Donald Trump has just lost his trade war with China – leaving US on the brink
US President Donald Trump is all noise. China is quietly beating him.
President Trump is what happens when empires decline. A showy, shouty man, elevated not for vision, strategy or competence, but for sheer volume.
His rise is a symptom of the long descent of US power since its zenith in the aftermath of the Cold War.
Strong, self-assured nations don’t elect men like Trump. But the United States did, twice, because the truth of its decline is too painful to face head-on.
Better to rage blindly at the world than confront reality.
Trump thought he could out-yell China too.
He believed his boardroom bravado and reality-TV swagger would bully the world’s second biggest economy into submission.
Instead, he’s been met with discipline, patience and strategic clarity, all the things he and the US lacks.
His trade war has scarcely begun and it's already clear who will be the victor. And it's not Trump.
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Trump thought tariffs would cower Beijing. Instead, China matched and raised them. Trump then went to 145%, they countered with 125%.
Trump expected noisy panic and retreat. He was met with cool, quiet preparation.
American consumers are hooked on low-cost smartphones, clothes and cars. They will howl as prices rocket. Chinese workers will suffer too, but won't make half as much noise.
US national debt now stands at a staggering $36trillion, a third of which must be refinanced this year.
As Trump rants, US Treasury yields have soared to a 10-year high, driving up already sky-high borrowing costs.
Trump has made another strategic error.
Strategic materials like gallium, dysprosium and yttrium are essential for modern technology, yet the US sources nearly all of them from... China.
Trump exempted them from tariffs, and Beijing sniffed weakness. It's now already halted shipments of seven rare earths, all vital for building US defence equipment and space technology.
What an own goal.
Trump should have built up reserves before picking a fight with China. He didn't.
China, for all its internal issues, can endure. An authoritarian regime can demand compliance.
Beijing has been playing a long game. Just look at how it has slowly put the UK economy in a stranglehold.
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China’s dependency on exports to the US has declined dramatically. Its economic future lies with Southeast Asia, Africa, and the Middle East.
Xi Jinping doesn’t need to win quickly. He just needs to outlast a divided, distracted America.
Trump has already suffered one major defeat in the bond market revolt. The next will be bigger.
His supporters may still believe the bravado. They might even revel in the chaos. But China is about to expose just how empty it all is.
This didn’t have to happen.
The US still has the innovation, alliances and soft power to lead the 21st century. But Trump is throwing it away by alienating key allies, sabotaging global institutions and rushing into a conflict his country isn’t equipped to fight.
Many of his supporters, including billionaire backers and working-class voters, will be its biggest losers.
Trump will no doubt be the last man shouting. But on his watch, even more of America’s power will have quietly crumbled.
It's all over bar the shouting. There's still going to be an awful lot of that.
