Crisis in China- U.S. Tariffs Hit Hard, China Economy COLLAPSING.mp4

The developing trade war between the United States and China keeps ratcheting up. There are reports tonight China has suspended exports of rare earth minerals. It's hard to predict how this will shake out but it's looking increasingly like the goal for the U.S. is to reorient global trade away from China. They can inflict a lot of pain on their own populace and they're going to be willing to do so to win this trade war with the United States. This is a really bad story for China where the economy is probably already contracting. China just started an economic nuclear war with its newest export ban. CCP wanted to win the trade negotiations that were ongoing with the United States and just two weeks before signing the final deal they launched a surprise attack on U.S. businesses. But you see now Xi Jinping is realizing that he may have overplayed his hand. That's because China expected the U.S. to fold quickly. But the U.S. is fighting back and it's hitting China right where it hurts. So this current story starts in the middle of September. On September 14th and 15th U.S. and Chinese delegations met in Madrid, Spain. The goal of the meeting was to hammer out trade talks, hammer out all the details. This is where a path was agreed on how to take care of TikTok. But they also agreed on something very important. Both sides said that he will have a temporary truce. Meaning no one would put on any new restrictions or new tariffs until the trade talks are done. Then the next meeting was scheduled for late October. This is where President Trump and Xi Jinping were expected to meet in Malaysia at the South Asian Economic Cooperation Summit. But you see, Chinese head negotiator saw something in Madrid which gave him a weird feeling. He walked away thinking that the U.S. was a bit too eager to get this trade deal done. And he believed that China can take advantage of that American eagerness. But boy was he wrong. And we'll get to that in just a second. You see, ever since Liberation Day on April 2nd, the U.S. has had a 30% tariff on Chinese goods that are flowing into the country. Now, 30% is still a lot lower than the original 145% that President Trump announced in April. But it's still high enough to hurt many Chinese factories. So, China wanted to use its leverage to get the U.S. to remove this 30% tariff. And that's why, few nights ago, China dropped what many have called an economic equivalent of a nuclear bomb. in an effort to really hinder our economy. You know, some call this economic warfare, you know, a Pearl Harbor moment for our economy. What, to me, it says is we need all hands on deck to win this competition. And we need people to stop treating China like it's a normal country in the economy. They don't deserve the normal trade relationship status. They are not a developing country. They are leveraging everything they possibly can against the United States and the world order that we have benefited from. So, let's go over exactly what China did. Huge announcement from Chinese Ministry of Commerce. Foreign entities must now obtain an export license if they want to re-export or manufacture abroad any items that contain over 0.1% of Chinese controlled materials or are produced using Chinese origin rare earth technology. In simple terms, CCP wanted every single country to ask for permission before they export anything to the United States. And the reason I say this is because I'm sure as many of you guys know, China controls like 90 plus percent of rare earth refining. And anything, any technology, any electronics has rare earths inside it. So, if there's any country that wants to build a laptop or a phone for US consumers, they need to ask permission from the CCP. And this is exactly why the bar for permission seeking is so low. 0.1% of Chinese material. As President Trump called it on his tweet. This is unprecedented. And it wasn't just rare earths either. China also put export bans on hard materials like lithium batteries and artificial graphite anode. You see, they really wanted to put extreme pressure on the United States. That's because in two weeks, the presidents are expected to meet in Malaysia. And before that, China wanted to use all the leverage that they had to get what they wanted. And that's why one economic expert in Wall Street Journal called it an economic equivalent of a nuclear war. China's plan was to destroy American industries, especially the AI sector. And that's why Chinese negotiators believed that with a threat that dangerous, US would fold very quickly and it would just give in to Chinese demands. But this is where they were wrong. So what happened? I mean, you've met with the Chinese. Treasury Secretary Besant has met with the Chinese, came out of the last meeting suggesting that there was significant progress. Why the change? That's exactly right, Brett. For the past six months, well, just to go back a little bit, six months ago, China took an action like this with respect to rare earth magnets. And over the past six months, we've been quite successful in securing the flow, the regular flow of those magnets to China. We've managed to have a truce, a fragile truce with China with respect to tariffs, where we remain, we continue to have high tariffs on China, but we're able to talk to them and have great communication. This action that recently happened. I mean, listen, China, you know, negotiating with China is not like playing patty cake. On the one hand, they have a meeting with President Trump coming up, or they had one coming up. And on the other hand, they truly seek to acquire domination over global technology supply chains. This is a move clearly that they had in their pocket for a long time, and they thought that it was an appropriate time to deploy it before this meeting. And I think they've really miscalculated what they've done here. Boy, did they miscalculate. Because this is how President Trump responded when he learned about the Chinese actions. It has just been learned that China has taken an extraordinary aggressive position on trade in sending an extremely hostile letter to the world stating that they were going to effective November 1st, impose a large scale export controls on virtually every product they make and some products that are not even made by them. This affects all country without exception, and was obviously a plan devised by them years ago. It is absolutely unheard of in international trade and a moral disgrace in dealing with other nations. Based on the fact that China has taken this unprecedented position and speaking only for the United States of America, not the other nations, starting November 1st, the US will impose a tariff of 100% on China over and above any tariff that they are currently paying. Meaning, the original 30 plus another 100 Chinese factories will be paying 130% tariff on anything they want to sell to the United States. Also, on November 1st, we'll impose export controls on any and all critical software. It is impossible to believe that China would have taken such an action, but they have and the rest is history. Thank you for your attention. Now, you see, this is where CCP was mistaken. And let me explain why I say that. The CCP thinks that their leverage comes from the US willingness to get a trade deal done and get it done fast. But they are forgetting that the US leverage comes from the fact that Chinese economy is just structurally not well. They're having a real estate crisis, their manufacturers are on a brink of collapse, and if CCP wants to increase the trade war, well, guess what? The factories need Western consumers a lot more than Western consumers need those Chinese factories. Well, first of all, I would say that China's economy is floating on the idea that they can continue to produce and export huge amounts of excess capacity, frankly, of manufactured goods and send them to overseas markets. The United States is the number one consumer, the number one importer. We are the dumping ground for Chinese goods. And so that is huge leverage. In fact, this is why they came to the negotiating table back in May the first time is when we had very high tariffs on them. It's actually not our desire to do that. Our desire is to have a healthy, balanced trading relationship with China. That's fair. But it's a rocky road getting to that. You know, we have a market. They have a government that's running the economy of their country. We have a free market, and for them, it's a government. Now, this is something we have talked about when this trade war began back in April. But the person who's buying the goods has a lot more leverage than the person who's selling it. That's just true in most cases. But on top of this, China's situation is a lot more complicated because U.S. consumers love buying stuff. And U.S. is China's biggest trade partner. It's hard to replace American consumerism. Not many countries in the world can buy like Americans buy. And Chinese factories that are supplying these consumers in the U.S. cannot just turn around and start selling this stuff to people in Asia or people in other continents. But U.S. consumer, on the other hand, can buy this stuff from other countries. In fact, countries like Vietnam, India, and even Mexico are just waiting on a chance to become the factory for the United States. They have seen what that does to an economy with China's economy, and they want to be next. That's all to say that China is about to find out that China needs U.S. a lot more than U.S. needs China. And the airplane story is the perfect example of this. Back in April, Xi Jinping put out this message to all Chinese airline companies saying, hey, we're in a trade war with U.S., so don't buy any Boeing planes. But the problem was a lot of Chinese airlines had put in an order for a Boeing plane and waited like three years. And when their order was ready, Xi Jinping was telling them, don't take in the order that you need to increase your revenue, increase your profit. Which is not unreasonable, I guess. But the fact is Xi Jinping himself was flying around in a Boeing 747 all the while he was telling Chinese airlines that they cannot buy a Boeing plane. And this is where many Chinese people started pointing out the hypocrisy. Well, guess what? President Trump is doubling down on that. And here's him explaining how this war could escalate even further than China can afford. We'll see what happens here. Go ahead, please. What else besides software could be on the table in terms of export? A lot more. I mean, you have a lot more. We have airplanes. We have airplane parts. You remember that from last time. We were just surprised that China have a very good relationship with President Xi. And they did that. This is not something that I instigated. This was just a response to something that they did. And they didn't really aim it at us. They aimed it at the whole world. The whole world is subject to it. So I thought it was very, very bad. But we have many things, including a big thing is air. But they have a lot of Boeing planes and they need parts and lots of things like that, Steve.