As you will read in my book, Free Trade with China, started by Bill Clinton in 2000, is an error. Due to the low production costs in China, we, since 2001, buy more and more in China, and thus we made China far too rich in a very short time, in just these 24 years. Already in his first presidency, President Trump understood there was something deeply wrong there. And apart from this excellent intuition, POTUS also has this tremendous guts, his real lack of fear, that none of his predecessors had. In that, he is unique. But, with his insufficient advisers, he lacks the knowledge of how best to go about ending this erroneous free trade.
But I happen to have this knowledge, so . . . .
I wish President Trump let me advise him
With me, ending free trade with China will become a roaring success while right now it is a chaos that upsets everybody, including himself. What he does now even lowers his approval ratings.
So here let me list a few aspects of how I can help him.
- I can write the well prepared speech, by which he will explain what he doing, why and how. This will calm the stockmarkets, the press, the pundits. It will also show his superior insight in the whole affair and in what is going to happen.
- This will pave the way for him to stay the course and not seem to be hesitating as we see now.
- As China cannot retaliate in equal manner to the US, the US will inevitably win this fight and be able to continue with it. Should Beijing try to put tariffs on American products going to China, as they import far less from the US than the US imports from them, they cannot do as much harm to the US economy as we can do to theirs. So stopping free trade with China and replacing it by Equal Trade – which is what is needed – can become a major success.
- Ending the flow of goods from China to the US will inevitably hurt the export of American wheat by our farmers. It will atleast temporarily be the price there is to pay and the White House will have to find a financial compensation. Stopping FT with China will also create a short dip in GDP, both here, temporarily, and in China, much more permanently. After that dip here, which will not last longer than a year and a half, there will a huge surge in confidence in what we, in the West, can do and will be doing. Once we will have freed ourselves of the cheap Chinese products that slowly kill our industry, there will inevitably be an economic boom. A boom in our self-confidence too.
China will then have a deserved, much longer dip in its economy. Beijing has profited a lot from our error. Their coming dip is deserved. It will bring back global equilibrium.
And please note, in Brussels, at the HQ of the European Union, there is a total ignorance of what is happening economically. It is much worse there than in the US. Ursula von der Leyen speaks of ‘not decoupling but derisking’, which shows she has no idea. POTUS, once he will have the expected success, will have to convince the EU to do as he does. The EU too must end free trade with China! For Ursula to get to understand that, that will take time but should eventually happen. What POTUS is doing, as it will be understood, it cannot be ignored.