The Art of Trade Wars

It's not easy being patient and focusing on the long-term --  I mean LONG-term, as in decades or centuries. But that's what China has been doing for centuries, and what it keeps doing despite our current era of 24/7 news updates, social media hyperactivity and viral videos making the rounds. There seems to be an insatiable "I WANT IT NOW" mentality among millions of people in America and across the globe.

President Trump has been using tariffs as a blunt cudgel to crack down on China for its long-time trade abuses, including currency manipulation, heavy-handed tariffs against our products, and intellectual property theft. But in the United States, short-term pain inflicted for uncertain long-term results causes the media and the president's critics to go ballistic with angst, panic and harsh criticism.

The nonstop opinion polls, and the media's tendency to blow them out of proportion, have painted the president's re-election prospects as growing worse by the day. We know the Trumpster himself is famously impatient, so let's hope he sticks to his guns with China.

The Chinese economy is hurting, as many companies have been fleeing for Vietnam and other countries to escape U.S. tariffs. The country's Producer Price Index turned negative for the first time in three years, and its rate of economic growth is the slowest since the early 1990s. At the same time, dozens of American companies are pulling their production out of China.

Make no mistake, China is hurting, and its people are growing restive. While President Xi Jinping may wish to play the long game as his nation has traditionally done, he also recognizes his future may be in doubt. Think about this: Trump could lose the 2020 election if Americans get fed up with the higher prices and pain inflicted on farmers (among other producers) and vote to oust him. But Xi could literally lose his life.

Xi may be calculating that the tariffs will so harm Trump's prospects, a Democrat will be elected in November 2020, and once that person is in power, all of the tariffs against China will be undone (soon enough for Xi to be taken off the hot-seat). But again, Xi and his family could face personal catastrophe if conditions continue to deteriorate and Trump ends up being re-elected.

At this point, it's way too late for Trump to back out. To do so would shatter his credibility, and erase any prospects for achieving a fair and productive trade agreement with China. I believe Orange Julius WILL stick to his guns, and some kind of win-win trade agreement will be signed in the next few months. This will cause the stock market to roar, and vastly improve Trump's re-election prospects.

Something tells me (just a hunch) that Trump will once again make the mainstream media parrots look foolish and force them to eat many of their gloom-n-doom predictions for the U.S. economy.

At the risk of straying into cliché-land, a few chapters of The Art of War seem to apply to the next several months:

• Tactical Dispositions
• Variation of Tactics
• Classification of Terrain, and
• Use of Spies.

May you live in interesting times, indeed.

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