Hello folks, another day another fiscal maze to navigate. I hope you’ll excuse the length of this piece, but I wanted to throw in some wider context to our conversation. I suppose the burning question looking at the Asian markets overnight, is whether Trump is simply normalising chaos just as he has the lie. I am not a prophet, I’m a numbers, data and facts guy and ABSOLUTELY NOTHING about this on face value, makes sense to me. It’s the job of a president to feel the pain of his/her people and use the levers of government to mitigate that pain. If you live your life with no empathy, compassion and void of moral compass, how can you govern in the interests of the many and not the few?
The HUGE problem Republicans now have, is they can no longer afford to lose an election. If they do, Trump will have eviscerated all political and legal norms to the point that an incoming Democrat administration with a decent majority, will have the power to really go to town on delivering change. These are the embers that burn deep within my DNA, giving me hope each morning before I fight that day’s battle. Equally, I am mindful there is nothing more dangerous that a cornered animal and Trump already proved in 2021, he will stop at nothing to hold onto power. He believes in his tiny mind he WILL be able to run for a third term and given his record for getting his way, who knows? If the constitution holds, he must be concerned about going to jail.
OK, let’s talk tariffs and before we talk about China. I want to step back in time to Trump’s first term and the claims he makes about the great success he had with tariffs back then. Not only did he NOT have ‘the greatest economy in history’, his tariffs achieved little to nothing. Indeed they cost consumers money. He claims they brought back jobs to America, they sure did, at a cost of close to a million dollars for every job. His tariffs on washing machines collected $182 million a year in tariffs. This delivered 1800 new jobs. Result you might think. THINK AGAIN. Price increases as a resul, it cost consumers $1.5 billion more. Effectively each of those new jobs cost CONSUMERS $815,000 per job. Of course that didn’t matter to Trump, he’d just fleeced consumers for $1.5 billion. Looking at the tariff impact from an economic perspective, the US economy overall lost 142,000 jobs. The average household cost passed on to consumers amounted to around $625. Once again Trump won, at the cost of hard working Americans. He stole $625 from every household without even mentioning the word TAX. This is EXACTLY his objective right here right now.
He needs to portray China as paying the tariff, otherwise consumers will realise THEY are the ones filling up the treasury so he can hand HUGE tax cuts to his uber rich benefactors. Americans need to wake up to the fact that they are marks for the biggest fiscal street mugging in modern American history.
If you get a moment watch this Wall Street Journal clip from last year which talks about Trump’s first term tariff outcomes and looked ahead to the very thing we face today. If there’s one takeaway from this, once you start down the tariff route it can take decades to unravel them.
Trump stated yesterday in response to China’s retaliatory 34% tariffs:
“If China does not withdraw its 34% increase above their already long term trading abuses by tomorrow, April 8th, 2025, the United States will impose additional tariffs on China of 50%, effective April 9th,”
The Chinese response?
“Utterly absurd is the underlying logic of the United States: ‘I can hit you at my will, and you must not respond. Instead, you must surrender unconditionally’,” it said. “This is not diplomacy. It is blunt coercion dressed up as policy.”
They later added
“China will fight to the end if the US side is bent on going down the wrong path.” threatening to “resolutely take countermeasures”
Helen Davidson in the Guardian writes that Wen-ti Sung, a non-resident fellow with the Atlantic Council’s Global China Hub stated
“China seems determined to signal that the world is still bipolar, and that Beijing will not let Washington get to call the shots, lest it sets the tone for the years to come….”
Xi sees this I think, not just as a global economic inflection point, but an opportunity for China and that is very dangerous for the US. Xi is painting this as a call to arms for other nations to join in the fight back against Washington. The fact that China is engaging with Japan and South Korea to discuss a possible coordinated response is a true measure of what remarkable times these are. In my opinion, the biggest threat to Trump comes from any newly negotiated trade agreement with the EU. This would represent a catastrophic blow to the US. Right now things are very fluid and it’s impossible to speculate what Trump will do next, but at the moment, China seems resolute in its decision to up the ante and Trump is a shocking poker player.
China has over the years become somewhat of an export tariff avoidance specialist, in the same way Trump has become a criminal US tax evasion expert. He’s working on the principle of, ‘You can’t con a conman’. Some may have been surprised to see such high tariffs imposed on Vietnam, Cambodia, Bangladesh, indonesia and India. China has consistently used countries like Vietnam and Cambodia for ‘trans-shipment’. It ships goods to these countries who have not been subject to US tariffs in order to ship them on and avoid the additional export costs.
China while at a disadvantage in terms of the GDP hit to their economy, have always been an economic big picture nation. Given the state control it can exert over Chinese manufacturers and exporters, it has more flexibility to directly subsidise it’s exporters by using revenue from it’s own tariffs on US imports into China. Trump will find it much more difficult to do that. In any event, he wouldn’t do it even if he could. There’s no doubt China will feel the pain, the question in all of this, is who will blink first and I believe China will stand firm right now. Xi will not have missed the fact that Republicans are beginning to get restless, so there will be lots of factors in play. Also, we must not rule out the fact that the US is hugely reliant on rare earth minerals from China which is where 70% of US rare earth imports are sourced. Added to which, they can literally decimate US farmers given the scale of US dependency on agricultural exports to China.
Speaking of farmers, just as an aside, let’s not forget JD Vance funded AcreTrader. I think Sarah Taber, a Democrat farmer who is now running to become North Carolina's next agriculture commissioner, best summed it up back in September when she described the company as:
“like Uber for buying U.S. farmland.” Just like Uber, AcreTrader makes it easier for more buyers to gain quick access to an ordinarily expensive asset. “And who’s one of its key investors, profiting off of every sale? JD Vance.”
By way of context, Vance co-founded Narya Capital, which invested in AcreTrader. Vance stepped down from Narya Capital in December 2022 and the specific breakdown of its investments is not publicly available. However there is no evidence he divested from AcreTrader, as per Snopes.
Back to the matter at hand, for Trump it’s about ego, he has to win at any cost and the normal existence of wiser voices in his ear no longer exist, because he’s surrounded by ‘yes men’ and sycophants. This is a dangerous cocktail which could go so horribly wrong. It’s about understanding the psychology of the situation as much as it is about economics. Trump will be looking today at the list of capitulators and I suspect China will not be on that list. Regardless of other countries, China is the whole ball game and Trump knows this. Xi does not have to worry about dissent. Much as Trump would love to be able to crush dissent in the same way Xi can, he’s not yet there with his intended reforms, so this situation plays to China’s strength. Xi’s word is absolute in China, Trump’s word in the US is frankly a joke. So they come at this trade war from two very different positions.
As I discussed yesterday, China has achieved its position as the second largest economy in the world by becoming the global manufacturing capital of the world. The west seized upon its vast pool of cheap labor to boost corporate bottom lines without a thought for the manufacturing jobs Trump now claims he wants to bring back to America. What China did was to use the huge investments made to utilize their cheap labor to build for the future. The Chinese government didn’t have to answer to greedy shareholders, the only people skimming were party officials and there were far fewer of them than US shareholders.
They say that the character of a nation is built upon it’s lived experience. China had a devastating awakening from an experiment called ‘The Great Leap Forward’. a disastrous period of rapid industrialization and agricultural collectivization from 1958 to 1962. This resulted in a devastating famine (1959-1961). This led to the deaths of an estimated 30 million people. The impact on economic and industrial development was catastrophic, but it was clearly a brutal lesson from which they learned the hard way.
If you can count on China to be one thing it is RESILIENT, their system of government for all it’s failings has all but eradicated abject poverty. In addition, it has a world class education system.
In terms of conventional academic metrics, China’s education system outperforms that of the United States. A 2019 study of 15-year-olds in each country found that Chinese youth outperform American students in nearly every educational category, with an especially pronounced gap in math. (source The Panel Online)
The Chinese government are heavily invested in education, they treat education as the foundation for future success and this is evident in the level of the academic attainment of their children. In stark contrast, the US has failed it’s children consistently and relies basically on the children of the rich to build a future for America. Lord help us.
Tomorrow, we’ll explore why and how China has become the manufacturing capital of the world and why it is all but impossible for the US to regain their former manufacturing dominance.
I hope you’re enjoying this series of posts in which I aim to try and help you understand the HUGE challenges the US faces just trying to keep up with, let alone dominate China. I’ll leave you with this thought. China has built its position as the second largest economy in the world without a military footprint in any other part of the world other than a support base in Djibouti, on the coast of the Horn of Africa. In contrast, the US has around 750 bases in 80 countries. There is a BIG message there.
You can never count Trump out in these times of crisis and I may be writing a piece tomorrow saying ‘I don’t know how he did it but he won’. Unlikely, but that’s how bizarre the times are in which we live.
Re: Who will blink first? … ABSOLUTELY NOTHING about this on face value, makes sense to me.” Or … Why is Trump doing what he is doing?
To become the richest man on the planet in 100 days!
As you may have realized, President Donald Trump is following Herbert Hoover’s playbook that worsened the Great Depression in 1930 by imposing the Smoot-Hawley Tariff. But the question is why?! I would put my money on Donald‘s ability to manipulate the stock market with all those tariffs.
Step 1 - He crashes the stock market with 150+ tariffs … not to mention the way he did it … with all the “on again, off again” uncertainty exacerbating things.
Step 2 - He buys up all the fallen blue-chip stock at bargain basement prices.
Step 3 (on or before April 30) - He removes all the tariffs and watches gleefully as the stock market rebounds, bragging to everyone: “See what a great man I am — I just alleviated all the pain those pesky tariffs caused. And by the way, where’s all the thanks you should be giving me?”
Step 4 - When the markets peak again, he sells off most of his stock, buys gold, and in the process pockets billions, making him the first trillionaire in history and the richest man on the planet. Of course, that will earn him another front cover on TIME magazine.
The cryptocurrency he’s been peddling right now is going to give him one hell of a lot of cash to buy up all that devalued blue-chip stock. “President Donald Trump's World Liberty Financial crypto project said on Monday that it raised $250 million in its second token sale, bringing the total amount of coins sold to $550 million. WLFI, a venture backed by the first family that describes itself as a sort of crypto banking platform, launched in October, weeks before Trump's election victory. In a document published at the time of launch, WLFI said the Trump family could take home 75% of net revenue.”
And let’s not forget another source of cash Donald can use — his gold cards. As described by Forbes: “Trump Commerce Secretary Howard Lutnick announced in late March the sale of 1,000 Gold Cards this week, raising $5 billion in a single day.” Donald told reporters on Air Force One, “For $5 million, this could be yours.” According to Forbes magazine: “Priced at $5 million each, President Trump introduced these Gold Cards in February 2025, as an opportunity for wealthy foreign citizens to work and live in the United States, granting them permanent U.S. residency and effectively replacing the EB-5 immigrant investor visa program.” How nice is that!
Some say that Donald and Putin are in it together. But Donald is not in it with Putin. He’s in it for himself. He wants to be the richest man in the world (even richer than Putin) in his first 100 days as president. (That gives him until April 30, 2025.)
Look, who’s the only guy in the world who can make the stock market go up and down “on command” and get away with it? Why, of course, the one guy who can impose sweeping tariffs on practically every country in the world … and then with a simple tweet, sweep them away. Now that’s pure power, wouldn’t you agree?
Question: But could the Donald be charged with “insider trading”? Sure, but no matter … because if and when Donald gets caught, all he has to do (being as he’s the President) is declare himself IMMUNE and guess what? … He gets off Scott-Free … with all that money 💰… “tax-free,” I might add. … Don’t forget American billionaires (in a class of their own) have just been given a special tax break by POTUS because, in the end, they are helping the economy, aren’t they? … I mean one way or another? 😂 They do buy stuff, don’t they?
I repeat … “Why is Trump following Herbert Hoover‘s Playbook?” To commit the “Crime of the Century” and get away with it “In Plain Sight.” Oh yes, don’t forget, Donald can pardon any of his fellow conspirators who participate in his “insider trading” scheme to get rich themselves. Because he’s the president! And if his billionaire co-conspirator buddies don’t cooperate, he may withhold that pardon (without prejudice) as he threatened to do with the disgraced Mayor of NYC — Eric Adams.
Now perhaps you’ll understand, after the stock market crashes of the last two days (April 3 and 4), why Donald is playing golf and telling everyone: “'This Is a Great Time to Get Rich!” What gets me is that no Democrats or Indie Media critics have called Donald out on his outrageous plot! — “The Question is Why?!”
IF ONLY WE HAD “DIRECT DEMOCRACY” AT THE FEDERAL LEVEL & THE TOOLS TO ‘RECALL’ DONALD, then we could toss him out with a few million signatures and have a new election within 60 odd days, which hopefully would set things right.
Yes, and China has lifted nearly 800 million people out of poverty over the last 40 years. That accounts for a 75% reduction in global poverty.