Tariff Trump – what a fold

The analysts have had time to read the short joint statement after the US / China Tariff talks and are beginning to see what a failure the Tariff War on China was and still is.  It is such a failure that it is not even spectacular, but somewhat boring and nobody wins in a trade war. The US Tariff War with China has been set back in reality to the day before what Trump called ‘Victory Day’. This history is wiped and the so-called reset simply resets the chess board to where it was at the time of ‘Victory Day’, a scant few weeks ago. China knows that they do not need the US for trade but Trump started to say he must ‘save Christmas’, as the ’empty shelf’ phenomenon started hitting the US.  So, they have set 90 days for something.  It is not quite clear what.  China will use the 90 days to continue moving supply chains away from the US and so will most other nations as trust is irrevocably lost. What the US will do with the 90 days is open to conjecture.

Rare Earths exports from China are still not happening. The latest from China is that they will work on a new mechanism for trade. By now everyone knows that the US refuses to appoint a representative to the WTO body that oversees trade disputes and no dispute resolution can take place because there is no quorum. In this way they have laid lame the organization that was set up to solve these kinds of global trading problems. The hegemon really does not like it if they have to obey their own rules and they invariably break the system.

The one trade deal that we know about, with the UK, is a nothing burger.

President Xi Jinping delivered a speech at the opening ceremony of the fourth ministerial meeting of the China-CELAC (Community of Latin American and Caribbean States) Forum in Beijing on Tuesday and trade from that side of the world is fast moving to China.

Trade tensions have eased though. There is not a violent decoupling, but I cannot help but see that decoupling is continuing in any event. A few years ago when Russia’s external funds were seized and remain so because of the SMO, the world stood back and said, ‘We cannot trust these people and have to divest from their banks and financial technology’. Dedollarization and financial dealings outside of the Western sphere started taking a bigger slice of the thinking and action of countries. The Tariff War did the same, but for trade. The thinking is the same: ‘We cannot trust these people and have to divest from trading with them.’

Two necessary planks for the hegemon’s elites luxurious existence on our planet is being removed from the bully; Their money and their trade. They have weapons left, for as long as rare earth minerals last. Nevertheless, Trump’s visit to Saudi Arabia started with a weapons deal. The US State Department has approved the sale of Chinook Helicopters, machine guns, missile warning systems and software/communications equipment to the tune of $1.32 billion in arms sales to the Arab Emirates. And so we see the Pay for Play deal in its dimensions – a luxury plane for Trump, weapons for the Gulf states.

Paul and Ken from the Sirius report discuss how the problems that gave rise to the Tariff War are still there, and remain US problems, as nobody solved their problems for them and nobody is keen to pay the vig to the mob bullies.