CHINA Trade War – Unraveled

Communist China – is telling the EU to come together and work against the US in the trade war that is rapidly escalating…   Germany now wants to be acting mediator to resolve the conflict on behalf of China and the US.   And while Germany appears to agree that China has had an unfair advantage for years – and everyone was afraid to do anything – they still negotiate from a position of fear, instead of rationale.  Which is why we are in this situation to begin with.

It’s like playing Chess without a Queen or King…  what’s the point?

The deficit trade with China has been ignored for decades and now we have a President willing to narrow that gap, but the EU is still curled up in a ball of fear and ‘what ifs’.

It is a bizarre mentality that is willing to continually erode trade out of fear of retaliation when the continued spiral will only grow steadily until China is the wealthiest country – and global control has been attained.  It is the race between the ‘tortoise and the hare’.   In the end, if the EU was a bit more observant they might see that a positive result could occur wherein trade between the US and the EU could heighten leaving China on the outside…   In other words, trade would simply ‘shift’.

The US is not alone in its trade deficit with China.  The EU deficit is also a significant number hitting over $175 billion in 2016 comprised mostly of ‘industrial products including machinery, transport and appliances.  Exports have tripled since 2006 rising from roughly 60 billion to 160 billion, while imports have risen from about 195 billion to 350 billion.   Trade with the US is considerably more with the US exporting valued at $501 billion and imports at $592 billion.  The EU thus has a surplus with the US of roughly $92 billion.

Seems a rather logical conclusion that trade with the US is much more valuable than China.  Trade with the US could grow to cover any deficiencies with China, and everyone would be happy… except China.

While the US and China trade with the EU are overall relatively neck-and-neck, the US provides a surplus.  The question remains, do you, the EU, support a Communist state or a Democratic state?

China is the largest export economy in the world generating a $736 billion surplus.   Its main exports include:  computers, broadcasting equipment, telephones, circuits and light fixtures.   Top imports are:  circuits, oil, gold and iron ore.   The US is its largest export partner and Hong Kong is its largest import partner.

From a purely business standpoint, the numbers put China on the defensive.

The argument is the fact that China holds the key in their ownership of US Treasuries which currently stands at roughly 7% of total US debt.   What is not so widely discussed is the fact that during the Obama administration, China quietly divested 97% of its US holdings.  Of the $14,34 trillion of US government debt, $4,64 trillion was intragovernmental, meaning that the government borrows from one pocket to give to another pocket. Sort of the classic Ponzi Scheme we put people in jail for.

A shell game of ‘guess where the money  is’ is how the government has routinely claimed that Social Security is funded – albeit by ‘debt’.  Debt for which there is no return because we continue to operate at a deficit in trade and spending!

Because that’s the game of how to destroy the US and gain global power.

So what Trump is doing is trying to unravel that absolute destructive mess decades of corrupt Presidents have created at the behest of the global elite.   And it won’t be fun, and it won’t be pretty, and sometimes it will hurt, but from an economic standpoint it is the ONLY solution.  

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