Alex Christoforou and Alexander Mercouris discuss the breakdown in trade relationship between the United States and China. After the talks reached an impasse, Trump threatened to raise tariffs on $200 billion worth of imports from China [raising the rate from 10 percent to 25 percent]. The increase will take effect on Friday.
My comment: Trump keeps mentioning how China pays and will pay for his tariffs and how great it is that the Chinese are fueling the US Government with [ironically] its own fiat money. Chinese-owned dollars sit on the Federal Reserve’s electronic ledger, by the way.
Every mainstream and heterodox economist will tell you that consumers pay these tariffs, not exporters. I must stress the fact that the only way the Chinese are paying for these tariffs is if they agree to decrease their markups to accommodate Trump’s tariffs, in order to maintain their market share [which is shrinking]. That being said, celebrating this [as Trump is doing] doesn’t square with his promise of bringing back jobs from China. In fact, even if China’s share of the US market were to vanish, that gap would largely if not totally be plugged by other foreign countries, NOT by domestic production & employment. Given Washington’s belligerent stance, Beijing is securing commercial and strategic ties with other important state actors and it’s concluding these agreements in currency swap operations, which bypass the US state financial system.
Trump is a master when it comes to wielding smoke and mirrors, both domestically and at international level. Many think Trump is an Anti-Globalist, but that is not true. He is a Globalist who wants to keep the US as the ‘grand master’ of that cabal and is actively combating efforts led by other countries [like Russia] to create a multi-polar system. As far as the ‘one world government’ idea is concerned, the US is that entity de facto [albeit not in its complete form] and wishes to remain so at any cost, even if the price is a new Cold War and needless mayhem across the globe. The most eloquent [recent] example of such needless death and suffering is this paper from the Center for Economic and Policy Research (CEPR), which finds US Sanctions on Venezuela Are Responsible for Tens of Thousands of Deaths!