China makes next move in tariff war with Trump

When Trump started this tariff war, I had stated from the outset that the one country that really mattered was China, as it had significant leverage.  

If China decided to use that leverage, it would utterly wreck Trump’s strategy. Well, China used its cards far earlier than I ever thought possible.  

Ready to fight 

While most countries immediately reached out to the United States to work out a deal, China decided to dig in.  

China's ambassador to the United States, Xie Feng, stated that while China would prefer not to be in a trade war, it was ready to dig in for the long haul.  

Xi stated, "A good traditional Chinese medicine recipe usually combines many different ingredients which reinforce one another and creates the best medical effect. 

"Likewise, the earth is big enough to accommodate both China and the U.S. We should pursue peaceful coexistence rather than collide head-on, and help each other succeed rather than get caught in a lose-lose scenario." 

China curbs rare Earth exports 

When I initially addressed this trade war, I warned that two areas where China could potentially cripple the United States were if it severed supply chains were medicine and minerals.  

Last week, China chose to curb rare earth exports, which is a crippling blow to the tech and energy industry, which need these minerals to produce chips and batteries for tech products and electric vehicles.  

While the United States has plenty of these minerals, the drilling areas have been protected by legislation, which has made us virtually entirely reliant on China, which is why Trump has been pressing Ukraine for a minerals deal.  

Currently, China accounts for more than 60% of all rare earth production and over 92% of its processing, which is a significant concern for Trump, as reflected in the continued decline of the market.  

China returns Boeing plane

China has just played another card, announcing that it would be returning a Boeing 737 Max that was earmarked for a Chinese airline. China has reportedly ordered all Chinese-affiliated airlines to reject any deliveries from Boeing while this trade war continues.  

Lin Jian, the chief spokesperson for the Chinese Ministry of Foreign Affairs, stated that he was “not familiar” with any formal order from the government, but the planes being sent back could not be denied.  

I would also note, after a discussing with some friends on the hospitality industry, I checked on tourism from international travels, and some markets are reporting a decrease by as much as 10%, which is crushing, not only for the industry, but for local businesses in these cities that depend on that money during their respective tourist seasons.  

Trump must address this issue, and he needs to do so promptly. I had been preaching patience to this point, but China just trumped Trump, and we are starting to get to a point of no return. Gold prices are soaring, and that is not a good sign for the strength of the U.S. dollar. This is not fearmongering by any means... it is reality, and that reality is about to get extremely ugly in terms of our economy if Trump cannot pull us out of this nosedive. And that is exactly why you see so many Republicans starting to question his strategy and create some distance between themselves and Trump.