By Vincent J. Truglia
We all know China and the US are in the early stages of a trade war. China’s overreaction to US tariffs has only made matters worse. Given China’s over-reliance on the massive US domestic market, this tariff war will end far worse for China than for the US.
Trump doesn’t just play the art of international statecraft as a game of 2-D chess, but rather his style is closer to what I would categorize as 3-D or even 4-D chess. The Chinese economy has already been suffering from anemic growth. The decline in exports to the US will likely cause a major recession in China. It’s near-term future would be bad enough if not for what may soon happen which could further cripple China’s economy.
Iran
Trump has planned meetings in Oman this coming weekend with Iran regarding its nuclear weapons program. Unless Iran capitulates quickly, I expect Israel and the US will attack Iran’s nuclear facilities. However, if the talks in Oman do not result in an agreement, the most likely outcome of a full-scale attack will be a surge in energy prices around the world. Since China imports the vast bulk of its energy needs, a sharp rise in energy prices will further cripple the already tariff-drained Chinese economy.
If the US and Israel attack Iran, the Chinese economy will go into an unprecedented crisis. The threat posed by the tariffs, along with potentially higher energy prices, will represent the worst threats to the CCP regime since the Korean War.
Trump’s Endgame?
The combination of strangling tariffs, when combined with higher energy prices, would put China’s economy and especially its military ambitions on hold. Could this be Trump’s endgame? Even if this isn’t his explicit goal, it might turn out to be the result.
As always, Clear and Candid.