There are tariffs and there is the tariff.

This was a statement I made when the tariffs were put on by the Trump Administration. A lot was made about all the nations who were hit. That was nothing more than a ploy to get things moving.

When we look at tariffs, 10% is a tariffs. If that number if 60% or 70%, that is a "hey we have a problem and need to talk". This is exactly what happened.

That meant all those tariffs were just a part of a negotiation strategy.

As for the tariff, that was China. That is a category unto itself.

By the way, if 10% is a tariff, 145% (or more) is a trade embargo. There might as well be the Navy sitting between the two countries, nothing is getting through.

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China-US: A Multi-Tiered Battle

The tariffs were about trade deals. This is what will unfold.

When it comes to China, this is more than trade. Ultimately, it comes down to the power structure for the next 50 years. China is vying for it and the US is looking to take steps to stop it.

When it comes to the core of this part of the discussion, Kevin O'Leary sums it up. The Chinese have operated in a manner that has destroyed the US. Whatever one thinks of Mr. Shark Tank (or is that Cuban), he does know his stuff. He has extensive history in doing business in (and with) China. He knows how the system is rigged against the US.

Chinese firms that are publicly traded do not submit to the same standards as US companies. Foreign companies operating in China do not have access to the court system, yet Chinese companies can sue in American courts. Copyright laws do not exist as many start ups outsource production to China, only to have those companies steal the IP, make the product, and sell it for less since it has no R&D or start up costs.

The West made the mistake of thinking that if it allowed China into the WTO, and built its economy, that it would become just like the West. Well, it turns out, no, the Chinese will remain a totalitarian regime. Of course, some could make the case certain countries in the West are trying to move closer to China in that regard.

Battles on Every Level

We see it with AI. Quantum computers. Electric Vehicles. Finance.

The US and China are battling on every front. This is a war, fortunately with the military. Of course, we cannot overlook the buildup of each sides forces, at least technologically. Even if we stop short of that move, we see how the Chinese are looking to take over.

It is winning with EVs. I long stated there will only be two car companies: Tesla and the Chinese. The United States isnt even in the drone race. When it comes to refining rare earth materials, China is the overwhelming winner there. Even chip production mostly comes out of Taiwan (we can debate who owns that).

China has done a terrific job of protecting its national security. The US, on the other hand, awful. This is where the latter has to play catch up.

That doesn't mean that China is not without its headwinds. However, while it is economically dependent upon the US, it controls its own security. In fact, the Chinese have also excelled at infiltrating the US, scrapping data for Americans through companies such as Huawei.

The world took notice when the Chinese seemingly lapped the field in the AI model race with the release of Deepseek. This is an example of the innovation the Chinese are going to.

We are watching a remaking of the world order. The post-WW2 arrangement is dead. Europe is no longer a powerhouse, likely imploding before the middle of the next decade. On the global stage, there are two countries that matter and they are going head-to-head.

Trade is just the tip of the iceberg. It is possible the world financial center ends up in Hong Kong, not New York. We could see the next Silicon Valley be located in the eastern hemisphere. Even space is up for grabs, something that both sides are trying to dominate.

Posted Using INLEO