Liberation or Ruination Tariffs – Part 13

Q: You are a strong advocate for China to engage the US on trade talks. Do you think China will lose its bargaining power by engaging the US in trade talks? How do you see this looming recession being different from those of the past? (Question from CC read club).

A: I will keep it short. Yes. I am a strong advocate that China should actively engage the US in trade talks.The reasons are very straightforward. The Chinese planners still harbor this magic belief that they can somehow prise the EU away from the US by presenting themselves as a stable actor. I don’t believe thats possible even if every cabinet member in team Trump behave like circus clowns, simply because for the last thirty years the EU has been emasculated to the point where they are really just vassal satellite states to the US. In the past. Yes, Europe has a high degree of economic and even military autonomy from the US orbit of influence under leaders like Gerhard Schroder and Helmut Kohl and Willy Brandt, but these days European leaders without a single exception are just all yes men pretending to real leaders who are completely incapable of independent policy formulation and execution. This is actually a side effect of being a long time US reliable ally, its like radiation exposure, you lose your manhood and your balls just disappear. If you want proof, just look at sad state of affairs with the forever pliant Japanese and Koreans. They are in every shape and form the quintessential vassalized states who have no other choice but to serve the US strategic geo economic interest even if they are imperiled. This is the small print terms and conditions at the back of the US reliable ally membership card, it reads as follows – Thou shall never go against US will of power even if it destroys your entire country! So much so these vassal states are exclusively and implicitly reliant on the US as a security guarantor, so if China believes these cockless half man nations like the EU and Japan and Koreans are able to act and think independently. They have made serious errors in their calculations. Makes far more sense for the Chinese planners to engage the US even if it is presently a nation of psychopathic policy flip floppers. This is how I see the calculation. Besides having talks is just what it is, having talks. There is no guarantee of any expected outcome, but at least there exist an open channel of communication. In my assessment it doesn’t pay for this trade war to persist without any complimentary talks simply because things can escalate very rapidly. You know Kompf many historians insist that one reason why Japan attacked Pearl Harbor was because of US oil and rubber embargo that posed an existential threat to the Japanese war economy, but if you read back from that period circa 1931 to 1942 one of the most compelling reasons for the Sino-US war actually emerged from the fact the Japanese war machine was terminally bogged down in Manchuria and China for over 10 years with nothing to show for all the effort and deaths. This was one compelling reason why Japan launched a war on the British and Dutch Asia…the Japanese Junta were really just looking for convenient exit door out of the stalemate war in China that sucked up nearly 1.5 million Japanese troops – like Yukio Mishima once wrote hara-kiri isn’t so much as an exit from existence as much as an act of grand vindication and absolution from ones past sins. I am not saying Trump would do such a thing, but distracting the public with half truths and conspiracy theories seems to be a regularly used toolkit of the MAGA movement and if they’re pushed to one corner with the dead grip of recession and run away inflation plus empty shelves in their supermarkets…anything is possible in Trumpland. Dont think what I mentioned is so fantastical – in 1982, when the Thatcher Conservative government was languishing at the polls that threatened their prospects for re-election…..they went to war over a couple of microscopic islands that no one had ever heard about in Argentina. All this merely unscores the importance of keeping communication channels open between the US and China, even if they do nothing except play Sudoku on their smartphones while pretending to conduct cost benefits calculations that would be better than having no talks.