JOE TRUMPS TRADE WAR
Trump loved pleonastic expressions. He became one, “the Very Very Worst” in history. The greatest number of virus cases and most deaths. The US economy is crumbling. 34 Million unemployed. Greatest since the Great Depression. Manufacturing has been in a fantastic recession since Trump’s moronic statement, that “Trade wars are good and easy to win.” Now with Trump’s utter failure with the Hoax virus, the US has more confirmed cases and more deaths by far than any nation on earth. The deaths meant nothing to Trump.
The Economy was heading down before Trump fumbled his “Head cold” response.
Retail was crashing due to Trump damaging the supply chain with Tariffs. Endless pressure was asserted against retailers and consumers who pay the Tariffs. China doesn’t pay them. You don’t say… Trump’s endless threats of revenge against China have only harmed US manufacturing and retail as well as other small businesses.
This orchestrated stupidity only resulted in Firms leaving the USA for Asia and even Europe. The Trump xenophobia on any given day could be aimed at Chinese firms in the USA or European firms in the USA. Better to leave than continue to subject themselves to Trump’s arbitrary and capricious self-dealing.
Shortly before his demise, Trump announced a Boycott of Goodyear tires for forbidding employees from wearing Political clothing and political signs. These included MAGA hats. The stock tanked and the 60,000 employees were threatened. A day later the company CEO rolled over to Trump’s demands. Goodyear’s new Spineless Tries for Walnut brain drivers of lifted pickup trucks.
Hard to tell at that point which is more pathetic.
In the same week, Trump placed Tariffs on Canadian Aluminum again. Think about it, already a proven failure and he does it again! NAFTA 2 is in place and Trump can arbitrarily and capriciously apply Tariffs at will against NAFTA trading partners. What kind of Agreement is that? Victim to executioner? Trump did this in the midst of a recession in both the US and Canada. The price of aluminium in the US has risen and businesses that use it have to raise their prices or eat the tariff loss. Tariffs are not paid by Canada. You don’t say…
Foreign Firms are leaving the US Stock Exchanges:
Over a year ago with Trump’s rising xenophobia against China, Alibaba, one of the largest and most profitable companies in the world, filed a second IPO with Hong Kong. Trump had threatened to delist Chinese firms. Trump has no Constitutional power to do this of course, but that has never stopped Trump.
Republicans and Democrats were silent. They live in fear of Trump. This threatening talk had the effect of undermining US financial exchanges and harming US investors with Asian stocks and other foreign companies traded on the exchanges.
If you are a Trump redneck and unschooled in economics Trump’s threats were met with walnut brained approval. In Trump’s world, bullying is a mainstay. But if one has a mind and is schooled in economics, it was suicidal. It destroyed hundreds of years of Market Trust earned by the US Exchanges by turning US exchange into a political weapon system. It shouted to the world that a stupid man had just destroyed hundreds of years of American full faith and credit with reckless abandon. And the exchanges didn’t make a peep.
Since then, many Chinese firms have listed on other foreign exchanges as have European firms. Even Saudi Aramco listed its IPO on the Saudi Exchange and to date has refused to list on the New York Stock Exchange. Their chief concern was US Governmental intervention from Trump against Muslims.
BIDU followed Alibaba and in March of this year filed their own Hong Kong IPO. I expect most Chinese firms to do the same. The USA appears to have gone insane. 65% of the US population opposes the US involvement in Afghanistan and that rolls on in its 22nd year.
The net result of Trump is that foreign investment in the US went nil under the Great and Magnificant Trump. US Debt has skyrocketed as foreign nations have paired back their investments in US Treasuries forcing the Fed to pick up the tab. Foreign nations dislike Trump trying to intervene with their private trade. The linchpin of these threats is centred on the US Dollar Reserve Currency.
Before Trump and Obama, the US Dollar Reserve Currency was viewed as non-political. The US Dollar Reserve is now fully weaponized.
Before Obama and Trump came along with the weaponized Dollar, any nation could buy and sell commodities in dollars without concern of some kind of crazy government meddling. This all ended with Obama sanctions on Russia. Astonishing this is the single most dollar destructive event in history and Trump loved it so much he took it to an all-new level. Trump put dollar sanctions against 40% of the world’s population. His rednecks think this is great. It won’t be so great when the US Dollar Reserve is toppled. Goldman Sachs estimates a 30% crash of the US GDP if the Dollar Reserve Currency is toppled.
But the virus has created the perfect storm:
In the mix of uncontrolled circumstances, the US economy has plunged into recession. 35 Million Unemployed. The economy is beyond weak, it is on life support with Trillions being pumped into the crashing liquidity. Yet here is Trump and BIDEN continuing to hold pat to the self-destructive Tariffs. Americans have paid for tariffs on medical supplies and equipment and many industrial chemicals used in sanitation. It’s a bust!
With auto and truck markets crashing, the manufacturers reliant on the supply chain are now thinking about moving manufacturing from the United States of Trump and Joe Trump. Ford’s new truck factory in Mexico.
In 1930 the Great Depression was made worse by Smoot Hawley Tariffs. In the election of 1932, Franklin Roosevelt and Democrats destroyed Hoover and the Republican party of Tariffs with a clean sweep of all houses. Roosevelt finally obtained the political power to destroy the Tariffs in 1934 when the midterm elections destroyed the Republican Tariff holdouts.
Imagine, Unemployment reached 24% and Republicans were still holding on to the Smoot Hawley Tariffs!
FDR destroying the Tariffs was the first improvement in Unemployment in a Depression that lasted 15 years. FDR had no choice since he could not initially overturn Smoot-Hawley.
1023 economist had warned Hoover, just as over 2000 economists warned Trump, that Tariffs would destroy the US economy.
But Hoover bent to the wishes of the Republican congress. In Trump’s case, the Republican congress bent to the wishes of Trump. Trump sold his Tariffs as a tool of negotiation. Republicans foolishly bought into Smoot Hawley II and Ultimately were blown out of power in 2020.
As an aside, when Joe Biden explained he would end Tariffs, his campaign walked back the statement within hours.
Trump bragged he delivered the Greatest Economy in the history of mankind. But the Truth is the GDP average under Trump before the virus was an anaemic 2%. Compared to Obama who had a 1.9% and the Great Recession. Thus Trump was a huge disappointment. The economy under the big businessman sputtered and went flat.
Trump’s GDP then sailed to a minus 33% so his overall performance is far below Obama. As Janet Yellen is fond of saying, “Trump is an economic illiterate.” Trump didn’t have a single economist on his economic team. This appeals to the Trump base who believe education is unnecessary. 80% of the Trump GOP now have no college degrees. That’s is akin to a third world country.
Trump killed the golden goose of US High Technology and Biden has gone along with it.
Put yourself in the position of a global smartphone maker. The phone maker buys chips and components and software and makes phones. Suddenly Qualcomm, one of your chip suppliers that has ties to the USA, is forbidden from selling their chips to your company by TRUMP. What are you going to do? Fold and go out of business? No, you are going to find another chip supplier not controlled by Trump.
Trump thinks he is just hurting one phone maker and that’s you, but All phone makers in the world look at this conduct by Trump and say… “UH OH, this could happen to us too if Trump gets mad at us.” So all global smartphone makers including Apple start removing US components and replacing them to avoid any and all dependence on US products in order to avoid Trump’s meddling and damage to their supply chain.
So what happens to the US companies who’s sales are blocked by Trump. They lose their global markets and they have no US markets. There are no smartphone makers left in the USA. Biden will now have to bail out the US Chipmakers with taxpayer money, just as Trump has done with the US Farmer after Trump destroyed their global markets. They will call it something other than welfare or subsidies. They will of course blame China.
US chip companies have to come to Trump to beg for a trade exemption. Trump loved that. Trump loved people to beg him.
It doesn’t end here. Foreign firms are leaving the US in droves. IKEA moved all its manufacturing out in Dec. Intel and Qualcomm may have to move offshore or sell divisions to various intermediaries offshore.
Understand that if these US chipmakers can’t sell their chips into Asia, then revenues collapse, R&D collapses and the US products are removed from Asian boards, which is 98% of the world’s consumer electronics, computers, and servers. All of Asia from Korea to Japan etc are removing US components to comply with Trump tech sanctions. And to avoid Trump boycotts. However, the double-edged sword is this: If US Chips are not used in products, then they are not part of the future supply chain. That idea seems to evade the Trump Base as well as JOE TRUMP the UNION MAN.
Meanwhile, Chinese firms push for core competency and then start selling their products on the global market as competitors to the US chipmakers.
Trump Tried to destroy Huawei. Huawei is now the largest smartphone maker in the world surpassing Samsung in 2020. They are the largest telco switch maker in the world and largest 5G maker. To “harm” Huawei, Trump cut them off from Qualcomm chips and Intel chips and proprietary Android. In doing so Xiaomi has now taken over the smartphone global lead, with a slower chip than the Huawei Kirin.
Trump and Joe Trump naively think they have killed Huawei and they are celebrating. But this will be temporary.
Huawei has a 3nm Kirin chip design which they expect to have into mass production by 2022. With Trump and Joe Trump sanctions, Taiwan Semiconductor can’t do business with Huawei. A mere bump in the road as SMIC and other Chines foundries move to smaller scale. China achieved a 7nm chip scale in October of 2020.
Thanks to Obama, Trump and Joe Trump, Intel has now lost virtually all its orders to China and Asia. Earnings slashed. Even Apple has dumped Intel and is making its own chips in China. Alibaba, now a large chipmaker is making and selling i9 chips in Asia. Meanwhile, Qualcomm has lost half its revenues, slashed R&D, and Huawei is building their own chips and project they will be 100% free of western chips in less than 12 to 18 months.
Then we have Android: Low tech Trump hits the wall.
Another Brilliant move by Low Tech Trump to destroy US tech: Open Source Android is now running on all Chinese Phones and Samsung has the option available. The proprietary Android services are Google sync and Google Store. No sooner than Trump threatened to remove Android… under his pretend umbrella of National Security, thousands of mirror sites were launched globally with APK files for free. Trump had to immediately reverse that imperial decree.
One could conclude that it has been a total bust for Mr low tech Trump and US and British high tech firms. Trump is still trying to block an ASML scanner which the Dutch are trying to deliver to China. In the meantime, Chinese semiconductor firm SMIC’s N+2 is underway as SMIC develops its own core scanning competency. In simple terms, SMIC N+1 can build RISC chips now and SMIC N+2 uses EUV technology. Though it is reported that SMIC has the Dutch scanner, it is advancing the EUV N+2 platform and will become a global competitor.
The TRUMP METHOD kills Western Markets and creates a Chinese Competitor again and again.
As US components disappear in the global technology world, US firms will not participate in designing the future. They will have no markets for their products. Asian products will have replaced them at a fraction of the cost.
When China shut down Wuhan, they used their 5G network to take driverless trucks full of supplies into Wuhan during the lockdown. When roads were blocked Alibaba and JD used drone deliveries. Both Trucks and drones were controlled from Beijing 780 miles from Wuhan. As a reference, Harvard Business Journal did a story on this supply effort. The Chinese are already designing the 5G network drones and driverless vehicles. The US has no 5G.
To have 5G the US would need 40 times the antenna density it has presently, at a cost of over $400 billion dollars according to Deloitte and Touche. With Trump’s endless false claims that Huawei is spying on Americans, without a scrap of data to support that claim, Trump has effectively destroyed US big data. And China roars ahead.
At present Alibaba uses AI for chip analysis and chip masking. They produce open-source chips and can run small quantities of custom proprietary chips on demand. In spite of the US bragging rights, China is a mere 12 to 18 months away from 7nm and possibly 5nm. SMIC, China’s largest foundry is buying engineers from Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest foundry. It is only a matter of time before China catches up.
Meanwhile, where is Joe Biden on this subject? He’s Joe Trump. Some people don’t learn without excessive economic pain. Lose the golden goose of high technology and the US is nothing but a third world country of manual labourers.
The economic crash is coming: The perfect Storm: Protectionism, Tariffs, US Dollar Reserve being replaced.
This Trump Depression: The Greatest in History is going to take the United States down a path from which it will never return as preeminent. Thousands of companies have already gone bankrupt. Individuals will follow.
Food prices are up a whopping 46%.
A good job these days will be working for Walmart. I don’t mean that facetiously. I say that because it’s true. A Walmart employee gets food discounts. When people spend on food alone, that is a Depression.
Biden is offering nothing different but the same losing war of Donald Trump with a slight personality difference. China gains scale with every US recession. They are presently only 4 Trillion from eclipsing the USA as the world’s largest economy.
The Chinese consumer blew past the US Consumer in Dec of 2018 and has never looked back. By PPP China is already the world’s largest economy. The irony is that China’s greatest gains have occurred with Trump doing the most China bashing. Xi is playing rope-a-dope with the Trump Brothers, Don and Joe Trump.