Trump’s Chinese Trap

What Trump is trying to fix with his tariff campaign was the subjection of the American people to predatory international labor arbitrage. It was a bipartisan process executed mainly during the George HW Bush and Clinton Administrations.

What happened essentially was that the wealth of the middle class, created through thousands of manufacturing facilities across the nation, was transferred to our parasitical financial sector. Profits and valuations increased as cheaper labor abroad was utilized for production.

I’d like to emphasize that this process was incredibly predatory. For example, a silent corollary to NAFTA was that the USA would allow a massive illegal influx of Mexicans who’d hitherto been sustained by farming corn since time immemorial as there’d be no way for them to compete against American farmers in the Midwest. The parasites at the top had created a very profitable situation for themselves.

This is how an American town that used to have middle class jobs provided by factories had the rug pulled out from under it as the factories were relocated to China while suddenly it was flooded with Mexicans to undercut wages in the menial jobs leftover. The Chinese wanted to develop their economy, but this whole scheme was devised by American high finance leaving the average American wondering what had hit us.

Underpinning it all was the Triffin Paradox, meaning that the we had to run large trade deficits in order to supply the rest of the world with US dollars, which had been established at the behest of the USA as the global reserve currency by the Bretton Woods Agreement back in 1944.

This is an unsustainable situation that has to be fixed somehow, but I’ve never come across a more realistic plan that what Trump is attempting at present. He can never address the issue by getting Congress to pass legislation, so he’s using the only decisive tool at his disposal, which is the imposition of tariffs.

This works to some extent on most countries. For example, the political process of Western Europe is captured entirely by the USA, meaning these countries are led by a class of politicians even more reprehensible than we enjoy here in America. An American president could probably make them get on their hands and knees to bark like dogs.

Germany is a pretty instructive example. Using the Ukraine situation as a pretext, it’s being cut off from its cheap Russian energy supply and export market. This is quite a profitable situation for American energy exporters, and also for places in the US which will have manufacturing facilities relocated from Germany. Meanwhile, no politician from the German establishment will ever stand up for their own people.

However, China is an entirely different story. Trump’s approach of slapping a country with high tariffs first and then requiring them to publicly cave and cut a deal with his administration has created a confrontation with China because no Chinese leader can remain a Chinese leader if he caves to Trump. Slimming down high profits a bit to keep the peace is actually a reasonable proposition to the Chinese if presented to them for private negotiations with the result unveiled publicly as some form of building cooperation.

Their culture doesn’t allow for public capitulation, nor does the entire ideology of China built up by the CCP following China’s 19th and early 20th century civilizational collapse. For instance, their national anthem is about how they refuse to be slaves and they’re going to build a new Great Wall out of their own flesh and blood. Trump shouldn’t have used his confrontational approach with them which requires the public capitulation of their dignity. President Xi was forced to conduct the same maneuver in response.

What probably compounded this miscalculation by Trump is a mentality I see from military officers and older Americans which vastly overestimates the power of the USA. This leads them to assume we should pursue objectives that we can’t actually achieve. Exports to America only constitute about three percent of Chinese GDP, while much of our GDP is constituted by chicanery, not the physical production of real things.

Back in 2022, Putin was forced to intervene in Ukraine to create a justification for sanctions that would collapse Russia’s economy. The American establishment was so confident this would happen it was boasting that it happened immediately. Three years later, it has never happened. Russia’s economy is thriving and it’s reorienting itself to the East. The loss has been taken by the US and Europe instead.

As a result of our unprecedented sanctions, the ruble was almost immediately reduced to rubble.

The Russian economy is on track to be cut in half.

It was ranked the 11th biggest economy in the world before this invasion — and soon, it will not even rank among the top 20.

— President Biden Archived (@POTUS46Archive) March 26, 2022

The CCP will still be there after Trump leaves office in a few years, so its leadership doesn’t have the same sense of urgency that Trump has with the US stock market, which is erroneously cited as the measure of our economic health rather than the personal finances of the average American, which are abysmal.

Another issue is that I’m not sure how some of this high value manufacturing could be relocated to the US with the knowledge base and workforce we now possess. I’ve seen the chip foundries located in places like Hsinchu, Taiwan up close. Even a low level position in one of these facilities is beyond the ken of a diverse American like Pedro or Lakeisha. TSMC isn’t an Amazon warehouse.

The best description I’ve heard was from a European engineer who told me that if you want the money from such companies, you need to forget that you’re human. Even a high quality white American worker wouldn’t want to work the way that they work over in East Asia. It’s a competitive advantage that we can’t leverage against them.

Beyond the human issue is that of AI and automation. I doubt Trump even realizes just how automated that manufacturing has become in China. So, yes they’re having very serious problems with their birthrate just like every other country on the planet with a modern economy, but it’s not as serious a problem for them as Americans who triumphally cited this issue as an indicator of China’s weakness seem to believe.

In terms of a resolution, Trump would have to give the Chinese some sort of way out which doesn’t involve claiming to Americans that he won. They really don’t like being embarrassed. For instance, the way the CCP deals with embarrassment domestically is to pretend something didn’t happen wherever possible.

From what I’ve observed up close, a Caucasian advantage over East Asians is that we’re much better at safety. I’m not just referring to driving, which isn’t a stereotype and will become alarmingly apparent to you if you ever find yourself on a motorcycle in China.

For example, natural gas. Things in China just blow up on occasion. Lemme tell ya, it’s pretty nuts to watch a city block explode. When that sort of thing happens, officials will try to scrub footage and discussion from the internet and pretend like everything is normal.

If Trump can help the CCP to pretend this issue has gone away, this is something the CCP can probably accept. They have the savior faire to understand they shouldn’t claim victory over someone like Donald Trump. That seems to be what’s getting worked out with this temporary cessation of the trade war. Something is probably getting worked out behind the scenes right now.

The Trump administration and China have agreed to slash tariffs for the next 90 days in a push to deescalate a trade war between the two countries. https://t.co/XHlnG6DRMb

— USA TODAY (@USATODAY) May 12, 2025

Ultimately, the issues of trade imbalance and the disappearance of American manufacturing were deliberately created by decades of American foreign and domestic policy, like I already said. That’s the only way it can be resolved, if that’s even possible because America is so far gone at this point. It’s definitely not a concession that Trump can extract from China, so my advice is to temper our enthusiasm.