I wrote ‘The Awakening of the United States and Our Obsession’, which talked about the reasons behind the US dollar becoming the main international trade settlement and storage currency. I pointed out that the hard support for the value of the US dollar was its former position as the largest manufacturing country and its later binding with oil and energy. Now, both of these supports are beginning to collapse, and it should be time for the current largest manufacturing country to emphasize RMB settlement.
As soon as I said this, Mr. Trump said, “BRICS countries are trying to get rid of the dollar system to carry out international trade, but we will never stand idly by! We ask these countries to promise that they can neither create a new BRICS currency, nor support any other currency to replace the strong dollar, or they will face 100% tariffs from the United States! They must be ready for all goods to no longer be sold in the United States. Of course, they can find another big fool to do business with, but the United States will never let it go! It is impossible for the BRICS Group to replace the dollar in international trade with other currencies, and any country trying to do so should bid farewell to the United States market.”
I can’t help saying that Mr. Trump’s reaction is really fast. picture
This proves to some extent that I have spoken the truth and touched the lifeline of the US dollar and the US economy. Yes, Mr. Trump wants to return to manufacturing and restart oil and gas development and production in the United States in order to rebuild hard support for the US dollar. He is one of the few American politicians who understands. But is the return of the manufacturing industry just relying on the big stick of tariffs?
Since Mr. Trump took office in 2016, he has never seen anything useful in the economic policies he advocated and implemented to save the US dollar and the US economy, except tariffs. Even with tariffs, despite their impact on the global economy, the past 8 years have provided a clear answer on their effectiveness. Under Mr. Trump’s huge tariff stick, although the total trade volume between China and the United States has declined, China’s trade surplus with the United States has not decreased, or even increased. At the same time, China’s global trade volume is also continuously increasing. If this does not prove the failure of Trump’s tariff policy, it must be that human beings no longer have normal right and wrong ideas and basic common sense.
Trump’s superstition in the magic of the tariff stick is based on his confidence in the hegemony of the US dollar. As long as the world is still superstitious about the US dollar and willing to trade their hard made things for US dollars, Americans can always live a happy life of printing US dollars to buy and buy, and Mr. Trump’s tariff stick can naturally have magic power. If you don’t listen, you will increase tariffs, buy less or not buy your things, and then you won’t be able to survive. This is obviously Mr. Trump’s basic cognition and the underlying logic of its economic policy.
Of course, Mr. Trump also knows that this is only temporary, otherwise it will not emphasize the return of manufacturing industry and restart the oil and gas energy industry, so as to renew the life of the dollar.
Interestingly, Mr. Trump’s tariff has not yet arrived, and China has taken the initiative to cancel the export tax rebate policy for more than 260 products. What does this mean? It seems that Mr. Trump has not seriously thought about it. Maybe Mr. Trump thinks that this is to cater to him and to cooperate actively. I want to increase tariffs, and you will first cancel export subsidies and cooperate with me to restrict exports to the United States, so that American manufacturing can rise again without competition or weak competition. Ha ha ha, Trump Coke is broken.
The real question is, can the United States really quickly fill the gap in import supply without Chinese goods?
You should know that Mr. Trump’s tariff policy is not just for China. He said during his campaign that he would impose a 60% tariff on Chinese goods after coming to power, but he really won the election. He then changed his mind and said he would temporarily impose a 10% tariff on Chinese goods, instead imposing a 25% tariff on Canada, a staunch ally of the United States, and neighboring Mexico. During the election campaign, Trump said that he would impose tariffs of more than 10% on all countries in the world. After winning the election, he raised the general tariff of 10% to 20%, only emphasizing that China would temporarily impose tariffs of 10%. What exactly does this mean?
Mr. Trump’s true heart is like a mirror. Without Made in China, it is impossible for the United States to fill the manufacturing gap in the short term. It is no exaggeration to say that without importing Chinese goods, Americans have to use their hands when going to the toilet.
For the time being, Mr. Trump only imposed a 10% tariff on Chinese goods, which seems to be a goodwill release to China. The prohibition of BRICS countries to conduct trade settlement outside the US dollar system has undoubtedly exposed Mr. Trump’s conscience. He certainly knows what this means.
It is obviously unrealistic, at least in the short term, to make the whole world abandon US dollar settlement. But Russia has already started, and although the share of RMB settlement is not large, it is growing at a very significant rate. In the absence of a global unified action to abandon the US dollar, a few countries abandoning the US dollar settlement first will undoubtedly bring a certain degree of pain to the export economy. If these countries have a firm attitude and are willing to endure the pain to create a new situation, then a new situation will definitely be opened up. Russia relies on energy, while China relies on a global manufacturing share of 35%. Mr. Trump said that the “BRICS Group” has accounted for 37.4% of the world’s total economy, more than 29.3% of the G7, and its total trade volume is equivalent to that of the G7. The BRICS group’s decision to abandon the US dollar is at least a consensus among the BRICS countries and has already begun to take action. Is the reason for such consensus and action based on infatuation with export trade to the United States?
I’m afraid it’s not that BRICS is infatuated, but that Mr. Trump and the United States are too narcissistic.
Mr. Trump said that the BRICS countries “can go to another big fool to do business with, but the United States will never let it! It is impossible for the BRICS Group to replace the US dollar in international trade with other currencies, and any country that tries to do so should bid farewell to the US market.” It is self-evident who Mr. Trump refers to as the “other big fool”. Mr. Trump said that “any country that tries to do this should bid farewell to the American market”, and he should be right. This is not just a matter of duty, but also proactive and conscious, isn’t it?
Russia bid farewell to the US market, Russia did not die, and the economy miraculously improved. This is actually the power of setting an example. Leaving the US market, China’s GDP may lose 0. X percentage points, but is this really crucial?
As I said, you can choose not to buy, and I can also choose not to sell. I suggest that China’s foreign trade be settled in RMB, starting with its trade with the United States and seeing how powerful the United States really is. If you don’t take it seriously, you will never reveal the truth, just like in the Korean War, if you don’t fight, you will never know the true strength of the other party, let alone today’s China is no longer the China of the Korean War, right.
Of course, Mr. Trump would not read my article before he said the arrogant and side leaking words. This is just a big situation. Mr. Trump and I are thinking about the same problem. I say this is interesting because it at least indicates that the problem I am thinking about is one of the most important and critical issues at present, and I hope that such thinking can be highly valued.