There Will Be No Trade War With China: They can’t afford the bullets

I really haven’t heard too many people cover the real ambitions of President Trump’s trade talks, that he wants to essentially get away from trade tariffs all together. Rather Trump wants to move to an international system of free trade in a way we’ve never seen before, where real value is exchanged evenly between countries based on the real needs of the products. Who wouldn’t like that unless the whole goal of tariffs were always intended to redistribute wealth around the world using the United States as the foundation for the theft? The whole issue has left many countries vulnerable who have been doing just that, robbing America of goods and services by making a lot of money off the imbalance, it has all been just another way of subsidizing socialism at the expense of capitalism and Trump has put the issue front and center, where it should have always have been. Given that, it’s a mystery how this would cause anxiety in the markets, other than it destabilizes the old way of doing things. It’s a mystery, because it actually is a chance for a lot of investors to make a lot of money. But it does expose many of these socialist and communist governments who have been hiding their terrible efficiencies behind trade tariffs displaying for the first time in the modern age the true value of goods and services.

I have found it fascinating over the last few days to watch Elon Musk’s Twitter account where he has been arguing with socialists and anarchists with some rather bizarre new definitions of what it means to be a socialist. For those who don’t know many people under forty these days socialism is the new trend, and we should have expected this, because that is what young people learn in their public educations. I would attach the press corps into that category, they are mostly young people who were born during the 1990s when the Clinton’s were in the White House and they only really have ever known a Clinton, a Bush, or a Obama in the White House so they only understand extreme government tampering with markets as a reality of basic economics. But Trump as a true capitalist is suggesting a global trade policy that terrifies many of those nations who are filled with the kind of youth who were quite perplexed over Elon Musk’s ostentatious definitions of socialism.

The reason that China is particularly vulnerable to the debate of the theft of intellectual property essentially comes down to their communist closed society. Such countries where people are not free typically do not have the ability to generate new and creative products, so they must obtain those creative endeavors from outside their country. Up until the time of Trump American presidents, especially Obama have sort of allowed China to cheat off our paper in class because it helped them advance on the global stage—because Obama had a soft spot with communism and wanted to see it work. So trade deals were worked out in a way that China could openly loot American markets in a way that fed intellectual property into the communist country that was suffering from creative infusion by their people.

 

 

As things have been China has artificially been propped up as a superpower, they were given vast amounts of wealth as an emerging economy due to their cheap labor and closed society as a state-run government. That has allowed them to pour a lot of money into destabilized regions of the world knowing that they wouldn’t get back their money but could trade those debts for control of those investments. That ironically has been the plan behind Chinese investments into the United States, to eventually call in those loans and to gain control instead of money. The fuel behind that opportunity has been trade imbalances and intellectual theft China has been able to exploit with a lot of help from governments around the world who want to see the communist formula work.

However, what makes them particularly vulnerable in China is their very nature as a closed society. Without the protections of tariffs that allow China to play big boy ball on the global stage, they are extremely vulnerable to foreign competition, such as American agriculture. The typical American farmer can outproduce anyone in China and Russia simply do to the type of society that America is, a free nation that has functioned from minimal government tampering, so they tend to be highly efficient due to the fact that most of the personal investment of the farmer goes back into their trade. That is not the case in communist countries where private ownership into their trade is micro managed by the state. That makes it extremely difficult for Chinese farmers to compete with American farmers for the trade of food. Even though China outnumbers the United States with population density, America is able to do much more with much less because of the incentive of their workers to own and produce their own goods.

Trump’s trade policies are not isolationist as many economists would like to believe. Simply Trump’s trade position is to recognize the obvious, the strength of the American markets is the high ground for which the rest of the world must rise up to in order to compete toe to toe, and to do that those origin countries will have to give up on the restrictions of communism and socialism to do so. For a world that has been taught that socialism is the way to go, of course they are disjointed to see how Trump is advocated free trade for everyone. Trump’s high/low game with China is to eventually get them to accept open trade, which he knows they cannot afford to do. But they’ll also never admit it as a communist country—so Trump is very quietly doing back to China what they have been doing to the United States since Clinton was president, he is calling their bluff which is a capital investment of its own and letting them hit the rocks where America will be there to pick them up off the ground with a huge demand for American products. It won’t be other world markets that suffer under a Chinese collapse, it will simply put value where it belongs, into countries who have allowed capitalism to thrive and can meet the true needs of global production against the theft and corruption that occurs in closed markets.

Without discussing the different economic philosophies of these trading nations, it has allowed the communists to hide their vast evil behind tariffs artificially propping up the authoritarian regimes at the expense of those functioning from freedom. We have been led to believe that China is doing something special and that we all need to bow down to it, but in reality, the opposite is true. America doesn’t need China, China needs America. From the perspective of Trump how can the United States stop the threat of China into the South China Sea at the expense of Japan—don’t threaten them militarily, expose them financially. Keep them from making such moves because they simply don’t have the funding to invest in such projects. Up until now the fuel that has allowed the Chinese government to threaten to become superpower status has been in these trade imbalances. By Trump forcing a value to value trade of equal measure it will force all these communist and socialist countries to produce on an equal footing with America, which they will not be able to do because of the nature of freedom over totalitarian control. People are far more efficient when they get to keep the wealth they produce as opposed to countries who siphon off that wealth through corruption to enrich themselves off the effort. That happens in China in extraordinarily evil ways, and Trump is exposing it. There won’t be a trade war, because China can’t afford the bullets.

That is the brilliance of Donald Trump’s trade plans with everyone. Those most hurt are those who have been allowed to hide their true value behind poor economic philosophies. When Trump says the United States isn’t going to continue to be the world’s piggy bank are those same socialists arguing with Elon Musk who don’t understand, because they haven’t been taught, what the real difference between capitalist governments and socialist ones really are. The fairest thing to do would be for all markets everywhere to be fair and open, trade value for value. But governments that are used to lots of government tampering and use state ownership of resources to attempt to compete with free people in the United States know they have to be subsidized through tariffs if they even want to participate in the big global game. And by forcing markets to compete with each other evenly, Trump is exposing the tyranny of communist regimes who have big problems going toe to toe with freedom. Trump isn’t an isolationist, he’s simply calling a big global bluff that has been allowed to simmer but was always a house of cards about to fold. China is a propped-up superpower and investors were always going to find that out eventually. Forcing fair trade only brings that to a reality faster, which is good for everyone really, because it saves America so that the United States can continue to help the world the way it has. But the wealth redistribution that has been going on is coming to an end so that everyone involved can measure value for value the way it should have always been. And that is a good change that will bring great peace to the world in just a few years without having to fire a single shot from our military.

Rich Hoffman

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