro Computer, Inc., a company out of San Jose, but whose workforce is mostly Chinese. It appears, according to the report, that China was able to infiltrate Super Micro Computer, Inc. and implant the microchips there. 

Although both Amazon and Element are denying the allegations, anonymous FBI and CIA investigators have laid out meticulous details of the ploy and the ensuing investigation. Officially, the CIA and the FBI are refusing to comment, but potentially up to 30 U.S. companies may have been affected.

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This development means that foreign entities may have devised a way through which they may directly interfere with American elections, regardless of how isolated the polling devices may be. That is real cause for concern.

If true, then this type of activity will support President Donald Trump’s contention that China is actively involved in cyber-activity against the United States.

A silver lining: With the new United States Mexico Canada Agreement replacing NAFTA, and improvements on trade with Europe, China is fairly isolated in its trade negotiating position with the United States. This development may further strengthen Trump’s already strong hand in negotiating with the Chinese, perhaps gaining an even better deal for America and American workers as world opinion will, for once, be on his side. No one wants the Chinese imbedding hacking hardware in their equipment.

Dr. Julio Gonzalez is an orthopaedic surgeon and lawyer living in Venice, Florida. He is the author of The Federalist Pages and cohost of Right Talk America With Julio and Rod. Dr. Gonzalez is presently serving in the Florida House of Representatives. He can be reached through www.thefederalistpages.com to arrange a lecture or book signing.


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Tariffs Trade Trump Truth

Trump Proves To Be The Greatest Weapon For The American Worker

By ​Julio Gonzalez, M.D., J.D.

President Trump’s first and most enduring promise has been kept, and the American worker can rejoice.

A deal experts said was dead in the water materialized last weekend when Canada announced it had reached an agreement with the United States to replace the North American Free Trade Agreement (NAFTA). The deal came about as a frustrated Prime Minister Justin Trudeau called a late night meeting with his cabinet. Indeed, the materialization of an agreement serving to improve America’s trade position in North America would not have occurred were it not for the negotiating prowess and vision of President Donald Trump.

The workings of the trade deal date back to before President Trump’s election; actually from before he even started his campaign. For years, Trump voiced his frustration at the United States’ involvement in deals that were hurting the American worker. Calling them “bad deals,” Trump expressed his befuddlement at how politicians could agree to such catastrophic trade deals. NAFTA quickly became a centerpiece of Trump’s campaign for president and the object of his ridicule. But it should be remembered it was also a centerpiece of his speeches long before he came down the elevator. 

Upon assuming power, President Trump wasted no time threatening the stability of NAFTA by announcing his intention to pull the United States out of it. Predictably, the naysayers took to the airwaves, arguing that NAFTA was a creator of jobs. Investor Dennis Gartman called such a move, “egregiously stupid,” and CNBC proudly published his opinion. Meanwhile at Forbes Magazine, Professor J. Bradford DeLong called the prospect of leaving NAFTA, “a disaster” while Stuart Anderson, the author of the article, mocked Trump by stating that visual aids were needed to teach the President why leaving NAFTA was a bad idea. Anderson held nothing back when he concluded, “Donald Trump does not know much about the trade agreement he has so frequently criticized.”

Undeterred, President Trump continued to place his disapproval of NAFTA at the center of public discourse. Recognizing his greater advantage over Mexico, he then pealed America’s southern neighbor into a separate agreement that did not include Canada calling it a “terrific agreement for everybody.”

With the Mexican trade deal solidified, Trump turned his attention to Canada, this time suggesting that he might leave Canada out of the deal if it did not negotiate.

Canada remained defiant. “We will only sign a new NAFTA that is good for Canada and good for the middle class,” said a spokesman for Canadian Foreign Minister Chrystia Freeland. For Canada, there were a number of sticking points to a new deal. First the NAFTA dispute resolution process that protected the cultural exemptions was “fundamental.” This “exemption” protected Canadian artistic products, including media outlets. Understandably, Canadians feel threatened that American networks might buy Canadian media affiliates and essentially control their media coverage. Further, the abandonment of Canada’s tariffs on American dairy products was considered too great a threat to be acceptable.  

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But President Trump remained undeterred. He imposed an Oct. 1 deadline upon Canada, insisting that if it did not provide the text for a new trade deal to the United States Congress by that time he would move ahead with the deal with Mexico and exclude Canada.  

Trudeau did the only thing he could and called for “common sense to prevail.” He appealed to Canada’s partners, including the European Union, to ramp up their pressure on the United States. But the reality was that Canada could ill afford to be kept out of a new North American trade agreement. The Canadian dollar was weakening, and the prospect of Canada continuing without a treaty seemed like a doomsday scenario for its economy; and for Trudeau’s impending reelection.  

With negotiations seemingly hopelessly stalled as recently as late September, Canadian negotiators went to work. And by Sunday, Sept. 30, the two countries agreed to terms.

The new agreement, known as the United States-Mexico-Canada Agreement (USMCA) is nothing short of revolutionary. Among other provisions, the USMCA curbs Canada’s high tariffs and low quotas on American dairy product; drops the percentage of a car needing to be manufactured in China that would still allow it to be considered “North American;” includes provisions that help NFL advertising; and forces Canada and Mexico to respect American drug patents for 10 years. And Canada gets to keep its cultural resolution process exemption.

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In a very real sense, the trade deal vindicates President Trump — and the wisdom of the American worker supporting him. He identified a palpable problem in North American trade and placed his political capital on the line to see it terminated. As a result, Trump emerged much stronger, an important perception at a time when he is knee deep in trade negotiations with China. But more importantly, President Trump’s priority of protecting the American worker and improving the environment for American businesses prevailed.

There is also the glaring realization that these new agreements would have never come to fruition without President Trump. The events leading to Sunday’s breakthrough would never have been possible without Trump’s aggressive, even bombastic style. Most importantly, when President Trump said he would walk away from the deal, he was believable, forcing all players to look hard at the possibility of having no deal at all.

Say what you want about President Trump, but he has become America’s greatest weapon in international negotiations, much to the joy of the American worker.  

Dr. Julio Gonzalez is an orthopaedic surgeon and lawyer living in Venice, Florida. He is the author of The Federalist Pages and cohost of Right Talk America With Julio and Rod. Dr. Gonzalez is presently serving in the Florida House of Representatives. He can be reached through www.thefederalistpages.com to arrange a lecture or book signing.


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Tariffs Trade Trump Truth

Is There Emerging Support For Trump Tariff Policies Toward China?

Rod Thomson

I was on an ABC panel last night debating President Trump’s tariff policies with a Democratic politician and a left-of-center university economist when something very interesting emerged: They both agreed that China is a bad player in trade and that it should be forced into more fair trade with the U.S.

All three of us agreed on a major Trump policy. That left the moderator a bit bewildered, and for good reason. It’s a pretty amazing development considering getting agreement on the sky being blue is nearly impossible in today’s environment. But just as surprising and largely uncovered, it is supported by a substantial majority of Americans, if you move past the media spin.

An April poll by Luntz Global Partners found that 62 percent of Americans agree with Trump’s attempt to use tariffs, believing that the risks are worth it to get better trade deals. That includes more than one-third of Democrats and a huge majority of Republicans.

“Voters don’t buy the ‘fear-factor’ that jobs are at-risk, instead agreeing that Trump’s tariffs are both ‘necessary,’ and in the words of Senator Sherrod Brown, ‘long overdue,'” said Alyssa Salvo, president of Luntz Global Partners. Brown is a Democrat from Ohio — a state that stands to gain a lot from better trade policies with China.

Showing a more shrewd understanding of tariffs than a lot in the media, the Luntz poll found that 56 percent of Americans expected that the tariffs would have some negative effects — because of course they will, short-term, at least on consumers on certain products.

The media insists that Trump’s tariffs are launching a terrible and dangerous trade war and wonder why Republicans no longer support free trade. As I mentioned at that point on the ABC panel, we do not have free trade with China and have not for decades. Too many presidents paid minimal lip service to the Chinese tariffing cars at 25 percent among most other products, blackmailing American companies to give up trade secrets to enter the Chinese market and just flat out stealing American technology.

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They have not been a trade partner, but a trade enemy.

Trump has rightly identified this problem that a broad cross-section of Americans also identify, and is trying to fix it, of which Americans also largely approve. President Obama didn’t really give a fig about American industry; his attention was elsewhere focused on destructive identity politics and socialized health care.

What is surprising is that perhaps a growing number of Democrats (not in Washington, that’s a lost cause) are coming to see the problem with China. Only forceful actions will change it. Talk alone will not.

Tariffs are neither good or evil. They just are. If they are used to protect certain industries or companies in perpetuity, then they are bad. China does that as well as several European Union countries and Canada — just on much smaller scales than China. But if tariffs are used as a short-term leveraging tool  — particularly when done by the bigger importing country — then they are good.

Of course, the U.S. can and likely will win any trade skirmish with China, or Europe, for that matter. Remember, the U.S. is not just the biggest economy, its the biggest shopper — by far. That means in every trade war with countries with which we have a trade deficit, we have the upper hand in a tariff war. The bigger the deficit, the bigger the upper hand.

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The U.S. has the largest trade deficit with China, by far, and China cannot come close to matching us tariff for tariff because they already have high tariffs that have kept a lot of U.S. companies out. Which means, their companies and economies get hurt much more than ours, because they have largely been either gaming the system or downright cheating.

This emerging reality has one more meaning: It’s good politics. Tariffs on steel, cars can help heavy manufacturing states, particularly in those that Trump swung from the Democrat column, such as Pennsylvania, Ohio and Michigan. There may be a mix of short-term pain and gain, but should be long-term gain. And it demonstrates he’s actually fighting for blue-collar American workers, voters that identity-poisoned Democrats have walked away from.

Rod Thomson is an author, former journalist and current TV talking head, and is Founder of The Revolutionary Act. Rod is co-host of Right Talk America With Julio and Rod on the Salem Radio Network.


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