Real motive for a trade war

Posted By Darren Winters on Jul 13, 2018

Real motive for a trade war

Could the real motive for a trade war be a build-up to war in the Pacific with China?

The Carnegie Council asked people in their audience to raise their hands if they think there “will be a war with China within the next year or so or a major armed conflict in East Asia generally. Maybe this would help show the real motive for a trade war

Only a couple of people raised their hands. But that vote was conducted in April 2017 when the consensus among most analysts was that the new Trump administration’s talk of a trade war with China was just that rhetoric talk (all bark but no bite).

Eighteen months later the world is wakening up to the reality that we are witnessing the end of post-WWII world order which fostered a period of relative political stability, peace, and prosperity.

So what could be the real motive for a trade war and demolishing the old world order?

Real motive for a trade warEverything has a beginning and an end, no system is infinite. Put another way, the old world order was going to collapse with or without a trade war. The era where the US’s largest exports treasuries (debt) in exchange for low-cost imports made in Chinese sweatshops is over.

Globalism created an elite global class with global serfs and it would have probably continued if China didn’t become too ambitious and take on USD hegemony, the badge on an Empire. But old Empires never stop dreaming about rising to the top of the food chain and being one day great again.

The real motive for a trade war between US and China is that the Red Dragon and the Bald Eagle’s claws are locked in a battle for the hegemony throne and the side which emerges as the winner will lead the next century.

The motive for a trade war could be about dollar hegemony fightback. It will be the largest importer which will have the most leverage with respect to tariffs and retaliatory measures. The US is the largest importer with $2,409 billion, 13.4% of global imports.

In other words, the Trump administration sees a trade war battleground as a target rich and easily winnable with the other side more likely to fold.

The future has gone retrograde and I say that with cynicism

The dynamics which caused the four horsemen on the apocalypse during the 1930s are currently in play today. While history doesn’t always repeat itself there are some eerie similarities. During the period of 1929 to 1934, according to the US State Department, world trade decreased by 66% – largely a result of subsequent trade wars after the passing of Smoot-Hawley.

Then the economy of Europe stagnated and like a pond of stagnant water, viral political ideologies bred and spread, the rise of fascism which ultimately led to WWII.

The real motive for a trade war today could be about provoking China to war. There has been a lot written about rising political instability in Europe and polarized politics in the US but little is being written about how collapsing the Chinese economy could create political instability in China which could also lead to war.

Submit a Comment

Your email address will not be published. Required fields are marked *

Subscribe to my Investment Newsletter and receive the FREE video:  3 OF DARREN’S BEST INVESTMENT STRATEGIES

You have Successfully Subscribed!

Pin It on Pinterest

Share This

Share This

Share this post with your friends!