Trump's Doomsday Gamble In China Trade War

Authored by Finian Cunningham via The Strategic Culture Foundation,

President Trump dramatically resumed a trade war footing this week with Beijing, threatening to impose tariffs on virtually all imported Chinese goods to the US.

After earlier negotiations this month appeared to avert a clash, the Trump administration is back to full trade war mode. With fiery language, the US president and his trade advisors said they have run out of patience with what they claim to be “predatory practices” by Beijing.

For its part, China quickly hit back, condemning “unacceptable blackmail” by Washington. Beijing said it will not hesitate to respond in kind with counter-tariffs on American exports.

Markets in Asia, Europe and America tumbled, with companies and investors panicked by the prospect of a full-blown trade war between the world’s two largest economies, and the uncertain repercussions from such a titanic clash.

Trump is gambling big time. He is betting that China will be the “first to blink”, as the New York Times reported. That’s because the Trump administration reckons that with China’s huge trade surplus, Beijing has much more to suffer financially if it goes toe-to-toe with the US in a trade showdown.

“China has a lot more to lose than we do,” said Trump’s trade advisor Peter Navarro, who is a hawk when it comes to dealing with Beijing. Navarro, like Trump, has continually accused China of ripping off the American economy and workers through alleged unfair trade practices and theft of intellectual property from US tech companies.

During his election campaign, Trump fired up voters with tirades slamming China for “raping America”. Recently, the president railed against “China taking $500 billion out of our economy every year”.

But typical of Trump, the emotive charges and figures are not what they appear to be.

For a start, the US economy has been running a chronic trade deficit with the rest of the world for the past four decades. That’s largely because of a structural change in American capitalism whereby US companies and investors bailed out of the country to set up in cheaper labor territories, such as China.

To accuse China of being the problem is a deceitful distraction from the way American capitalists have historically cheated US workers with layoffs and downsizing. One of those capitalists profiting very nicely from setting up in China is Donald Trump’s daughter Ivanka whose clothes business profits from manufacturing in China and exporting to the US, thereby contributing to the American trade deficit.

Another issue is that whatever complaints the Trump administration may have about trade with China it should settle those disputes through the legal mechanisms of the World Trade Organization. If Trump thinks he has a case against unfair Chinese practices then he should trust the multilateral trading authority. Otherwise it’s a recipe for international chaos and a slippery slope to conflict, as history has shown.

But, as with many other facets of this administration, there is a contempt for multilateralism, and a resort to high-handed unilateralism. Rules, laws, what’s that? As one White House official was quoted recently as saying of the Trump’s administration’s attitude towards the rest of world: “We’re America, bitch!”

Trump is playing hardball with China in the belief that its bullying will see Beijing cave to its demands for rectifying trade imbalances. The Americans are trying to solve their structural, inherent flaws by strong-arming China into making concessions. Because China’s $500 billion annual exports to the US are about four-fold what the US sells to Beijing, Trump is betting that his Mad Max approach will scare into submission.

Trump’s browbeating manner is also grandstanding for his voter base in rustbelt states, who might feel a patriotic surge in sticking it to the Chinese. Mid-term congressional elections in November are no doubt on Trump’s mind to get the Republican vote out.

However, the president’s best laid plans are in danger of veering into a political train wreck.

Beijing has said it will not back down to intimidation. In an editorial in the Global Times, which reflects government thinking, the tone was combative: “It is US arrogance to believe that a trade war will exhaust China. But the boot is on the other foot. Trade is mutually beneficial to both the US and China. Scuppering bilateral trade would cause similar suffering to both sides.”

The options at Beijing’s disposal could wreak havoc for the US economy and Trump’s political future. Trump’s inability to see that speaks to his and his advisors’ petulance.

If China goes ahead with threats to impose counter-tariffs on US agricultural products, such as soybeans, corn and meat, the impact on farm states like Iowa, Idaho and Illinois across the mid-west will be severe. Voters from these states were crucial to Trump getting elected to the White House in 2016. By taking the US into a trade war with China, Trump will end up hitting his own political base hardest.

Another repercussion is higher retail prices for consumer goods like televisions and footwear imported from China, if Trump slaps on punitive tariffs. That will inflate consumer prices and crimp household budgets, especially among the lower-income population, who again tended to vote for Trump. Net result is that the fragile American economy would likely tank from cash-strapped consumers, who are already living on the edge. 

The far-reaching injurious effects of a trade war seem to have escaped the Trump administration’s planning. The president seems to have been carried away with a hubristic notion of American power and an irrational ideological hostility towards China. It’s all very well for him and his rich advisors to antagonize China over perceived wrongs. What about ordinary Americans though? So much for the famed deal-maker. Trump’s short-term recklessness betrays someone who is playing tiddlywinks instead of chess.

Yet, in this accounting, the real pain hasn’t even begun. China’s ultimate trade weapon is its massive holdings of US Treasury bonds. With nearly $1.2 trillion-worth in holdings of US federal debt, China is by far the world’s largest creditor for Washington. US-based news outlet Bloomberg calls it Beijing’s “nuclear option”.

“It can just stop buying US Treasury debt,” warns Bloomberg. “China is the world’s biggest Treasury investor, keeping US borrowing costs low, helping us buy more stuff from China. Ending this symbiotic relationship just when US budget deficits are soaring would devastate the US economy.”

Bloomberg adds that such a “doomsday” option “could blow up” China’s economy too. It compares the abysmal scenario to “mutually assured destruction”.

Arguably though, such mutually devastating economic consequences for China are moot. It has the alternative sphere of Eurasian economic integration and the new Silk Roads it has busily been building with Russia and others over the past decade.

If Trump pushes Washington’s belligerence too far with Beijing, the economic ramifications will be wide-ranging and dire for the globe.

China may just survive to trade another day with the rest of the world.

But one thing seems sure. With its chronic debts, deficits and dodo-like dollar, America will be ruined beyond salvation. Ruined by a president who brags about his “art of the deal”.


lost username Sun, 06/24/2018 - 23:28 Permalink

Mr. Cunningham am going to call bullsh*t on you. You sound more like a closet commi. Have a crisp $100 bet that you will be wrong on this one and Trump will succeed.

TGF Texas wadalt Mon, 06/25/2018 - 00:29 Permalink

God you fucking lib's are dense as shit. 

Trump says were going to build a wall and Mexico's going to pay for it. Everyone goes, "how?", then he says we need to re-negotiate nafta, and anyone with a brain, and that wasn't triggered, went "oh, got it, that's how!"

Trump says were going to bring back the jobs lost oversee's...Oversee's  being China. How do you bring the job's back to the US from China? Best way is to embargo all China's goods, our put crazy high tariffs on them, so enterprising people here in the US fill the void eventually. 

It's simple shit, really!

In reply to by wadalt

bshirley1968 HRH of Aquitaine 2.0 Mon, 06/25/2018 - 00:55 Permalink

You offer shit by way of factual evidence, you make zero attempt at a logical argument, but those that disagree with you and your man-crush are "snot tards"?

You need to shut the hell up before you embarrass yourself and your "team" of whatever-tards anymore.

Your best move is a down vote. You have nothing by way of argument or facts to back your weak shit up.

In reply to by HRH of Aquitaine 2.0

Bokkenrijder aleena.ange Mon, 06/25/2018 - 01:59 Permalink

Yes bshirley1968, these Trumptards are just emotional in their support for the Orange Jesus. His recklessness and campaign promises (waterboarding, support for the MIC and Israel) will come to haunt them, but they don’t think that far. 

As I said, these Trumptards here on ZH see themselves as ‘sophisticated’ but in essence they are the stupidest of the stupid, blindly following their charlatan Hitler/real estate peddler. 

Ive tried in the past to write lots of facts and arguments but it al falls on deaf ears. “You’re a Hillary supporter” is the only thing they can come up with. Just look at Trumps love for the MIC, support for Israel, adoration of waterboarding, hatred of Edward Snowden, and his love for debt (“King of Debt”) to see where this is all going...

What has Trump done to reign in the eavesdropping of the NSA? What has Trump done to reverse the Patriot and Freedom Acts? Reinging in the Deep State/MIC? Nothing! To the contrary, he even nominated Gina Haspel to lead the CIA and increased the Defence budget. 

In reply to by aleena.ange

Hugh_Jorgan Bronze Mon, 06/25/2018 - 11:00 Permalink

China would be mired in sporadic insurrection in <6 months if they lose the ability to maintain the current status quo. The majority of the appearance of their prosperity is a facade. The Chinese government controls everything vital and you know how efficient and imaginative government is, so if Xi and Co. don't find ways to acquiesce on a great many things in trade, and satisfy Trump's sense of "fairness" (not that I agree with half of his policies, BTW) a hot war is likely not far off. What we should fear in a protracted hot war with China. They have cornered the market on many resources while the West has busied itself cornering the market on hostile, ignorant refugees and selling self-loathing to their citizens.

In reply to by Bronze

beebpop Hugh_Jorgan Mon, 06/25/2018 - 11:54 Permalink

It's ALL THE SAME SPAMMER!!!!  --> ME!!  (I'm BACK!!!)

Leakanthrophy's PORN  and  MoreSun's WHACKED RAVINGS  and Biblicism SPAM ( Wadalt: "IsraHELL did it")    AND    TodaysFox SPAM ("I made $7000 sucking cock on the Internet") --> IT's ALL THE SAME SPAMMER ---> ME!!! (Hi!)  

>>>WELCOME  to our new Today's Fox SPAMMING tranny:  Aleena.ange

>>>WELCOME!  "Cryptopithicus Homme" -- "crypto" SPAMMER!!!!

HELLO SPAM-LOVERS!!!   BIG UP from the SPAMMER BUNKHOUSE here in the Methfilled Valley Trailer Park in Methfilled Valley, PA.  Good to see my men powow, Leakanthrophy and Wadalt and  PrivetHedge  and our newbies  MoreSun (a real bacon-loving attack dog!) and CHEOLL and sanctificado  and  gzcekkyret  out from under the couch sucking their own dicks at 3 a.m. and back on the threads SPAMMING like a Grease Fire in the middle of the night!!!! 

Welcome newbie MoreSun talking some heavy attack shit at 3am!    DARWIN, our Master Spammer is whacked!!!

THIS is an important week here in the SPAMMER's BUNKHOUSE (the leaking moldy single-wide in the trailer park).  This week I (we?) are celebrating SEVEN YEARS AND TWO WEEKS here on ZH, obsessively SPAMMING every thread we can with off-topic comments.  You see, there are dozens of "personalities" living in this one single sad SPAMMER's sick little mind, which he calls "Spammer's Bunkhouse."  How sick is that? 

Each of "us" (these innumerable fake log-on's) is represented by an ACTION FIGURE that Master Spammer ("DARWIN" is his name -- can you believe that?)  lines up on his kitchen counter and TALKS TO!!  WHACK JOB!!!


SAD BUT TRUE!!  I (we?) have wasted my (our) youth (or at least the last seven years) with at least one hand in my pants and the other hand SPAMMING ZH.  Yes, indeed.  DOZENS and DOZENS (maybe hundreds) of log-on's banned -- 
>>  "I made $7500 last week on the Internet sucking cock!": that's me.
>>  Biblicism: that's me.
>>  All the porn at Celebrity-leaks: that's me.
>>  Daily Westerner: that's me.
>>  "In the news....SPAMMER broomsticked by furious readers" -- registered in Nigeria) :: that's me TOO!! 

That's our life (all of us living in Master Spammer's Mind): mopping the floor at the Porn Cinema at 2am, working the French Frier at SONIC (demoted from the drive-thru window 'cuz my ZIT-covered face scared the customers), sucking cock on the Internet, and spamming ZH with an enormous Excel spreadsheet of the log-on's of dozens of "digital friends" who upvote one another and virtually suck my little micro penis..

MEET my current imaginary friends.  We all live in one SPAMMER's HEAD (and as ACTION FIGURES on his kitchen counter) but as for me, I have gone off the reservation.  These other "personalities" are pretty troubled.

More Sun  <<<  NEWBIE (a real bacon-loving attack dog!)
Cheoll   <<<  NEWBIE
Powow  <<<  NEWBIE
sanctificado  <<<  NEWBIE

gzcekkyret     <<<  NEWBIE

s12940448 <<< NEWBIE  sucks cock on the Internet -- joined "The Fallen"

ll951983  <<< NEWBIE  sucks cock on the Internet -- joined "The Fallen"
Mr Hankey  [R.I.P]   <<<  total utter WHACK JOB  -- joined "The Fallen"

You know SPAMMERS never die on ZH -- here's just a sampling of the banned log-on's ("The Fallen Spammers") ---

 beepbop, pier, lloll, loebster, ergatz, armada, Mtnrunnr, Anonymous, luky luke, Cjgipper, winged, moimeme, macki mack, tchubby, sincerely_yours, HillaryOdor, winged, lexxus, kavlar, lhomme, letsit, tazs, techies-r-us, stizazz, lock-stock, beauticelli, Mano-A-Mano, mofio, santafe, Aristotle of Greece, Gargoyle, bleu, oops, lance-a-lot, Loftie, toro, Yippee Kiyay, lonnng, Nekoti, SumTing Wong, King Tut, evoila, rp2016, alt right dude, altright-girl, alt-right girl, Blufin, Schlomo Scheklestein, BraveForce, Mr Hankey, sandraloopz0, enf83, ll951983



















In reply to by Hugh_Jorgan

Bokkenrijder Fishthatlived Mon, 06/25/2018 - 11:17 Permalink

Yup waterboarding. Listen to The Orange Jew a.k.a. Trumpmeister himself about waterboarding;

Here he is on the campaign trail in April 2016: 

Here is Dufus Trump in June 2016:

Keep on voting and rooting for this Orange Totalitarian MIC Clown and think that "this time it will be different."  


In reply to by Fishthatlived

Uchtdorf Bokkenrijder Mon, 06/25/2018 - 07:28 Permalink

I'll add to your list of unconstitutional things Trump has been too busy to overturn:

  • The Federal Reserve
  • Asset Forfeitures by local and state cops

He's happy to get this whole nation of people bickering over immigration issues or international trade, but he's still spending like a drunken sailor and increasing the national debt which makes Trump like all the other puppets who have lived at 1600 Pennsylvania Ave before him.

In reply to by Bokkenrijder

Couchtycoon Zero Point Mon, 06/25/2018 - 02:24 Permalink

are you fucking sock puppets done talking to each other, Real people with actual Ideas and opinions are trying to communicate and always i have to slide down past your name calling,hacky, bullshit dialog. Oh and while I am here I just want to add I HAVE NEVER READ AN INTELLIGENT POST WHICH HAD THE WORD TRUMPTARD IN IT.

In reply to by Zero Point

Memedada Couchtycoon Tue, 06/26/2018 - 09:12 Permalink

Ehm, your comment had "TRUMPTARD" in capital letters in it - and I must admit you're right. It seems to lack any form of intelligence.

The tard-thing is sad - I agree. Libtard, trumptard, hopium-addict or MAGA-delusional – all share one thing: they’ve been indoctrinated by US Inc. They just belong to two different segments of US society and are therefore targeted by different forms of propaganda and psy-obs. But both groups are equally played and controlled. If you support anything on the official political stage you’re a tool (a tard – and US is dominated by tards. This site is not an exception).

In reply to by Couchtycoon

Fireman spag Mon, 06/25/2018 - 04:21 Permalink

China own$ US! Yet the dense and ignorant protoplasm masquerading as humans can't grasp even basic economics.


As the IOU Pentacon "backed" (barely for now) Saudi Mercan toilet paper dollah gets flushed from the global sewer the chosenite Ponzi Wall St shitter will implode and unleash the mother of all toxic derivative tsunamis of shit that USSA has ever imagined. The Potemkin Village idiot "economy" of serial judaic wars in "our" muzz oil patch will be paid for in blood on the mean streets of Slumville itself. Get ready for civil war reloaded, you know we deserve it.

The Big Three never lie and beggar$ never ever get to choose!…

Unemployment pushing 23%!

T-Rump's ekonomic "miracle"!

In reply to by spag

DemandSider spag Mon, 06/25/2018 - 08:56 Permalink

No, it's the opposite, according to a recent Reuters poll. Respondents were asked if they would be voting red or blue in the mid terms, and more chose red than blue. Trump seems to bolster The red team's image. I know he drew a pretty large crowd in Duluth, Minnesota, this week, despite it being a predominantly blue city.

In reply to by spag

Oldwood Mactruck Sun, 06/24/2018 - 23:53 Permalink

As one of Trump's base, I will take the hit. I already have in his tax reform. If we think we can have war without sacrifice, without loss, we are destined to complete disaster.

Anyone who believes that we haven't already been at war economically with China for decades, is just plain dumb. We can decry our broken fiat system and endless debts and at the same time scream like frightened children in fear of pushing back against China and any others when we KNOW that the ONLY thing keeping us afloat is the US dollar reserve currency and DEBT will end us. The same has been said of Trump pushing back against progressives and the deep state. Yes we know they are corrupt, but we dare not resist. AS Holder said of the bankers, we couldn't indict them give the "fragility" of our economy.

In reply to by Mactruck

bshirley1968 Oldwood Mon, 06/25/2018 - 00:09 Permalink

You are one stupid son of a bitch.

At war economically with China? Really? Is that why hundreds if not thousands of American companies have moved their operations to China? Is that why dozens of fortune 500 companies have headquarters in China and generate 20-50% of their revenues from sales inside China?

It's not a war, you dumbass, it's a sellout! And your own corporate America and your own politicians sold you out. Wake the hell up!

I can assure you that if the demise of Lehman Brothers melted the American financial system, then a trade war with China will be slightly more devastating.

Here's one for you Trumptards who really think there is a trade war.....and Trump is fighting for you......…

In reply to by Oldwood

HRH of Aquitaine 2.0 bshirley1968 Mon, 06/25/2018 - 00:43 Permalink

No, you are the dumb bitch. Do you even know how highly leveraged the Chinese economy is at this point? How manipulated their numbers are even after being compared to US numbers? We fib a little, they flat out lie. We rehypothecate 10-to-1 while they do it 100-to-1 and don't get me started on shadow inventories and shadow banking! People thought Chinese ghost towns were big. Wait until they have to hunt down that ghost inventory!


In reply to by bshirley1968

bshirley1968 HRH of Aquitaine 2.0 Mon, 06/25/2018 - 01:03 Permalink

I don't give one shit about China and their economy, but you little Trumptards think Trump is going to lay down the law and everyone will kiss his ass or get crushed. Well, it is stupid asses like you that keep stupid asses like Trump thinking they are a "stable genius".

My points all along:
1. There is no trade imbalance.…
2. There is no trade war.....yet.
3. Fault lies with corporate America and politicians, not china.
4. These tariffs are designed to raise prices on the public.
5. Any trade war will hurt the US just as much or more than China.
6. This will not even come close to fixing any real economic problems.
7. Trump should be attacking corporate America for selling out our industry and economy.
8. Trump is interested in taking care of Trump.…

In reply to by HRH of Aquitaine 2.0

Golden Phoenix bshirley1968 Mon, 06/25/2018 - 02:17 Permalink

US beef was banned in China from 2003 until the Trump administration played hardball fulfilling a promise to middle America in the process. 

Have fun blaming China banning entire US industries on the US.

The outline for Trump's entire action plan has been his campaign promises. 

In order to reverse flow one first has to prime the pump in the opposite direction. One has to start somewhere and Trump is the only one thus far to have even tried. US ranchers being able to sell beef in China again is an early victory. Will the overall plan work as designed? Maybe, maybe not but what you fail to understand is the copious tears of Never Trumpers like you are a precious dividend. 

If all of our manufacturing is farmed out to China then we have zero defense manufacturing capability and have lost our sovereignty. Trump is trying to restore that and all you offer are melted snowflakes. Presumably you're still mad about losing access to the Target bathroom.



In reply to by bshirley1968

I am Groot bshirley1968 Mon, 06/25/2018 - 03:18 Permalink

Dude, you just aren't getting it. If we aren't buying the Chinks shit, they will fold like 1970's boy scout tent in a F5 hurricane. We're the fucking customer you retard ! We can buy shit from anyone in the world. There is NOBODY on this planet that's going to replace the US's lost business orders if we stop buying shit from them. They will collapse overnight. I can name five dozen countries that would kill to build factories and fill orders for the US.

They set all of this in motion by developing BRICS, pushing for a petroyuan, and trying their best to replace the dollar as the world currency reserve. They are playing with fire, because we can collapse them overnight. All for the cost of rejecting their cheap, shitty goods. Nobody needs 10 cheap tv's in their house or rubber dogshit.

In reply to by bshirley1968

scrone I am Groot Mon, 06/25/2018 - 07:44 Permalink

Starting a trade war with China is going to escalate de-dollarisation, not curtail it. All this trade war dumbfuckery will increase dollar demand in the short-run, but long-term every other country will be looking to dump USD because the US is quickly gaining the image of a rogue state that cannot be relied on.

In reply to by I am Groot

roddy6667 HRH of Aquitaine 2.0 Mon, 06/25/2018 - 01:17 Permalink

You know very little about China, yet you have such emotional opinions about it. 

The average Chinese citizen saves 36% of his pay for the future. In other words, the average Chinese family could maintain their current lifestyle by temporarily halting savings if their income dropped 36%. By cutting back on a few items, they could weather a 50% cut. Americans have a negative savings rate. Few Chinese have debt. 82% of the people don't have to pay rent or mortgage because they own outright. And there is NO PROPERTY TAX! Not a large percent of them own cars, and of those that do, most have purchased cash, not financed. Credit cards are pretty new--most use debit cards like UnionPay. Utilities are VERY cheap. They are provided by the government and it doesn't have to make a profit. 

Compare this to the average American family with debt up their eyeballs that need two good paying jobs just to eat and have a roof over their heads. 

Which family could weather tough financial times better?

In reply to by HRH of Aquitaine 2.0