| | Hi, my name's Phil. |
| | I like talking about politics and in this video, as China and the US continue the escalation of their trade war, I'd like to discuss how Trump's lack of attention to detail has played right into China's hands and how the EU needs to be wise to the opportunities presented to themselves. |
| | But first, for daily news and commentary, please hit the subscribe button to stay notified. |
| | So, at the risk of trying to make too much sense of Trump's madness, let's suggest that one part of the strategy is to hobble China. |
| | Trump is trying to force Southeast Asian countries, in particular, to raise trade barriers against China in order for kinder treatment from the US. |
| | Now, note, the kinder treatment is not going back to the way things were. |
| | And there are multiple problems for Trump with this strategy that I really don't think he's considered. |
| | Yes, yes, I know. |
| | You could fill the British Library with a list of things he hasn't considered. |
| | But the first is that China, unlike Europe, paid attention to the warning signs years ago and has been preparing. |
| | For example, their push to develop low carbon energy. |
| | That's not just because the Chinese government like hugging trees. |
| | It's because they wanted to establish energy independence in the event of having to deal with a major geopolitical realignment. |
| | Much as Starmer wants the UK to develop green technology to reduce our reliance on fossil fuels, China has already made this move. |
| | There is a lot of renewable energy powering Chinese homes right now. |
| | The climate's denialists over here don't like talking about. |
| | Then there's food. |
| | China has spent the last few years working on deals with countries to make sure they can absolutely keep themselves supplied in the event of political strife with some of the more obvious candidates, with the USA being top of the list. |
| | In other words, China has spent years preparing for this trade war. |
| | Not because they intended to start it, but because America has been threatening it for actually quite a while. |
| | And into the mix, you've got the fact that China is basically a dictatorship with a very compliant population. |
| | They can take way more privations than America can with Trump's trade war. |
| | America, big consumer population. |
| | As long as the Chinese government can make sure people have got access to, you know, the things they need, they can ride this out. |
| | And they have been working on making themselves independent of American trade for a while. |
| | Which is just as well because it's pretty much been cut off now. |
| | So Trump is not going to make China squeal with higher and higher tariffs against them. |
| | It hurts America way more than China. |
| | Incidentally, if you're wondering how high the tariffs are going to get, China have already said they're not going to raise them further. |
| | They consider that the current rate of 125% is effectively pricing America's goods out of their market now. |
| | And they will focus on other trade barriers until Trump backs down. |
| | And of course, China also believes that the 145% US tariffs on their goods effectively price them out of the American market as well. |
| | Which is an interesting point to make as well. |
| | Note that by China's sake, look, that the tariffs are putting them higher doesn't actually make any difference to trade. |
| | It would just be for show. |
| | So they're indicating they're not interested in things just for show, unlike Trump, the great showman. |
| | They're just going to focus on practical applications of the trade war tools. |
| | So China is taking the view there is effectively no trade with America anymore. |
| | So all Trump has left is attempting to turn other Asian countries against China. |
| | But even this seems unlikely. |
| | Several of these countries absolutely depend upon the American market for exports. |
| | Hence why Trump rated their so-called reciprocal tariffs so highly. |
| | But geography, as always in trade matters. |
| | Yes, there are some countries in Southeast Asia right next to China who export more to America than China. |
| | Like Vietnam, Cambodia, for example. |
| | But Trump isn't offering that level of export unless they massively increase their American imports, which they won't be able to afford to do. |
| | The bottom line is that the likes of Vietnam and Cambodia have permanently lost the scale of exports to the United States, which they've been used to while Trump remains in charge. |
| | And there's no guarantee that his successor, whenever that would be, will change very much, if anything. |
| | So in terms of the trade deal that Trump offers them, it's almost certain that the price of trade barriers against China won't be worth it. |
| | Also, Trump is known for not honouring his agreements anyway. |
| | China also likes to throw its weight around, sure. |
| | But it is almost certainly now a more trustworthy trade partner than America. |
| | And China is the superpower right next door. |
| | Next, it's worth considering China's exports to America. |
| | Now, in terms of these sky-high import taxes, which will now make much of them unaffordable, but the Chinese exports which America really needs, and Trump has provided tariff exemptions for, China controls about 80% of the trade in rare earth metals. |
| | Absolutely vital for American tech, including military tech production. |
| | And China have restricted their exports of these. |
| | Now, if China really wanted to put on the squeeze here, they could cut these right back, Trump will have massive problems. |
| | Trump has not thought this through. |
| | The bottom line is, for Southeast Asian countries, which Trump is particularly targeting, by and large, they're going to trade more with China than the USA, certainly from now on, regardless of what deal they come up with, Trump. |
| | And for Southeast Asian countries, as well as countries elsewhere, the USA is threatening high tariffs, and China is not. |
| | Who would people prefer to do deals with? |
| | And then there's another consideration. |
| | Trump's deals are not binding. |
| | He has a history of breaking them. |
| | He is not a reliable or good-faith deal broker. |
| | Although I accept that the USA is very powerful and can bully a lot of countries, long-term, you just don't see how, if Trump forces countries to choose between the US or China, that anyone really chooses the USA. |
| | And China itself can ride out the storm more easily than America. |
| | It's bad for both, but more easily than America. |
| | China's not a democracy. |
| | China has prepared for this day. |
| | It's really pushed ahead with renewable energy, secured supply lines of food and so on. |
| | They control the critical minerals, which American tech companies absolutely need. |
| | Must just repeat my view of this nonsense as well. |
| | So many people still trying to work out some cunning plan behind the madness. |
| | He is just an idiot, seriously. |
| | That is actually the explanation. |
| | I have actually yet to hear an independent economic or trade expert expressing any other view. |
| | I've listened to so many academics, investors, former trade advisors over the last week, you know, whenever they talk about it. |
| | Idiot, moron, imbecile. |
| | These are the words they use to describe what Trump has done. |
| | These are not political commentators. |
| | They're not trying to be edgy. |
| | They're not trying to be rude. |
| | They're just explaining to people what's going on. |
| | There is no cunning plan behind this from Trump's point of view. |
| | There was an imbecile who thought, just as he claimed, that he could get Americans to pay way more for their goods, whether it be higher import taxes or higher prices for American produced goods, and convinced them that actually it was foreigners paying it. |
| | Trump thinks he can just do deals with individual countries one by one ignoring the trade networks which allow for more efficient production and lower prices for consumers. |
| | I mean, put it this way. |
| | In the UK, Liz Truss did mad shit, and people recognise that. |
| | They recognise she's an idiot. |
| | She's a loony, right? |
| | Trump is clearly dumber than Truss. |
| | So why do people think there must be a cunning plan where Trump is concerned, where they were quite happy to accept that Truss it was just because she was mental? |
| | He is ignorant. |
| | He is of low intelligence. |
| | It's really that simple. |
| | Yes, there are perhaps people whispering in his ear who have more cunning, but this tariff idea was hid, and he deliberately surrounded himself with people who would not stop him this time. |
| | He thinks his big mistake during his first term was getting advisors who would say, no, that's mad, Mr. President. |
| | So he's deliberately surrounded himself with other people who do not understand trade. |
| | And being honest, although there might be some smarter people advising him, they have no wisdom. |
| | There's no reason to suppose Trump is being advised by anyone who knows the first thing about trade or macroeconomics or anything. |
| | He does not seek out experts to advise him. |
| | He seeks out people who tell him that the mad shit he is proposing is a good idea. |
| | It's just that some of them balked last week when the bond markets took a tumble. |
| | This sort of means that in practice, he's effectively seeking out ignorant boobs to advise him. |
| | Hence the childishly ridiculous maths that was used to work out the original tariffs. |
| | And even then, they messed it up. |
| | And that is another advantage China has. |
| | They have prepared. |
| | They have made sure they can ride out a trade war with America. |
| | The way their society is set up is perfect for withstanding an economic siege. |
| | And they are also up against a moron. |
| | I heard someone say that in the White House, staff weren't watching a master playing chess. |
| | They were trying to stop him eating the pieces. |
| | The EU really needs to make sure that they have a plan to take advantage of this trade war between China and the USA, which could escalate to others later on as well, and offer a safe haven for others. |
| | China has already approached the EU with a view to cooperating on shaping the new economic system, which America no longer wishes to lead. |
| | It's very high stakes stuff. |
| | If America continues down this road, and the signs are that they are, and the reduction in tariffs for 90 days, by the way, doesn't change that, the basic premise behind Trump's withdrawal from the world economic system is still being maintained. |
| | This means unless Trump properly backs down, someone else will be leading the economic system which emerges. |
| | But now, who will that be? |
| | Finally, it's worth just pointing something else out in terms of the geopolitics. |
| | Brexit was in part promoted and funded by the Russian states because it had been one of their foreign policy objectives to split the UK off from the rest of Europe politically in order to weaken Europe. |
| | So Brexit was a Russian foreign policy objective for like decades. |
| | Well, China sees America as a rival in the same way Russia has seen Europe. |
| | Only here, Trump has voluntarily split the USA off from its allies without really having to do anything at all. |
| | They are definitely looking to massively increase their power from this. |
| | But there we are. |
| | Those are my thoughts. |
| | Let me know yours in the comments below. |
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| | Thanks for watching. |
| | Until next time, I'll see you later. |
| | Thank you. |