Over the past several months, I have been examining the underlying or hidden motivations behind the currently expanding global trade war, including the impressive level of cognitive dissonance surrounding the issue.
The political left doesn't seem to have an intelligent grasp of economic issues in the slightest. I'm not seeing any critical discussion from leftist media outlets or pundits on fiscal uncertainties, and the only reaction that is common from them is that they hope that the trade war results in the financial downfall of the US so that Trump can be voted out in 2020. They may very well get their wish, but they seem to imagine themselves celebrating at the end of the disaster, and I predict they'll be so concerned with their own financial survival that they won't have time to celebrate...
The initial reaction in conservative circles to the trade war was unfortunately overconfident denial, with many refusing to call the situation a “trade war” at all and some predicting an end to the conflict before it began. Obviously those assumptions are proving incorrect.
Now that acceptance of the trade war as a reality is setting in, the Trump bandwagon is doubling down and embracing blind enthusiasm for what they assume will be a victorious outcome, no matter how long it takes. Though the team-geopolitics mentality is enticing in some ways, I don’t find much in the facts and evidence department to support the notion of America winning a global trade war. As I outlined in my article America’s Debt Dependence Makes It An Easy Economic Target, as long as the U.S. retains historic levels of debt on a government, corporate and consumer level, and as long as we remain addicted to foreign investment in that debt, trade war opponents have all the ammunition they need.
The argument I now see regurgitated over and over is that this trade war has actually been "going on for decades", and only now do we “have a president with the guts to do something about it.” I’m not sure where this nonsense meme was started, but it’s everywhere.
The U.S. has NOT been engaged in a trade war “for decades,” not with China or any other nation. It has been involved in a subversive trade arrangement which benefits the elitists on both sides of the world while the common people suffer. Only in the past year have we seen a “trade war” develop, but even now, it is a staged war that will once again empower international banks and global elites.
It is hard to argue the longstanding trade war meme when considering the facts. While China has indeed enjoyed a trade surplus with the U.S. for many years, this was strictly maintained in exchange for Chinese investment in U.S. Treasury debt and the U.S. dollar. In fact, it’s absurd to claim that the U.S. has been “disadvantaged” in global trade when it is the dollar that is used to facilitate nearly ALL international trade as the world reserve currency. Dollar denominated assets have been the go-to safe haven investment for decades for this exact reason.
Back in 2008 during the initial stock market collapse, mainstream media economists and some alternative economists alike argued incessantly that emerging market investors and foreign central banks would “never” pull back from American markets because