TRADE WAR BLITZKRIEG

As promised, newly elected President Trump has unleashed a multi-front trade war on both adversaries and allies with respect to trade imbalances that have made American businesses, particularly the manufacturing sector, uncompetitive.

This unprecedented ferocity of political and economic pressure through the weaponization of draconian tariffs is forcing targeted countries into immediate talks.

Shockingly, despite Trump's leaderships style during his previous presidential term, and his clearly articulated promises during the 2024 presidential campaign, most countries seemed genuinely stunned by how he has stormed out of the gate with respect to these matters.

Trump has been portrayed as dangerously unpredictable. However, domestically and internationally, Trump has consistently been forthright with relentless follow-up.

China The Vulnerable

Unlike during his first administration, the current trade issues with China favors Trump heavily for the following reasons:

China is experiencing a brutal deflationary period. Consumer inflation at almost zero.

China's $1 trillion trade surplus makes it overwhelmingly a manufacturing juggernaut. On the other hand, this trade surplus dominance prevails only if foreign demand is strong. Present-day, foreign demand has slackened considerably resulting in the following domestic challenges:

• Growing manufacturing over-capacity.
• Unpaid government workers because local governments that are drowning in debt.
• High unemployment among youth.
• Soaring housing foreclosures.
• Drop in domestic consumer demand for goods & services.
• Because of the aforementioned trends, there is growing civil unrest, higher crime rates and mass killings (vehicular ramming and knife attacks) that are either under-reported or unreported.

In a face-saving attempt to paper over its economic vulnerability, the Chinese government's recent reported economic growth rate of 5% goes contrary to anecdotal and video observations. Most notably is the surfeit of videos supporting the considerable decline in passenger traffic on the high-speed rail lines between major cities.

Manufacturing Behemoth Limping Along

To provide you a perspective of China's global manufacturing dominance, the link to the following chart entitled China is the World's Manufacturing Superpower (2022) provided by the United Nations Statistic Division:

The Big Three

China is among America's top three largest importers along with nearby Mexico and Canada. These three countries comprised about 40% of US total imports in 2023.

The link to the following chart entitled America's Main Import Partners (in 2023) provided by the US Census Bureau and the Bureau of Economic Analysis, provides a visual overview of US import partners.

SLAUGHTERING SACRED CASH COWS

Domestically, other gargantuan changes include either the dismantling, overhaul or even controlled implosion of numerous US agencies, of which the USAID is currently in the spotlight.

The Department of Government Efficiency's (DOGE) objective is exposing decades-worth of waste. It's a nice way of saying, in the British vernacular, that the billions in funds managed by these agencies are engaged in activities inconsistent with their mission statements.

There is strong preliminary evidence that the budgets of many agencies, funded by US taxpayer monies, have been nothing more than the largest money-laundering operation in history to line the pockets of unnamed, unidentified and unknown individuals and organizations unrelated to the agencies' official activities for relevant domestic and foreign public good.

These agencies with a surfeit of irrelevant oddball programs have been politically entrenched and subsequently greatly expanded for decades and thrived thanks to politically incestuous leadership over several administrations.

The DOGE's investigations and exposure have enraged the entitled multi-generational leadership and supporters of these agencies. DOGE is merely staunching financial hemorrhaging by cutting off their generous "allowances".

Conclusion & Takeaways

Timing is everything. Trump is leveraging the advantages he has with GOP majority houses and turbo-charged with executive orders.

His tactics are the necessary shock treatment to get long entitled countries out of their moribund practices and to the negotiation table to discuss and resolve trade issues to reach fair & reasonable agreements.

Just as importantly, these objectives are being reached at bullet train velocity. Indeed, Trump breaks economic stalemates, not campaign promises.

For the aforementioned reasons, expect political and economic volatility in the coming months and hopefully the fundamentals are restored to their natural state which reflects reality, not criminality.

© Copyright 2025 Cerulean Council LLC

The Cerulean Council is a NYC-based think-tank that provides prescient, beyond-the-horizon, contrarian perspectives and risk assessments on geopolitical dynamics and global urban security.