What president Trump is doing is a long overdue China reset. America has been in a fever dream, gutting it's middle and working class and building up China's. Remember, China is a communist country of 1.3 (ish) billion people. America has not just allowed them to become an economic superpower, they enabled it. They facilitated it. If the path the global economy was on had not been intercepted, America's decline would become inevitable, and China's rise to preeminent superpower would also be.
Remember the Chines Communist Party are belligerent, aggressive and evil actors with a facade of fair minded global players. What president Trump has done was 100% necessary. So how is it working?
I honestly believe Trump is wrong blanketing Canada in with Mexico and China in his tariffs. I'm a Canadian but have been a staunch Trump supporter. Attacking a primary trade partner is a mutually assured destruction scenario. Canadians have been burdened with the stupidity of Justin Trudeau and are sick of him. He has caused untold suffering on Canadians. But this is causing Canadians to rally around him. It's causing former Trump allies within Canada to taking a more combative stance.
Pierre Poilievre is taken from the mold of Donald Trump; even he's no longer thinking the way he was two months ago. Trump has torpedoed trade, torpedoed a friendly partner, torpedoed inflation fighting in both countries, he has torpedoed goodwill, he has torpedoed international markets, he has torpedoed conservatism in Canada that was on the rise. It's tarnished America's reputation in many, many countries.
There are going to be unintended consequences that come out of this, guaranteed. They won't be small, and they could have a long lasting negative impact on all involved.
I get what Trump is trying to do, I do. I still support his agenda. But what he is doing with Canada, he is not going about in the most productive way.
Earlier this week I shared a video about China's neodymium near-monopoly. Rare earth metals are a really important strategic asset for any advanced nation. I shared that because of the growing Trade War between China and America, and what China's options might be.
Guess what - China pulled the trigger on rare earth tariffs.
Interestingly this is probably a counter-productive move for China and probably good news for president Trump as rare earth processing used to be an American industry but has mostly disappeared. A year from now bringing facilities on line will create jobs, and also help the trade imbalance with China. That's not to mention that as a strategic resource, recreating a domestic industry for refining and processing will facilitate more domestic production and reduce reliance on a hostile regime for that.
This indicates to me that China is very reluctant to pull the trigger on selling it's U.S. Treasuries. I'm not sure president Trump needs to respond to this move because it will backfire on China in the long run. Nut it will be interesting to see if he takes the opportunity to make more moves. He probably will as not responding will appear to China as weakness.
Hunker down, this trade war is not going away. In fact, it's been around for a long time already. China became a member of the World Trade Organization in 2001 and while getting the benefits from being a member (indeed special consideration as a result of being classified a developing country), they have hardly played by the rules - unfairly protecting their markets, stealing intellectual property and manipulating their currency. They have become rich not only at the expense of America but of many countries around the world. They've leveraged that growth to expand their hegemony at home and abroad.
For decades no one stood up to them. Abroad no country had the strength to do it alone, and without leadership from America, why would they try? But prior presidents - Clinton, Bush or Obama - either ignored or outright facilitated China's rise.
China's government is communist. They are not good guys. They are evil. They are preying upon foreign weakness and hoping to not have to deal with an America that stands up to them. Enter Donald Trump. He's breaking the Chinese domination model like a fever that has gone on for too long.
It won't be easy. It would have been a lot easier 5, 10 or 20 years ago but nothing was done. President Trump is the literal bull in the China shop. He's making the tough decisions about things like banning Huawei , which is clearly an espionage agent for the Chinese government. He's in it for America for the long haul instead of a managed decline and ceding international superpower leadership to the Chinese.
Yes, tariffs hurt American consumers and producers. They do the same in China. But in the long run they help fairer trade and prevent China from breaking all the rules and not being called out for it.
I say that last part because I think even if president Trump gets a really good trade deal for America, China is going to cheat. They're cheaters and they have been doing so since the communists took power.
The fact the the New York Times, South Korea and Breitbart all seem to be landing on the same page really says something important. It says that this is a generational issue that really needs to be met head on, and now. It's no time to be weak, because with each passing day that nothing is done, it gets harder to confront the Chinese government effectively.
The trade war, even if a deal gets signed and appeases the stock market, will continue. It will continue as a cold economic war because it has to. To not confront it is to abdicate our responsibility and to abdicate the future to a totalitarian, aggressive and corrupt China.
Today the Dow Jones Industrial Average was up over 400 points today. What changed? Not the Facebook hearings. Not the Mueller probe or the raid on president Trump's lawyer by the DOJ. Nope. This:
Remember last week people were freaking out over a trade war? President Trump is still winning and there's your #MAGA moment.
A lot of people look at the Trump administration and see a lot of firings and resignations and think it's a sign of chaos. But it's not necessarily a bad thing. The specifics of the reason for the latest resignation aside, people often remain around long after their specialized talent or value is no longer needed. In essence, president Trump may be operating from more of a business model approach than a government bureaucracy style.
He may be bringing people in and using them like contractors for specialized tasks and afterwards replacing them with people suited to the next task.
Clearly that has not always been the case for this president. In the beginning there was indeed a lot of turmoil around the comings and goings. And there have been disagreements both personal and professional. But the departure oh Gary Cohn seems more like a plan. He's a free trade advocate in the administration of a president who is threatening trade wars (clearly as a negotiating tactic), and his presence belies the threat.
The resulting market turmoil is a byproduct of the reaction to a different style of leadership; it's not used to rapid changes and that can be unsettling. But the turnstile administration may turn out to be a more effective model than the bloat which has preceded it for decades.
