America’s Cold War with China: Part 1

You see China’s strategy every time you go to Wal-Mart:

Swamp the U.S. with cheap goods to strip our manufacturing base so they can line their pockets with trillions of our dollars.

And cause 5.6 million U.S. jobs to be lost since 2001 … equal to the populations of Los Angeles and Phoenix combined.

In spite of Donald Trump’s policies and due to China’s one-sided trade practices, only a small number of these jobs will come back.

UC-Irvine Professor Peter Navarro explained it this way:

“In 2001 we let China into our markets here in the United States and, since that time, we’ve shut down over 50,000 factories, lost 6 million manufacturing jobs … and got 25 million people in this country that can’t find a decent job, and we now owe $4 trillion to the world’s largest totalitarian nation.”

After imposing tariffs, Trump denied he was entering into a new trade war, claiming the “trade war was lost many years ago by the foolish, or incompetent, people who represented the U.S.”

Last week I showed you how China has been following “secret codes” from their Warring States period as part of a “100-Year Marathon” to replace America as the world’s superpower …

… and how American politicians fell for each and every one of them.

This is a new cold war. And it’s being fought on FOUR FRONTS:

1) A Trade War …

2) A Tech War …

3) A Geopolitical War, and …

4) A Capital War.

Today, I want to focus on the Trade War between the U.S. and China … and between Donald Trump and Xi Jinping.

The next phase of Chinese trade strategy goes far beyond consumer goods. The 12th Five-Year Plan calls for a controlling interest in strategic industries. I’m talking about extremely high-profit sectors worth nearly $4 trillion that we’re counting on to grow our own economy …

To do this, China undercuts U.S. companies by giving Chinese enterprises an array of unfair — and sometimes illegal — subsidies, grants and loans while sticking it to us with mafia-sized tariffs.

When you add everything up, what China has done to gain control over our economy — and your wealth — is truly frightening.

To debtors, creditors are dictators.

And China is the world’s biggest financial creditor-dictator of them all.

Without the trillions we’ve “borrowed” from them — in the form of our gargantuan trade deficit — America wouldn’t have enough money to pay its bills. Remember: The U.S. spends over $1 trillion annually — nearly 25% more than it takes in in revenue.

Our economic prison was constructed almost 20 years ago, when President Clinton pushed Congress to approve the “United States–China Relations Act of 2000.” He said more trade with China would advance America’s economic interests.

So, China was allowed to join World Trade Organization and was even given most-favored nation (MFN) status.

Former White House Counsel Jim Schultz said this:

“Through multiple presidential administrations — Clinton, Bush and Obama — the United States has naively looked the other way while China cheated its way to an unfair advantage in the international trade market.”

Donald Trump aims to finally put things right.

Since the 1980s, Trump has been advocating tariffs to reduce the trade deficit and promote domestic manufacturing, saying the country was being “ripped off” by its trading partners. And China is the greatest rip-off artist of them all.

Imposing tariffs became a major plank of his presidential campaign, and in 2018 he began setting levies on China with the goal of forcing it to make radical changes.

The result: Stress for U.S. manufacturers and farmers. (Although most farmers continue to support the president.)

It’s also caused higher prices for consumers and led to the stock market volatility we’ve seen over the last several months.

It’s no surprise the Donald has been criticized internationally over all this.

But that doesn’t mean inaction would have been better. Among U.S. politicians, most agree some pressure needs to be placed on China. Heck, even leading Democratic presidential candidates like Joe Biden and Elizabeth Warren say they support the tariffs.

So, where to turn in this time of uncertainty? Well, for investments that are already producing hefty gains — even in the middle of these ongoing trade wars — why not take a test drive of my monthly dispatch Wealth Megatrends?

Just go here to get your $9 trial membership.

The trade war is just one part of China’s economic marathon against America.

Watch your inbox this coming Tuesday. We’ll take a look at the second front: The Tech War!

All the best,

Sean

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