China Hits Back

Even though the trade war is not the war that China can win right now.

China will soon impose an additional 34 per cent tariffs on all American imports in retaliation for Donald Trump’s 34 per cent levy. Beijing announced the measure today, the most serious escalation in a trade war with Trump that has fed fears of a recession and triggered a global stock market rout.

The new tariff, which comes into effect on April 10, matches the rate of the ‘reciprocal’ tariff imposed by Trump this week. The levies are in addition to the existing tariffs already imposed on US goods.

US exports to China totalled $143.5 billion last year, according to Office of the US Trade Representative data. Oilseeds and grains, including soybeans, machinery and aerospace products were America’s top exports to the country. The US imported $438.9 billion worth of goods from China last year, with top imports including electrical and electronic equipment, machinery, toys, and plastics.

I don’t know why China is doing this, since the balance of trade surplus means that the more US-China trade declines, the more it will hurt China rather than the USA. All I can think is that China isn’t actually concerned about the inevitable trade war, but is more interested in gradually turning up the heat in a conflict that it knows to be unavoidable.

Time would appear to be on China’s side in this regard. It has been 25 years since Bill Clinton announced the United States-China Relation Act of 2000 that opened the floodgates of US-China trade.

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It’s Just the Opening Bid

The “tariff rates” to which the God-Emperor 2.0 utilized to generate his newly-announced tariffs aren’t actually anything of the sort.

Flexport’s team was able to reverse engineer the formula the Administration used to generate the “reciprocal tariffs.” It’s quite simple, they took the trade deficit the US has with each country and divided it by our imports from that country.

This makes a lot more sense, because Switzerland doesn’t have a 61 percent tariff on anything. Which means that we’re in the realm of rhetoric here, not dialectic, and I suspect what the God-Emperor intends is for everyone to simply accept a 10-12 percent tariff rate without any reciprocating tariffs on their own imports.

I’ll admit, I’ve seldom been more wrong than seeing the initial tariffs being graduated UK-EU-CH instead of the other way around, as I was expecting. But Trump’s usual tactic is to slap his interlocutor into accepting his framework, then offering a much more palatable deal that would have looked unattainable before the metaphorical slap in the face.

Regardless, he’s doing the right thing if he wants to rebuild America’s industrial capabilities again.

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EU Hit From Both Sides

The EU’s reaction to getting a taste of its own medicine is downright humorous:

EU Commission President Ursula von der Leyden has three big concerns with the new trade/tariff reset. I strongly suggest everyone to read the EU concerns slowly to fully absorb decades of hypocrisy now surfacing:

  • The EU will not be able to compete for U.S. market share with 20% general tariffs and 25% auto tariffs.
  • The EU must deploy countermeasures against the risk of losing industrial capacity and manufacturing to the United States.
  • The EU must defend itself against China dumping cheap products into the EU now rejected by the USA.

Von der Leyen is concerned mostly about the extremely valuable U.S. consumer being leveraged by President Trump, essentially blocking exploitation from EU and Asia. The EU will not tolerate losing access to the most valuable customers in the world, Americans.

So, just to be clear, the EU is now going to a) fight a shooting war with Russia, b) fight an economic war with the USA, and c) fight an economic war with China.

I strongly recommend exiting the so-called Union at the earliest opportunity to every leader of an EU member state. The EU is the last surviving vestige of the neo-liberal world order and it’s going to collapse soon.

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The Trump Tariffs

They’re hitting Switzerland harder than we expected, and the UK considerably less than we expected, but this will not interrupt our plans nor is it likely to change our book prices. If we have to, we can obviously increase our manufacturing in the USA, but some of the improvements in the coming payment systems should cover most of the increased costs for us. And, as with all things Trump, wait two weeks before attempting to analyze anything.

Regardless, we’re on top of it, we’re prepared for it, and we’ll deal with it in whatever way least disrupts our subscribers.

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Europe Gambled and Lost

It turns out that betting on satanic globalism that seeks to eradicate your own nations is not the smart way to bet:

The Ukraine war is going to be concluded soon. Attempts to prevent the outbreak of peace are being bypassed by direct negotiations between the US and Russia.

Aside from the obvious desire to stop the killing, arguments about cost are being made. The broader strategy of the Trump administration is to present its foreign and domestic policy as an efficiency drive to cut waste. There is no difference between foreign and domestic policy of course. This means regime change abroad means regime change at home.

Under the former grand strategy of liberal globalism, it made “sense” to sponsor social revolution, coups and military regime change abroad. If your strategy changes, as it has, then all this becomes “waste” overnight. It also quickly becomes “corruption”.

The main reason for all this is that the United States was going to go bankrupt if it did not abandon the global empire model of the liberal consensus.

Globalised economics, social policies and grand strategy have produced a record debt and have met with hard limits in a changed world. This model is no longer practical, realistic or affordable and so it has been replaced.

Governments such as in Britain and France and Germany were formerly partners in this consensus. Their political and financial fortunes were invested in a project to overextend and destabilise Russia. This has failed.

The reward would have been immense. A Balkanised Russia would have been absorbed into the liberal-global system, giving the backers of the war which broke it immense strategic and political power in the resulting geopolitical arrangement.

In short, Western Europe gambled everything on the collapse and domination of Russia and lost.

Now all of the European regimes are going to fail. What the EU calls “democracy”, which of course is closer to anti-democratic rule by a corrupt retarderati that has sold their souls and sold out their nations, is going to come to an end within the next ten years and probably sooner.

Once Germany goes bankrupt, the other European Clown World states will rapidly follow suit. And all the post-WWII Enlightenment appeals to fake virtues that are only honored in their absence will lose the final remnants of their rhetorical power.

The nations will rise again and Clown World, or as Susan Cooper called it, The Dark, will once more be driven back into the shadows on the periphery. Because one can only war successfully against Nature and Nature’s God for so long before reality exerts itself on one’s delusions.

And in a reflection of the global return to Great Power Balance, the EU finds itself the enemy of both Russia and the USA due to Denmark’s claim to Greenland. Which is going to be claimed by the USA, especially in light of Zelensky announcing that he’s going to default on Ukraine’s war debt by redefining US loans as grants. Which is an object lesson in why one should never loan money to anyone known to be prone to redefining words.

Like in the 1860s, when Russia wanted the United States to take control of Alaska to curb the power of the British Empire, and the Americans also used it to smash the Japanese Empire during World War II, both of whom were major threats to Russia, the United States takeover of Greenland would eliminate the socialist European powers military threat to Russia in the Arctic, while also curbing socialist European Union economic threats to America—and in viewing the current dynamic, it caused world-renowned Norwegian international relations expert Florian Vidol to most factually observe: “In the power game that is developing over Greenland, there is one big potential loser, and it’s the European Union…It needs the resourse for its energy transition…It’s heavily reliant on Greenland…And it faces the potential danger of being squeezed out”.

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Protecting the Automotive Industry

The God-Emperor 2.0 is slapping 25 percent tariffs on all foreign cars. It’s about two decades too late for this, as GM already went bankrupt back in 2009, but it might start turning things around for the USA’s beleaguered industrial capabilities. Regardless, it’s time to buy domestic if you need a car; hopefully they’ll start making real cars that run on gas and don’t have all that worse-than-useless computer gadgetry in them.

Donald Trump has warned the European Union and Canada they can expect to contend with ‘large scale tariffs’ if they seek to do ‘economic harm to the USA’ in an unsettling post early this morning. The US President plans to impose a 25% tariff on imported cars and light trucks starting on April 3, and earlier this month rolled out an increase in tariffs on all steel and aluminium imports from the European bloc.

This prompted the EU to retaliate with a series of duties on US industrial and agricultural products from April 1, setting the foundation of what could prove to be a damaging trade war.

Posting on his Truth Social platform this morning, Trump declared: ‘If the European Union works with Canada in order to do economic harm to the USA, large scale Tariffs, far larger than currently planned, will be placed on them both in order to protect the best friend that each of those two countries has ever had!’

The EU retarderati clearly has absolutely no understanding of its lack of power and influence. The EU can no more win a trade war with the USA than it can win a shooting war with Russia, and here its leadership is blithely proceeding to enter into both. This is, of course, because the EU “leadership” is nothing more than Clown World puppets who know nothing about either military history or economics and will simply repeat whatever rhetoric they are instructed to repeat, as many times as they are told to repeat it, no matter how obviously nonsensical it is.

Kaja Kallas, the Vice-President of the European Commission, is exemplary of the absolute ineptitude of the current EU puppet-leaders. She combines ignorance with vacuity, a complete lack of experience with accountability, and a pretty woman’s unfamiliarity with being told no. She’s the High Representative of the European Union for Foreign Affairs and Security Policy, which is supposed to be the highest diplomatic position, but she’s been acting as if she’s the prime minister of a belligerent party, which isn’t at all the same thing.

At this point, I won’t even be surprised if both the USA and Russia break ties with Europe in the coming years, just to give the poor European nations a chance to break free of their satanic would-be masters and their fake, unelected “democracy” and their self-destructive economic and immigration policies.

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Fake Prizes for Propaganda

In case you weren’t convinced that Nobel Prizes are just another fake Clown World propaganda prize, consider who was awarded the most recent not-Nobel for Economics:

Why Nations Fail was shortlisted for the Financial Times and Goldman Sachs business book of the year award 2012.

I read the book shortly after the publication since the authors spent quite some time analyzing China and contrasting with the US. I found they had very little original insights and merely recycled western stereotype caricature of China while their praise for the US somewhat unwarranted. I soon forgot the book.

If this is just another book that doesn’t age well, no one would have noticed, and I won’t be writing about it. After all, it’s par for the course for “social science” books to echo the ethos of the time when they were published. They are often dead wrong and people move on to the next shiny object.

However, 12 years after the publication of the book, the esteemed Nobel economics committee decided to award the authors the Nobel prize for this work.

So I re-read the book and did some research on what others thought about it when it first came out. I found my original impression of the book was validated and there were serious critiques, most presciently from Ron Unz of Unz Review. Let me dwell into this.

Robinson and Acemoglu analyzed the economic institutions and performance of numerous countries in the book. As the major economies of the world, China and the US were given special attention.

The authors used China and the US as the examples of what they characterized as “extractive” vs. “inclusive” systems.

They argued that China was destined to fail as it had an extractive economic system run by a venal, self serving elite. On the other hand, the US would win with its inclusive, democratic system run by rule of law, democratic check and balances, and broad citizen participation in decision making.

The Chinese system was described as closed from competition, incapable of innovation, and run by corrupt authoritarian leaders. Robinson and Acemoglu contended China’s economic performance to date (at the 2012 publication date), while impressive, was unsustainable and would falter.

They stated the US economic system thrived on creative destruction as the inclusive institutions encourage competition, reward innovation, and provide opportunities for new entrants into the market. The authors argued that the U.S.’s success was not due to geography, culture, or natural resources, but rather its inclusive institutions and an elite that work to advance the interests of the population.

13 years after the publication of the book, you have to wonder what planet Robinson and Acemoglu lived on when they wrote the book and what kind of ideological blindness has led the Nobel economics committee to award the prestigious prize to them.

Ironically, the only reason nations fail that is actually related to economics is if they are dumb enough to buy into free trade, and worse, open immigration. Women’s right and educating women are much more serious problems, as the collapsing birth rates everywhere from Japan and South Korea to Germany and Italy suffice to demonstrate.

But the thesis presented by Messrs. Daron Acemoglu, James Robinson, and Simon Johnson is so obviously irrelevant, especially in light of the fact that they couldn’t even correctly identify which nations are presently crippled by an “extractive system, run by a self-serving ruling elite”.

Then again, the fact that Paul Krugman, of all people, was awarded one of these prizes is sufficient to prove its worthlessness. That’s just embarrassing. If these awards were legitimate, Ian Fletcher, Steve Keen, and your favorite dark lord would have all won at least one.

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Europe is the Enemy

The God-Emperor 2.0 is threatening 200 percent tariffs on alchohol imports from Europe:

President Donald Trump is threatening a massive 200 percent tariff on champagne and wine from Europe in the latest escalation of a bitter trade war.

The president lashed out at the ‘nasty’ European Union after it announced tariff hikes on American imports in retaliation for Trump’s increases on steel and aluminum.

The tit-for-tat measures have raised the stakes in Trump’s ongoing trade war, sparking fears of a recession in the United States and a shock to the global economy.

In his latest salvo Trump threatened ‘a 200% Tariff on all wines, champagnes, & alcoholic products’ after the EU raised tariffs on American goods including whiskey. Many Republican states in the U.S. produce whiskey.

Writing on Truth Social, Trump said: ‘The European Union, one of the most hostile and abusive taxing and tariffing authorities in the World, which was formed for the sole purpose of taking advantage of the United States, has just put a nasty 50% Tariff on Whisky.

‘If this Tariff is not removed immediately, the U.S. will shortly place a 200% Tariff on all wines, champagnes, & alcoholic products coming out of France and other E.U. represented countries. This will be great for the Wine and Champagne businesses in the U.S.’

Trump’s move would drastically raise the prices of European wine for Americans.

The president himself does not drink alcohol.

He’s not wrong about the EU’s protectionism, and this tariff would have a tremendous impact on European wine production, which is already suffering from a trade war between French and Spanish winemakers. I don’t see how the EU can even attempt to fight this, they’re just going to have to choose if they are content with domestic production or not.

I, for one, pledge to do my part to support Spanish and Italian winemakers. If I have to increase my wine consumption to make up for the loss of the US export market, so be it.

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Free Trade and Strategic Crisis

Big Serge has an excellent post on the history of naval warfare that happens to touch lightly on the strategic crisis facing the USA today with regards to the production of steel and the post-WWII lack of industrial capacity that has weakened the US military.

At the core of the great naval developments occurring around the turn of the 20th Century was a systematic erosion of Great Britain’s strategic position. This strategic decay was of course a multivariate process which included the emergence of new great powers like Germany, Japan, and the United States, and the evolving industrial dynamics of the world. At its heart, however, the problem was very simple: in the latter half of the 19th Century, industrial technologies began to diffuse from Great Britain to the rest of the great powers, to the effect that British supremacy in industry and critical military technologies became an open question.

A brief perusal of the relevant economic statistics betrays a clear and sustained erosion of British supremacy. In 1880, Britain still accounted for nearly a quarter of global manufacturing output and was by far the leading industrial nation of the world. By 1913, it had fallen in absolute terms well behind Germany and especially the United States, which now boasted nearly 2.5 times Britain’s output. Already by 1910, Britain (formerly the world’s premiere steelmaking nation) produced only half as much steel as Germany and barely a quarter of American steel output.

The immense economic advantages enjoyed by the United States need little enumeration. America occupies a uniquely providential economic geography, being blessed with a pair of accommodating seaboards saturated with natural harbors, an internal Mississippi waterway that is both dense and far reaching to accommodate internal trade, superb growing regions, peaceful borders, and ample deposits of virtually every mineral resource thinkable. In short, it is a country with bountiful mineral and agricultural resources, internal waterways for moving them about, harbors for exporting them abroad, and no meaningful security threats.

The German case, however, bears closer scrutiny. Whereas the United States was characterized by boundless space, free of meaningful external security threats, Germany was intensely bounded in the middle of Europe, birthed into a firestorm of potential enemies all around it. German economic might was little like the American story, characterized by the uninterrupted exploitation of a vast geographic bounty, and more the product of powerful and aggressive German institutions – both of corporations and the state.

The German population grew rapidly into the 20th Century (German birthrates were forever a point of hand wringing for the French). The German population grew from some 49 million in 1890 to 65 million by 1910 – an increase of 32%, compared to an increase of just 3% in France (from 38.3 to 39.5 million) and 20% in Britain (37.3 to 44.9 million). Simultaneously, the consolidation of an impressive educational apparatus ensured that this growing population was highly literate and productive. Around the turn of the century, many European armies still reported high levels of illiteracy among recruits. In Italy, some 33% of recruits were deemed illiterate: the corresponding figure was 22% in Austria-Hungary and 6.8% in France, but a mere 0.1% in Germany. The rapid growth of such a young and educated population benefited not just the German army, but also the burgeoning roster of German industrial enterprises like Krupp, Siemens, AEG, Bayer, and Hoechst. Such firms dominated the emerging 20th Century industries like chemicals, optics, and electrics, and the intensive adoption of agricultural modernization and chemical fertilizers made German agriculture the most productive in Europe on a per-hectare basis.

The explosion of two industrial powers who could not only compete but even outstrip Britain (and one of them right in the heart of Europe) could have no effect other than directly undermining Britain’s strategic position. Matters were made worse, however, but the proliferation of advanced naval technology around the world – in many cases directly abetted by British firms.

In 1864, British military leadership had made the fateful decision to keep artillery production in the hands of the state-owned Woolwich arsenal, despite the emergence of private industrial firms, like the Armstrong company, who were capable of making state of the art naval artillery. Cut out of British government contracts, this let manufacturers like Armstrong with no choice but to seek foreign buyers. When Armstrong built an armored cruiser – the O’Higgins – for the Chilean government, it set off serious alarm bells about the basis of British naval supremacy. The O’Higgins was fast enough to easily outrun any capital ship of the day, but her powerful 8 inch guns made her more than capable of sinking targets in the lower weight class. This suggested a distinctive use case as a commercial raider, able to evade enemy battleships while preying on merchants. Chile, of course, was hardly a rival to Great Britain, but Armstrong’s exploits did not end there. All told, Armstrong would build 84 warships for twelve different foreign governments between 1884 and 1914, and frequently supplied technical systems more advanced than those in use by the Royal Navy at the time – for example, the powerful main battery of the Russian cruiser Rurik, launched in 1890.

The prospect of fast cruisers – optimized for speed and striking power at the expense of armor – was particularly alarming to Britain owing to emerging patterns of agricultural production. The advent of efficient steamships had drastically lowered seaborne transportation costs – a fact that was of the first importance for Britain, as it allowed for the mass import of cheap grain from places like North America, Australia, and Argentina, at costs far below the levels at which British farms could compete. As a result, between 1872 and the end of the century wheat acreage in Great Britain dropped by about 50 percent, and already by the 1880’s some 65 percent of Britain’s grain was imported from overseas. The prospect of swift enemy cruisers capable of intercepting grain shipments while evading the British battle fleets now assumed a potentially existential importance, as for the first time in history London contemplated the possibility that the interdiction of its trade could bring the island to the brink of starvation.

This raised the possibility of a dangerous asymmetry: might it be possible to nullify Britain’s centuries-old naval supremacy without building competing battleships at all? French naval theorists certainly thought so, and it was proposed that France could out-lever Britain on the seas with a fleet comprised entirely of fast cruisers and torpedo boats. Such a program had the additional advantage of being very cheap, with dozens of torpedo boats available at the cost of a single armored battleship. This financial calculus was particularly important to France: after the disastrous defeat at the hands of the Prusso-Germans in 1870-71, it was natural that building out the army should be Paris’s primary concern. Therefore, a naval program that promised to outmaneuver the British without eating into funds for the army had irresistible allure. In 1881, the French allocated funds for 70 torpedo boats (halting the construction of armored battleships), and in 1886 the new Minister of Marine, Admiral Aube, launched a new building program for 100 additional torpedo boats and 14 swift cruisers designed to raid enemy shipping.

Taken together, the decay of Britain’s naval supremacy is easy to sketch out. Great Britain had become uniquely vulnerable to asymmetrical warfare at sea, owing to its growing dependence on imported grain, at the same time that technical changes in the form of the torpedo and the fast cruiser gave her enemies the potential to exploit this vulnerability. To make matters worse, the diffusion of the industrial revolution to continental Europe and the United States raised the prospect that Great Britain might no longer be able to simply out-build her enemies. In a sense, the comforting and familiar dynamic of the blockade was now reversed: instead of a powerful British battlefleet insulating the home islands from invasion and blockading enemy ports, the home islands now faced starvation at the hands of fast and cheap enemy raiding vessels armed with torpedoes and modern naval artillery.

The parallels of British decline and the subsequent US decline should be fairly obvious. As Admiral Mahan wrote in The Influence of Sea Power Upon the French Revolution, “we may profitably note that like conditions lead to like results.”

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Canada Folds

Sanity prevailed, as someone appears to have explained the tariff math to the Premier of Ontario:

Canada folded to President Donald Trump after he vowed the nation would pay a historically big ‘financial price’ for the electricity tariff it imposed on the United States. Hours later, Ontario Premier Doug Ford said he would cancel the 25% tariff on Canadian electricity to Michigan, New York and Minnesota that he put in place on Monday.

That move was an escalation in response to earlier tariffs from Trump as the trade war between the two countries has intensified.

The Premier said he spoke with Commerce Secretary Howard Lutnick about the situation and they agreed to meet on Thursday to discuss reciprocal tariffs that Trump wants to put in place on April 2. ‘In response, Ontario agreed to suspend its 25 per cent surcharge on exports of electricity to Michigan, New York and Minnesota,’ Ford said. Trump, in response, agreed not to double tariffs on Canadian steel and aluminium to 50%. They will stay at 25%.

In the meantime, the God-Emperor 2.0 has moved on to the EU and the UK. The UK is being smart about it.

Keir Starmer is resisting pressure to retaliate today after failing in his bid to persuade Donald Trump to spare Britain from brutal tariffs on steel. The US president has pushed ahead with the 25 per cent levy on steel and aluminium imports despite desperate pleas for an exemption. Britain exported 166,433 tonnes of steel to the US in 2023, the last full year for which figures are available.

The EU, not so much:

Brussels said counter-measures to the tariffs, which would affect around 26 billion euros (around £22 billion) of EU exports, will be introduced in April ‘to defend European interests’.

I am beginning to conclude that these particular tariffs aren’t about economics at all. This is about the US President attempting to rebuild the US industrial capacity that presently renders the USA unable to fight a war with either China or Russia. Which the USA simply cannot do when its steel industry is so susceptible to foreign competition and steel suppliers that will be inaccessible and useless in times of war.

The various foreign countries should accept these tariffs on industrial materials without demur, because the USA really doesn’t have any choice in the matter if it is going to remain one of the top three global military powers.

CORRECTION: Canada has not learned.

Canada announced $21 billion in new tariffs on Wednesday targeting imports of U.S. computers and sports gear. It is the latest escalation of the increasingly bitter and costly trade war engulfing Washington and Ottawa. The latest move comes hours after President Donald Trump’s 25 percent tariffs on Canadian steel and aluminum went into effect.

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