Trump has burst out in bluster and braggadocio declaring tariff war on all countries and regions of the world, upsetting decades of carefully constructing mechanisms of international trade aimed at expanding global commerce, exchange and production to uplift all but particularly the world of a majority of developing and least developed nations.

America doesn’t care, never cared and will never care for the rest of the world. That’s what “American First” is – America first and only, no more no less. America wants its $ 37-trillion debt resolved by other nations sacrificing their balanced trade for America’s sole benefit – while America continues to spend a trillion dollars annually for it war machine.

Trump blames every other nation for the economic and financial decay of America today but turns a blind eye to what America did to itself: allowing capitalist America to abandon it home to seek more profits from cheap labor of rising nations, wallowing in easy money and the “exorbitant privilege” of a fiat Dollar its printed with wild abandon.

China “opening up” and Belt and Road Initiative

            China opened to American capital that made exorbitant profits for American companies, and China delivered cheap high-quality goods American homes enjoyed. On the meager surplus using socialist principles China emancipated its society in record time from underdevelopment to be the largest economy speeding up front in global innovation and technology.

            What China did do with its surpluses from decades of “opening up” and the full socialist modernization of Chinese society is, plow all resources back into the development of the people and society: education that now produces 6 times more STEM graduate than the U.S., technology investments that produced leading technologies like 5-G and Deepseek.

            Unlike America that invested its “exorbitant privilege” of printing Dollars for the wars in Vietnam, Iraq, Yugoslavia, Afghanistan, Libya, West Asia, then Ukraine, China plowed more of its surplus into the Belt and Road Initiative (BRI) economic outreach to the world building railways, telecoms, power networks, roads, ports reaching 140 countries to date enriching the world.

American “denialism” vs. China’s multilateralism in BRICS Plus.

America has come to the end of its rope today and its cheer “Make America Great Again” is falling like an empty promise as it is unable to face up the real and simple solution – socialize American society, redistribute the $ 49-trillion the top 1% Americans own to stimulate consumption and domestic manufacturing, end all wars and save $ 1-trillion annually.

            China with the BRICS Plus, the economic partnership of Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Iran, the UAE and Indonesia, plus “partner countries” Belarus, Bolivia, Cuba, Indonesia, Kazakhstan, Malaysia, Thailand, Uganda and Uzbekistan , with 55% of global population and 46% of its GDP will lead the New Economic World Order.

            Together the BRICs will see the “Community of Shared Future for Mankind” come into fruition, consolidating the Global South commerce and away from U.S. unilateralism, imperiousness and destructiveness. Even Japan and South Korea sought counsel with China in the wake of the Trumpian trade tantrum.

Philippine contradictions.

The Philippines finds itself in a quandary, its given as an “ally” a lower 17% reciprocal tariff rate but not the lowest 10% of Singapore. , Traditionally export deficient its only hope as its Philippine Esport Zone Authority (PEZA) boss reflects is if China re-shored its exports to the Philippines – highly unlikely due to the anti-China geopolitics of BBM.

            While the United States under the mercurial President Donald Trump is turning global trade upside down with his “Liberation Day” universal sky-high tariffs on imports from all countries then suddenly reverses and pauses the same tariffs a week later, China steadfastly steers a steady path of trade consultations with RCEP (Regional Comprehensive Economic Partnership) partners Japan and South Korea with ASEAN.

            America has no way of going around China’s dominance of the global supply chain advantage and every country negotiation zero tariff arrangements with the  US ultimately has to t urn to one form or another of joint ventures in re-shored Chinese production in the foreseeable future. The Philippines’ problem is its misplaced geo-strategic policies of alienation from China and domestic cost structures in energy supply, infrastructure deficiency and labor force skill-deficiencies.

Digital Yuan Payments and De-dollarization

While the chaos emanates from the U.S. alienating all its trade friends and foes alike China continues its reliable “opening up” of its economy while continuing with its visionary leadership of the global economic community towards trade multilateralism and de-dollarization. Little noticed is the People’s Bank of China (PBoC) operationalization of its Digital RMB (or Yuan) connecting 10 ASEAN countries plus six Middle Eastern including the UAE.

            The Digital Yuan Payments System undercuts the U.S.-based system for international trade transactions of  payments SWIFT (Society for Worldwide Interbank Financial Telecommunications) and bypasses 38% of the SWIFT system with a blockchain-run transaction system that warp-speeds settlements down to seven seconds, cut fees by 98% and in a secure and open system that in SWIFT would take 3-5 business days pass through several banks and open to U.S. sanctions.

            By some estimates about $ 1.2-trillion of transaction will be diverted away from the U.S.-controlled SWIFT through this Digital RMB blockchain system. Given that China is the top trading partner of 120 countries around the globe, the true ”liberation” is going to come from this Digital RMB or Yuan system as it helps countries and the world shed the vestiges of US Dollar hegemony that has abused nations long enough with sanctions and manipulations.

“MAGA-lomania.”

The Unipolar world that emerged after the demise of the 20th Century US rival Soviet Union has apexed today in Trump what an American  peace advocate calls “MAGA-lomania,” a mage-country obsessed with its own power since the 1990s promising to make the 21st Century the “American Century.” To its surprise it did not turn out that way as the 21st Century is now t turning out to the Asian Century as the region rises with China.

            Few Filipinos watching the Trump trade war run amuck realize that the main target of Trumps trade tariffs now is Asia and ASEAN. China is hit with 125% tariff now while China raised tariffs against the U.S. to 84% with a universal export ban on seven critical rare earth minerals essential for U.S. defense, microchip, power and other high-tech production. The U.S. stock market plunged to a loss of $ 10-trillion prompting a Trump pause on tariffs except for China.

            “MAGA-lomania” had come face-to-face with reality that the U.S. cannot have its unilateral ways anymore, and the truth is while Trump continued to brag on raising the tariff on China to 150% (we are losing count already) that is already a meaningless level – it has had to take a backfoot while China gains the upper-hand consolidating and continuously expanding it is market with Asia, Middle East, Latin America and Africa.

Philippine exports will depend on China’s relocating.

            The Philippines has and will continue to be an export underperformer even with the second-to-the-lowest tariff imposition by the Trump tariff tantrum, higher at 17% only than Singapore which was slapped a 10% tariff by Trump. That, however, doesn’t matter as production cost is higher than other ASEAN countries starting with electricity which is 30% higher than Thailand, 50% higher than Vietnam and 60-7-% higher than China.

            The current Philippine foreign policy positioning also prevents it from taking advantage of the lower U.S. tariff on it compared to the 49% for Cambodia, 46% for Vietnam, 36% for Thailand, 32% for Indonesia and 24% for Malaysia. But even the PEZA (Philippine Export Processing Zone) authorities are hoping for Chinese re-shoring to the Philippines to circumvent the U.S. Trump tariff wall will be frustrated by the government’s anti-China policy.

            The “MAGA-lomaniacs”  will have no choice but to settle down and negotiate with China after a month or two as the US $ crash deepens due to the “flight from the dollar” created by the uncertainty of U.S. assets for investors, inflation skyrockets in the U.S. (as Nike says, they may move production out of China but to India as U.S. costs are too high) and cellphone prices and pharmaceuticals rise 50% to 100% due to irreplaceable components from China and Asia, etc.

            Trump is known to relent when cornered, he is likely relenting on the attack on Iran, he is relenting on the Ukraine War, there’s a 50/50 chance he will relent on the trade war with China – otherwise the world should prepare for a kinetic world war ala WWI and WWII. ###

 

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