by Chris Faure for The Saker Blog
The Trading Community
I grew up in the dark continent on farms, where, in the local trading town, my parents owned the meat businesses, the Jews owned the general store, the Indians owned the fabric store and sold shoes and pointy bras. My mom owned the fashion store and hairdresser. Of course, there was the mechanic who fixed cars and tractors and big harvesting machinery and the movie house where I saw the first opera when the traveling opera came to town and fell in love. Of course, there was the school, the doctor and the pharmacist and a Church or three. We also had the Portuguese Cafe, where we could buy chocolates and candies and bread and milk and fresh English fish and chips. The joint clientele of this trading community was the forestry workers, the mine workers and the farmers of the area. It was a well-off little community with a large forestry industry and gold mining.
While we told the most offensive jokes about the Jews and the Indians and the Portuguese, and to be sure they must have told the nastiest jokes about us European style white ones, we all equally hated the Colonizing English rulers and together told dirty jokes about them while all the kids happily went to school together and played together.
This little farming town was bound together by its trading class.
When the trade started to fracture with bigger food stores and chain mechanics, the town fractured, and where our main street was with the trading class, now there are only a bunch of Korean stores, selling stuff that only Korean folks buy, to Korean folks.
The Power of Trade
This is the power of trade, it can bind people together, or it can fracture communities and whole countries. The Chinese know this, hence BRI has no structure for war, only for trade.
We look with dismay at the geopolitical situation, and it is clear that something has to give as the U.S. clearly cannot hold on all the fronts they have opened. Mr. Trump may end up having to choose his favorite war, the one where he feels comfortable, and he does not have to see or count dead bodies and spectacular explosions, but he can hide the results of the Silent Economic war from his own eyes while standing on the China Bad plank as his 2020 mission to win the election.
Tom Luongo says: “At this point, Trump is fighting a war with everyone not named Israel and Saudi Arabia.”
Just like our little town, this economic war will fracture farming communities, trading communities, and countries. As we have seen in India, we are beginning to get similar notices of desperation suicides of farmers in the U.S.
An economic war is a Silent Killer. It will create conditions for the US to become Gulag America deeply into cultural schizophrenia to avoid all of their so-called enemies, and for China to take the lead as biggest trader in the world today while the U.S. is off fighting their own internal windmills.
It seems as if Steve Bannon (after his successful trip to change Brazil into a neocon enclave and start similar initiatives colored with racism and shades of white supremacist, in Europe), has been called back to run this Economic War. He began with an Op-Ed in the Washington Post. While WaPo is not my regular reading, this one spells out the 6 ‘understandings’ that the U.S. should have about this Economic War.
It makes interesting reading to read the understandings in full. The 6 understandings are in short, and my comments are on the right hand side. (Please read the full set of ‘understandings’ at the link.)
|The first understanding: The CCP has been waging economic war against industrial democracies ever since China joined the World Trade Organization (WTO) in 2001, and now China has emerged as the greatest economic and national security threat the United States has ever faced.||Note: Direct aim at the CCP (Chinese Communist Party) – Steve is fighting communism and it is the same old story … Those warmongering ChiComs are coming to get us!|
|The second understanding: The trade deal under negotiation this month is not a deal between two similar systems seeking closer ties, as its cheerleaders on Wall Street and in the media and academia argue. Rather, this is a fundamental clash between two radically different economic models.||And of course, if you read the full second understanding, the Chinese economic model is terrible, putrid and simply wrong and those enlightened Westerners have the best method and are morally oh so superior.|
|The third understanding: Chinese state capitalism is highly profitable for its owners — the members of the CCP. Stagnant state-owned enterprises gain a competitive edge through massive government subsidies, and the cost savings won by stealing the intellectual property, technology, and innovations of foreigners.||Chinese State Capitalism he says – The State should not own anything, he says. But, if you take a look at what is happening right now with Google and Western Technology companies, they are ‘joined at the hip’ with The State in the West and they have all joined the have all joined the economic war (See below). Jump for Trump and the Western technologists say How High.|
|The fourth understanding: Certain Trump advisers inside and outside the White House are playing on the president’s well-earned pride in a rising stock market and a fear he might lose the Farm Belt to try to box him into a weak deal. But it is a decidedly false narrative that any failure to reach a deal will lead to a market meltdown and economic implosion.||Now Steve takes a turn at protecting Mr. Trump for the 2020 election. In reality, the farm belt is up in arms and really upset that Mr. Trump calls them Patriots, while he is destroying their livelihoods. Farmer’s bailouts only manage to extend the agony of the farm belt.|
|The fifth understanding: Even the toughest agreement needs effective monitoring, which is difficult even with accommodating partners and perhaps impossible with China. The danger is for the president to sign what appears to be a reasonable deal and find out several years later that the United States was hoodwinked.||And, if the Chinese boogieman does not get you now, it might just do so in the future. One just cannot trust these yellow hordes, according to Bannon.|
|The sixth understanding: The world now bears witness to a rapidly militarizing totalitarian state imprisoning millions in work camps; persecuting Uighurs, Christians and Buddhists; and spying on, and enslaving, its own population.||And this is so trite that it is funny. China is persecuting its own people. Have we not heard this drumbeat before?|
And here comes the cherry on the Bannon cake of ‘understanding’: “The central issues that must be faced are China’s intentions on the world stage and what those ambitions mean for U.S. prosperity. With our country at a crossroads, it is more important than ever that Trump follows his instincts and not soften his stance against the greatest existential threat ever faced by the United States.”Just then they came in sight of thirty or forty windmills that rise from that plain. And no sooner did Don Quixote see them that he said to his squire, “Fortune is guiding our affairs better than we ourselves could have wished. Do you see over yonder, friend Sancho, thirty or forty hulking giants? I intend to do battle with them and slay them. With their spoils we shall begin to be rich for this is a righteous war and the removal of so foul a brood from off the face of the earth is a service God will bless.””What giants?” asked Sancho Panza.”Those you see over there,” replied his master, “with their long arms. Some of them have arms well nigh two leagues in length.””Take care, sir,” cried Sancho. “Those over there are not giants but windmills. Those things that seem to be their arms are sails which, when they are whirled around by the wind, turn the millstone.” Cervantes’ Don Quixote
Now Bannon is on the media trip to tilt at these windmills and stop the world’s millstones from turning.
Who is posing the existential threats? “Us” Versus “Them”
So now China is an existential threat to the United States. Does this not sound like creating the basis for war talk to you? What of this is different from the Russia derangement? It is just the same old story, the same old positioning of creating enemies, using different words. Civilizational differences are now weaponized by those who we can argue do not have a civilizational history of any great import. Hamburgers, Hotdogs, Disney, Madonna and Barbie Dolls do not a civilization make.
So, while the U.S. demanded structural reforms from China during the Trade War, and China absolutely refused, at the end of last week, Trump took aim at big Chinese businesses, placing them on lists where trade becomes almost impossible and creating an Economic War. Huawei and ZTE Corp are easily recognized here. The U.S. Department of Commerce announced that Chinese technology giant Huawei and 70 of its affiliated companies would be included in an “entity list” of export controls, prohibiting Huawei from buying technology or parts from U.S. companies. Today we see that Google, Intel,, and a raft of other Western technology companies are joining this economic war to kill a Chinese enterprise and all who work for it. And they call it righteous.
As is usual in the “Us” Versus “Them” U.S. methodology, we can always wait for the backtracking after the insulting war talk. Early yesterday morning the penny dropped for U.S. companies using Huawei technology, and they had to quickly ask for a reprieve from the U.S. Commerce Department because somewhere they use Huawei equipment. A 90-day reprieve for certain U.S. broadband companies and wireless customers was granted to figure out plan B. (Spoiler alert – there isn’t a plan B). Your broadband possibly runs on Huawei equipment and let me explain how close this economic war is to you and me.
From the White House into My House
A few months ago, I had to buy a new smartphone and eventually settled on a sweet little Huawei, reasonable on price and the most intuitive smartphone ever. I got to like this phone. This morning, I hear that Google decided not to extend usage licenses to Huawei for the Android operating system.
So, now Mr. Trump’s economic war is causing havoc directly with my phone – This is not the kind of fight that will leave you or me untouched.
Future Huawei phones, which run Google’s Android operating system, are set to lose access to updates to some Google apps, including YouTube and Maps, but don’t worry, but the existing devices will be safe.
Also, the soft pressure on China is increasing. China is being interfered with in terms of oil imports (Iran, Venezuela) and the South China Sea issues which China is busy negotiating with their neighbors are continually being interfered with by U.S. aircraft carriers or some level of task force of some or other kind making passage to test ‘freedom of navigation.’ And in the U.S., not to be left behind, the U.S. Department of Homeland Security issued a warning on Monday that Chinese-made commercial drones may be sending sensitive flight data to China. Nearly 80% of the drones used in the U.S. and Canada come from DJI, a Chinese commercial drone manufacturer and these drones are widely used by farmers, law enforcement and any child that has a play drone.
Vietnam is the place about 20 years behind China in terms of wages and level of development. It is beginning to hop with manufacturing facilities moving there, to avoid trade tariffs. These businesses are still in Chinese hands. It won’t be long though, and these businesses may as well save their money as this is an Economic War that will not leave any place undisturbed.
Take a look at those winning trade deals
Can this man negotiate a trade deal? Or is he trying to lead a country with ‘off the cuff’ decisions?
“Starting Monday, our great Farmers can begin doing business again with Mexico and Canada. They have both taken the tariff penalties off of your great agricultural product. Please be sure that you are treated fairly. Any complaints should immediately go to @SecretarySonny Perdue! 7:29 PM – 19 May 2019″
Aha, it looks like progress, yes? What is not mentioned is that tariffs on Mexican and Canadian steel and Aluminum were dropped, and in a reciprocal action, Mexico and Canada lifted tariffs on the agricultural products. So, that great trade deal that Trump negotiated with Mexico and Canada is back to where it was, and it is no reprieve. There is only some normalization.
“But now Canada and Mexico will get a reprieve, as the U.S. has reached a deal to lift tariffs on steel and Aluminum coming from those two countries. This eliminates a huge hurdle to the ratification of the United States-Mexico-Canada Agreement (USMCA), the revised version of NAFTA.”
We still ask ourselves the same question. What is it going to take for the U.S. to make their appropriate place in a multi-polar world because they will not be allowed to be a single hegemonic power player any longer. There is no doubt about this. Consider Dmitry Orlov’s long list of things that the US can no longer get done. (Color revolutions, false flag attacks, troop pullouts, trade wars. The one thing they can still get done is causing humanitarian disasters).
Do you understand now that the U.S. in its current incarnation is not agreement capable as is the official stance of Russia, and China will not make a deal with them, but China will keep talking. The fear now is that China will prohibit any rare earth metal sales to the U.S. in a tit for tat action. Huawei will smile.
Think about all these issues through the prism of how the U.S. is trying to maintain it’s global hegemony. The Russia derangement is cooling down, and the China derangement has taken over the airwaves with the full U.S. Administration and the media in lockstep. Can we now say Russia won? A few days ago it was Russia Bad full-on coverage, and today it is China Bad full-on coverage.
There is nothing new here, excepting a welcome groundswell of resistance opposition in the strangest of places. In Latin America, there is a type of an eBay online store called Mercado Libre. To my great surprise, most products on there, seemingly overnight, changed to “imported directly from China” with free shipping and better prices. I can pay in local currency and seamlessly the U.S. Dollar is not included in this buy or sell.
Mr. Trump can fuggetaboutit and, don’t mess with my phone!
This economic war is a story that can also be told in headlines alone:
Top U.S. economist warns against American demonization of China – Jeffrey Sachs
On Hostile Coexistence with China – Chas Freeman
If trade stops, war starts,’ Alibaba founder – Jack Ma
Chinese T.V. Station Pulls US-Made Films, Runs Classic Anti-US War Flicks Instead
I hear through the economic grapevine that there is now a popular and modern opposition song in China against the U.S. and economic war. I understand this is a war song. China and her people are ready for whatever shape or form this war will take, and Mr. Trump inadvertently unleashed the dragon, which may just spit fire and roast the U.S. first. Its time to go on record and say that my own expectation is that the Empire will fail in their objectives for this economic war, but much damage will be caused as the U.S. now is only able to cause damage. It will in fact be impossible to find ‘the winner’. How will a winner be defined and by who? The Chinese ‘understanding’ is not only absolutely correct, but is the only ‘understanding’ worth knowing. This ‘understanding’ is : There are no winners in an economic war, only horrendous costs for humanity.