Trump and ‘Global Trade War’ – A Product of the False East vs West Paradigm

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Back in September last year I posted an article about the numerous different trade deals that were being negotiated at the time:

TTIP, TPP and CETA: Foils for the Trade in Services Agreement (TISA)?

In the article I debated the possibility that three of the deals – TTIP (Transatlantic Trade and Investment Partnership) , TPP (Trans Pacific Partnership) and CETA (Comprehensive Economic and Trade Agreement) – may prove to be foils for a much more insidious trade pact, the Trade in Services Agreement (TISA).

Here are a couple of links which elaborate on what TISA is and how it differs from the other trade agreements:

The new TTIP? Meet TISA, the ‘secret privatisation pact that poses a threat to democracy’

Another Secret Trade Agreement – TISA

So far, President Trump has not made mention of the TISA agreement, negotiations for which have been ongoing for the past few years.

Since publishing my original article, TTIP has run into further difficulty and looks to be on the verge of failing (in its current guise). CETA, which is a deal between Europe and Canada, has been signed but is still subject to a vote at the European parliament level before being ratified into law. However, the trade agreement currently making headlines is TPP. This past Monday Donald Trump signed an executive order taking America out of the TPP deal, a campaign pledge he appears on the surface to be honouring. A deal for TPP was agreed earlier last year between participating nations, but failed to make it to the US congress in time for ratification before Trump’s electoral victory. Heading those negotiations for America was the former US Trade Representative Michael Froman, a strong advocate of the deal. Froman’s replacement, Robert Lighthizer, a former steel industry trade lawyer, is said to be especially critical of China’s approach to trade.

This from The Telegraph:

‘Years of passivity and drift among US policymakers have allowed the US-China trade deficit to grow to the point where is widely recognised as a major threat to our economy,’ Lighthizer wrote in 2010 testimony to Congress’s US-China Economic and Security Review Commission.

Immediately after Trump announced the TPP executive order, news outlets began to introduce China into the narrative. China has not been part of the TPP negotiations at any stage during the process. But according to some reports this could change into the future.

Politico commented that,

Trump’s first big move on trade policy — an executive order to withdraw from the Trans-Pacific Partnership, a trade deal among 12 Pacific Rim countries — is set to play straight into China’s hands as it seeks to become the undisputed regional power. Angry over the move, America’s traditional trade partners have already this week reached out to Beijing to forge closer commercial ties.

China is perfectly placed to move into the empty space created by the U.S. withdrawal.

Sky News also published an article citing China as a possible entrant into TPP negotiations:

Members of the Trans-Pacific Trade Partnership (TPP) are to try to salvage the pact despite Donald Trump’s decision to pull the US out – and could open the door to China taking part.

Australian Prime Minister Malcolm Turnbull said, ‘Losing the United States from the TPP is a big loss. There is no question about that. But we are not about to walk away… certainly there is potential for China to join the TPP.’

The interpretation following Trump’s executive order is that America is pulling up the drawbridge on globalism. In Trump’s inauguration speech, he was adamant that under his leadership it was going to be about ‘America First‘. As well as withdrawing from TPP, he has just signed another executive order to begin the process of building a wall between Mexico and the US in a bid to control illegal immigration (that’s the official story at least).

Trump’s persona as an isolationist, along with his anti-globalist stance, prompted China’s President Xi JinPing to speak about the issue at the World Economic Forum in Davos last week. Xi Jinping’s appearance marked the first time ever a Chinese President has attended the forum. Here is some of what he had to say:

‘Economic globalization created new problems, but this is no justification to write off economic globalization altogether.

Rather we should adapt to and guide economic globalization, cushion its negative impacts and deliver its benefits for all countries.

No one would emerge as a winner in a global trade war. Pursuing protectionism is just like locking one’s self in a dark room. Wind and rain might be kept outside but so are light and air.’

The global economy, according to JinPing, is like a ‘big ocean that you cannot escape from‘. He added, ‘The right thing to do is to seize every opportunity and jointly meet challenges and chart the right course for globalization.’

The most prominent part of Jinping’s dialogue is his open reference to a ‘global trade war‘. If, for example, we interpret this comment in the context of the Hegelian Dialectic, it positions Trump as the thesis (America First) vs Jinping as the antithesis (Togetherness Through Globalisation). Two apposing sides (again, on the surface) colliding to engineer conflict.

The third aspect to the dialectic – the synthesis – is what becomes apparent after the conflict has played itself out. As with conflict from the past – such as the second world war and the Bolshevik revolution – I believe what we are seeing between the US and China is two nations that appear to be at odds – this time through the vehicle of trade – but are in fact being manipulated towards a pre-determined synthesis.

Consider both countries on economic grounds. Both are prominent members of the International Monetary Fund (IMF). Both the dollar and the Renminbi form over 50% of the IMF’s special drawing rights reserve fund. More importantly, both the Federal Reserve and the People’s Bank of China are under the control of the Bank for International Settlements (BIS).

China’s part in the BRICS alliance (along with Brazil, Russia, India and South Africa) on first glance shows an apparent ambition to break away from the old western model of economics, but on further investigation is nothing of the kind. In fact, the whole concept of the BRICS was borne out of Goldman Sachs in the US.

The idea that these two nations are in a genuine battle with one another bears no semblance to reality. But when you control both sides and can engineer a conflict, out of which comes an advancement of the overall globalist agenda, it hardly matters. As long as a majority believe it, the elites behind both countries will carry forward their game of deception.

One vehicle that is capable of advancing conflict between the US and China is treasury holdings. Just last week Bloomberg reported that,

China’s holdings of U.S. Treasuries declined in November for a sixth straight month, as the world’s second-largest economy uses its foreign-exchange reserves to support the yuan. Japan’s holdings also dropped but the country kept its spot as America’s largest foreign creditor.

U.S. Treasury data show the country has dumped about $270 billion of U.S. government debt since its holdings peaked at $1.32 trillion in 2013

Should China continue to liquidate their US bonds at this rate, or greater, the eventual consequence will be a severe devaluing and undermining of the dollar. For example, if America did ever start to produce for itself, China’s exports would be substantially impacted. The loss of revenue may result in them liquidating further their treasury holdings. The same argument could be said for Trump imposing tariffs on companies still operating out of China and other Eastern nations. Servicing the cost of these tariffs could in part come from liquidating holdings.

This passage from Kenneth Rapoza, a contributor at Forbes, gives some insight into the economic aspect of the US and China’s relationship:

Within a decade, the Chinese government bond market could easily rival the U.S. dollar as a foreign currency reserve, and lower the weighting of the dollar in benchmark indices. That means that investment funds that are following that benchmark that says 75 of every 100 dollars needs to be in the greenback will then put 60 of every 100 dollars in the greenback once the index reflects the growing prowess of the Chinese yuan.

At present, it looks as though Donald Trump’s position on trade tariffs in particular has the potential to elevate the false conflict between the US and China to the next level.

Below is a podcast from economist Peter Schiff where he discusses Trump’s role in a potential trade war with the East.

According to a report from RT, Trump is urging some of the biggest car producers in the US to start producing their goods in America once again, under the pretext that it will create more jobs for American people. He has specifically threatened automakers with a 35% tariff on all cars made outside of the US if they do not comply.

To give an indication of how big the Chinese market is for American automobiles, General Motors, stationed in Detroit, listed China as their number one market in 2015 with 3.6 million cars sold compared to 3 million in the States. 

To put this into context, let’s look more into trade between the US and China.

China is by far America’s largest trading partner in the world. In 2015, American goods and services with China was estimated at $659.4 billion. $161.6 billion of that was in exports. $497.8 billion came from imports. Over the last ten years the rate at which China export goods to the US has ballooned. America’s trade deficit with China stands at $336.2 billion.

Up to November 2016, exports from the US to China were measured at around $104 billion. Imports, however, were estimated at $423 billion. A trade deficit of $319 billion.

Out of the twenty countries that America has free trade deals with, China is not one of them. Neither is their cooperation between them when it comes to the Trade & Investment Framework Agreements (TIFA’s). According to the Office of the US Trade Representative, TIFA’s are designed to, ‘provide strategic frameworks and principles for dialogue on trade and investment issues between the US and other parties to the TIFA.’

The one aspect of potential future cooperation comes from a staff research report from the US – China Economic and Security Review CommissionThey released a report dated August 1st 2016 titled, ‘Policy Considerations for Negotiating a US – China Bilateral Investment Treaty, in which a treaty was discussed as a possible way to expand bilateral investment between the two nations. The report also stated how such a treaty could ‘serve as a vehicle for each side to advance its broader international interests‘. Trade being one of them.

One has to imagine that this is now firmly off the table with Donald Trump as President.

So what exactly is the trading relationship America has with China? Whilst the import / export figures demonstrate the benefits of these two nations exchanging goods (even if heavily weighted in China’s favour), they give no indications of the expense incurred from such activities.

The World Trade Organisation is responsible for determining the maximum amount in tariffs that can be charged on an item. At present, numerous different items can be imported from China to the US without incurring any duty or tariff, such as a smartphone. A merchandise processing fee may be applicable for more expensive items such as an antique, but costs are generally kept low so as to maintain a high volume of trade.

Important to recognise, however, is that export prices are heavily influenced by exchange rates e.g. national currencies.

After Donald Trump won the US election, President Xi Jinping spoke at the 21-Country Asia-Pacific Economic Cooperation Summit in Peru, and said that,

‘We meet at a hinge moment in the China-US relationship. I hope the two sides will work together to focus on cooperation, manage our differences, and make sure there is a smooth transition in the relationship and that it will continue to grow going forward.’

There may well be a ‘transition in the relationship‘. But seldom does chaos to achieve such a transition run smooth.

Before Donald Trump withdrew the US from the TPP agreement, China had been advocating a rival ‘Regional Comprehensive Economic Partnership‘ as well as a more expansive ‘Free Trade Area of the Asia-Pacific‘.

Eric Farnsworth, who is vice-president of the Council of the Americas, remarked that Jinping’s speech was more an announcement of a ‘strategic realignment‘ in the Pacific Rim.

‘He clearly said we are open for business and we want you to come along . . . You compare and contrast that with where the United States is heading — and we may be looking more inward — it is a moment where if you are on the fence in terms of what direction you want to go or where your future lies you have to look at China.’

The phrase ‘Strategic Realignment‘ is worth picking up on, namely because it has similar connotations to a paper that Zbigniew Brzezinski (former National Security Advisor to President Jimmy Carter) wrote in April 2016 called, Toward a Global Realignment. Brzezinski’s article is sub headed with,  ‘As its era of global dominance ends, the United States needs to take the lead in realigning the global power architecture.‘ The American Interest website, which hosts the article, classifies it under the subject of ‘Strategic Vision’.

Aside from Brzezinski, an article published by Michael Schuman at Bloomberg suggests that Trump’s priority should be to negotiate a free trade agreement with China. This naive recommendation later gives way to a more interesting passage where Schuman writes,

It’s impossible to predict what Trump’s China policy will be, of course. The hardball tactics he discussed during the campaign, such as hiking tariffs on Chinese imports and labeling the country a “currency manipulator,” are much more likely to close markets than to open them.

I would suggest that closing markets is the true intention behind Trump’s posture on China. A posture which is being choreographed and manipulated from the shadows by the globalist elites.

In a separate article also written by Schuman, he discussed how China intends to create its own ‘national champions‘ to compete with and perhaps surpass America’s leading corporate brands:

Chinese leaders want U.S. consumers to buy Chinese smartphones using Chinese operating systems, instead of Chinese consumers buying those made by Apple Inc. 

A national industrial strategy called “Made in China 2025” is designed to promote the manufacturing of high-tech ships, medical devices, robotics and other advanced equipment.

International companies attest that the Chinese government has become less welcoming and the business environment more hostile. They run up against mysterious regulatory investigations, go-slow bureaucratic practices and old-fashioned investment barriers that hamper their businesses. Trump’s policies would give China cover to reinforce this approach.

Based on the evidence available, Donald Trump’s stance on trading tariffs is becoming a central plank to what I believe is an impending downturn of the world economy.

We’re looking at a situation where, if enacted, Trump’s policies would inevitably make goods coming into America more expensive to purchase. Not just from China, but from other Eastern nations that also make products which Trump will say can be just as easily produced in the US. For items such as automobiles and expensive electronics, a high tariff on exporting them to American consumers would mean businesses passing on the increased costs to the buyer. People would then have to take out yet more credit and loans to continue to pay for and satisfy their materialistic urges.

In amongst tariffs, Trump also wants to cut taxes for the middle classes and US based companies. This to me is a cover story. Trump would say that if you pay less tax, you have more to spend on other things. Like cars. Except few people can afford to pay outright for expensive products. They purchase them on finance, which psychologically makes people believe they are wealthier than they actually are. This is how a bubble forms in the economy, eventually inflating to an unsustainable level.

If Trump pushed a ‘trade war’ far enough, who’s to say that China wouldn’t respond by implementing tariffs of their own? A tit for tat with the US if you will. Or would they prove to be more conciliatory, in a similar fashion to Russia following attacks on their military in Syria and the murder of their ambassador to Turkey?

Whatever proved the case, the rhetoric between the US and China could quite easily turn into a world war of trade (as Jinping referred to) where goods become too expensive and imports/exports begin to dry up from East to West and vice versa. Importers and exporters lines of credit would freeze, banks would stop lending to one another and consumers would no longer have free access to credit.

A toxic mix that would precipitate a global economic collapse.

As the trade narrative develops, keep in mind the date of March 16th 2017. This is when the US will breach it’s national debt limit of $20 trillion.

It is a complete fantasy to think Donald Trump can continue the trend of raising the debt ceiling still further, whilst cutting taxes and implementing high tariffs on imports of goods which people won’t be able to afford without credit.

Don’t forget that it was Trump who warned back in December 2015 of a ‘big fat bubble’ in the US economy, one that he would rather see burst then than ‘two months into another administration.’ Ironically, two months into Trump’s reign will bring us up to the reactivation of the US debt limit.

Thirteen months on, and with the Dow Jones having just topped the heralded 20,000 level, Trump is no longer talking about a ‘big fat bubble’. Instead, he tweeted out his pleasure at seeing the Dow reach its landmark number. In doing so, Trump has now taken ownership of the number, and by definition, the economy from here on in.

If economic decline ensues under Donald Trump, he and his band of followers will be mercilessly scapegoated and held responsible by the left of the false political paradigm. A tangible recipe for conflict.

Whilst Trump’s supporters may clamour behind the moniker of ‘Make America Great Again‘, the objective among us can see past the rhetoric and the sun kissed words of hope. The whole concept of putting America first betrays how integrated the US economy is with the global economy.

Trump is purporting an all gain and no pain scenario. All throughout his campaign trail he came out with the same empty falsehoods of,

It’s gonna be so great. We’re going to put America back to work again. We’re going to create jobs, rebuild our industries, cut taxes, invest in our infrastructure. We’re going to make our own products from now on. Americanism, not globalism, will be our credo.

What he failed to inform his supporters of is that you cannot rebuild US industry and in turn withdraw a sizable amount of your economy from the current globalised structure without initiating a collapse of some degree. Not when you consider how interlinked the global economy is with that of national economies, through areas like derivatives in particular.

Through institutions like the IMF and the BIS, you now have every major economy bound to the globalist ideal. Ructions on one side of the world are quickly felt on the other, which is a deliberate consequence of globalism.

So where do global trade deals come into the equation? Over time the likes of TTIP and TPP have attracted negative publicity, resulted in public protestations and limited success during negotiations. They have been vilified throughout the West for the secrecy of their negotiations, and how they are designed to favour transnational corporations.

Isn’t it rather curious that just as these trade agreements flounder, a ‘global trade war’ as touted by President Xi JinPing, with Trump as the antagonist, begins to build momentum?

An important aspect here is the relation between these agreements and the subject of trade tariffs. Back in February 2016, a leak of the TTIP text suggested that 87.5% to 97% of all tariffs would be cut to zero. The TPP agreement stated that over 18,000 tariffs would be cut. And the CETA agreement is estimated to eliminate 98% of the tariffs between the EU and Canada.

If a trade war happens, those figures may begin to look more enticing when world leaders ponder on a solution to an ensuing trade crisis.

A synthesis to a trade war – a war specifically chosen as a catalyst for global economic decline – could be the resurrection of previously abhorred trade agreements. Agreements that would gain renewed credibility following an economic collapse, especially as they promote low to zero tariffs.

In light of a collapse, and people’s purchasing power becoming heavily compromised, does it not stand to reason that new or reinvigorated trade deals would now be demanded by a populace that were previously apposed to their introduction?

TPP and its ilk may not gain a consensus now. But they are potentially one crisis away from being perceived as a future solution to a ‘global trade war’.

China would represent one side of this conflict. As power shifts East, they would likely come out of it stronger and with a greater standing in the world, to the detriment of America and the dollar.

Writer and researcher Antony Sutton wrote these prophetic words back in 1983 in his book, ‘America’s Secret Establishment‘,

By about the year 2000 Communist China will be a ‘superpower’ built by American technology and skill. And who is to say that they will not make their peace with Moscow after 2000 and join forces to eliminate the super-super-power – the United States? 

With tensions between the US and Russia having accelerated under Obama’s presidency, it is something to consider as Donald Trump pushes on with his policies to put ‘America First’.

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