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Introduction:
The global situation is fluid, shall we say. A foggy picture is emerging but is too enchanted with mist to formalise into anything discernibly real at the moment. However, one notion seems probable - The US trade and tariff war is firmly directed most at China and the Chinese communist party. If so, history exists on this line of enquiry. So, let’s start there and begin an examination of this recent economic history between the United States and China on trade and perhaps by the end of this piece wrap our heads around where Ireland might sit in a trade-war between the two and the global restructuring and rebalancing act this will inevitably entail.
The last week - since April 2nd- and the United States release of specific tariff details and countries targeted - has been tumultuous to say the least. One minute the world is going to hell in handcart and then all of sudden its pointed in the opposite direction. Wednesday, April 9th, was a case in point. Mid-afternoon I sat down to pen a little six hundred word piece to dust away my early week cobwebs. A couple of hours later, I hit the publish button and re-entered social media to scan the landscape, only to discover US stock markets had risen by about 4 trillion dollars. Saddened, and a little perturbed to note that satirizing Simon Harris could have such a devastatingly positive effect on global market forces. Lesson learned and apologies on that one.
Suffice to say, things are moving fast and all the time.
A three month snap-shot of the US Presidency
The first 90 days of Trump 2.0 is the first US presidency in the era of technology to almost match and out-pace the social media cycles. Ukraine, Russia, Israel, Gaza, Iran, Trade-wars, DOGE, and even statements on Greenland all come tripping off the tongue. Much in the way of stated intentions and some success, especially in the area of government waste and corruption. But long-term strategy seems a little too thin on the ground as of yet.
The trade-wars, though, have a very different feel to them. A global magnetic attraction to this subject line is evident and Trump 2.0’s every move, signal and utterance has an almost pandemic level of intensity attached with yo-yoing world stock exchanges and bond markets adding additional colour and dramatic effect. At times like this zooming out is second only to tuning out.
Wednesday’s 90 day suspension of US tariffs on the rest of the world shocked everyone; critics and supporters alike. The decision to initiate them in the first place began to raise questions for the first significant time from new allies like Elon Musk. The re-orientation of world trade firmly towards the mountain of the United States is getting down to the real business of the Trump presidency. My sense is this next 90 day window will decide the fate of Trump 2.0. as doubters amongst his own bases of support have their faith tested.
This is evident in the world alternative media. Even popular, reliable alternative podcasts and generally supportive ones, like The Duran hosted by Alex Christoforou and Alexander Mercouris are starting to furrow their borrows worriedly. Not so much on Trump’s instincts and goals but rather his strategic abilities to deliver on them. Impatience is starting to grow. This impatience might well be a function of the impact AI and technology has had on our collect psyche and need for dopamine hits as anything concrete but nevertheless it will be something Trump 2.0 would be ill-advised to ignore.
As alluded to before on this platform Steve Bannon is the thermometer for taking the temperature of the mood of the America First movement, he’s also the single cleverest strategist Trump possesses outside the White House. On Thursday, a day after the tariffs pause, Bannon’s daily two-hour War-room podcast spent almost no time talking or analysing the 90-day pause on Rest of the world tariffs, an indication to me at least, imminent economic destruction was a significant part of the White House reasoning to surprisingly introduce the temporary stop.
The shock turn-around copper-fastened, intensified and provided certain proof on two separate, contradictory and long-term narratives circulating about Trump 1.0 since his first descent down that escalator into the political arena 10 years ago and will now be utilized to defend or detract from Trump 2.0.
Trump as dangerous maniac, threat to democracy and completely out of his depth.
Trump as chess grandmaster now playing 5D chess and not merely the 3 or 4D chess level of his first presidency.
As a result on-line toxicity, distraction and negativity is set to rise further as champions of each narrative are emboldened by essentially the same piece of news. But, while we wait for the next unexpected thing to explode onto our landscape, let’s see if we can flesh out this trade and tariff regime with specific reference to China and a line of attack stretching back to 2018 and Trump 1.0 - mindful of two inescapable facts or positive outcomes of the last ten days for the United States and President Trump.
The US administration have somehow managed to implement a uniform 10% tariff regime on the whole world, and by the end of this period of turbulence, in return most of the world are gratefully accepting of the outcome and temporary relief.
China stands pretty much alone now within US cross-hairs, facing trading tariffs of approximately 125% with the United States with much the same levels of attack pointed back in the United States direction by China. An unsustainable situation for both countries. One probably unsustainable for even 90 days.
Are these two results above after a seemingly chaotic ten days accidental or by design or even accidental design?
The next 90 days will tell us a lot. But one thing is pretty certain the Trump honeymoon period is now over and his enemies will feel emboldened to begin positioning themselves outside the gates of the White House in greater numbers.
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US / China 2018-2020 trade war and COVID-19.
The year 2020 will be recorded by historians for one line item agenda only. Yet, the year began with an interesting foot-note. While, news of an innocuous sounding coronavirus began leaking out of China, a Chinese trade delegation were visiting Trump 1.0.
On January 15, 2020, moments before our idly wandering friend the coronavirus metastasised into the darkly strange and wildly panic inducing Covid-19, the United States and China signed a "Phase One" deal on trade in Washington, D.C.
The deal was trumpeted by Trump at the time in the Washington Times as :
“righting the wrongs of the past and delivering a future of economic justice and security for American workers, farmers and families”
The agreement was signed by President Donald Trump on behalf of the U.S. and Chinese Vice Premier Liu He representing China. Although only one man is grinning in the photograph above, it was in truth, a deal containing a lot less than Trump 1.0 had wanted to deliver after two years of rhetoric and some US trade pressure on the Chinese Communist Party. The deployed tariffs up to that point in early 2020 included the following trade tariffs.
March 22, 2018: President Trump signed a memorandum under Section 301 of the Trade Act of 1974, instructing the U.S. Trade Representative to apply tariffs of roughly $50 billion on Chinese goods. This was primarily due to concerns over Chinese theft of U.S. intellectual property.
April 2018: The U.S. Trade Representative's office published a list of over 1,300 Chinese goods to be subject to tariffs, including products like flat-screen televisions, medical devices, and aircraft parts.
July 2018: The Trump administration announced additional tariffs on $200 billion worth of Chinese goods, which were implemented in two phases: 10% tariffs starting September 24, 2018, and an increase to 25% on January 1, 2019.
With the benefit of hindsight we can see the January 2020 US-China trade deal was designed to edge China down a new road, thru gritted teeth, and it sure as hell wasn’t the Belt and Road initiative. But, fortunately, for the Chinese communist party, the dark COVID-19 avenger soon emerged and rode to the rescue and within weeks too. Allegedly, originating from a P4 laboratory in Wuhan, China of all places.
Trump 1.0 quickly labelled this new phenomenon the “ Chyna Virus”. Five years on, I find it rather curious, that literally nobody in the US or China seems interested in establishing the origins of Covid-19 or the “ Chyna Virus “ and establishing exactly what happened at the outset of pandemic era. Never mind holding people or even countries to account for the destruction of the world as we knew it.
Anyway, this Phase One trade agreement was set to kick-start a process to re-balance the trade relationship between the world’s two superpowers. One a fading superstar and the other rising a little too fast. One can date China’s rocket-fuelled ascent to December 2001 with its admittance into the World Trade Organisation after almost 15 years of negotiations and trying.
In 2000, US president Bill Clinton actively campaigned for the US Congress to approve permanent normal trade relations (PNTR) with China, which effectively facilitated and rubber-stamped its WTO membership application form.
In a US State Department of State memo entitled “ Clinton describes his vision for China and the WTO “ he argued WTO entry would encourage China to adopt international rules, respect human rights, and integrate with the world.
A move away from communism, isolation and protectionism in other words. The past 25 years have proven that, in actuality, if anything, the free-world have inched ever closer towards the Chinese communist party’s vision of world order. In short a world integrating with the Chinese economy and not vice-versa.
Now, If we take a brief look at a ten year balance of trade chart between the United States and China the picture is quite startling and one can begin to understand why Trump exerts a goodly portion of his daily life claiming the Chinese Communist Party are ripping the US off for years.
U.S. Trade Deficit with China in $ Billions (2015-2024)
2015 - 367.3
2016 - 347.0
2017 - 375.9
2018 - 419.1
2019 - 345.6
2020 - 345.7
2021 - 355.3
2022 - 382.9
2023 - 282.9
2024 - 295.4
- Statistics courtesy of Statista
So, over a ten year period the balance of trade on goods sees the United States out of kilter by about 3.5 trillion dollars with China. One can appreciate why Trump might be concerned about this situation and its threat to American economic supremacy over-time. Now, of course, the economics of trade isn’t quite as simple as one set of complimentary figures might encourage you to believe, or a couple of Trump sound-bytes. For instance, the US government is running an annual current account deficit of close to 1.2 trillion dollars a year. Another way of putting that is the US is over-spending to the tune of 1.2 trillion a year and much of this over-run in expenditure is spent on imported goods which will inevitably skew the numbers. If the United States were not over-spending they could not be engaged in over-importing from any country line of thinking.
However, what most critics can agree on is that the current global economic model is on the verge of collapse ( once more ) and largely mud-sliding down the mountainside due to the weight of its own greed and incessant money printing. The status quo can’t continue. Critics of Trump’s philosophy don’t actually ever provide a coherent alternative themselves.
One point to note about the global clamour for a Tik-Tok like speed of response in delivering results is to take a second glance at the ten year balance of trade picture above. 2018 was the peak year of trade imbalance between the United States and China with a 419 billion dollar deficit. As outlined earlier it was also the year Trump 1.0 first began to implement tariffs on China. For most of the intervening years between 2018- 2024 the trend has seen the trade deficit move downwards and in the United States direction. In other words, Trump’s grand idea, even with limited implementation seems to have worked over time, but the needle moves slow with opposing forces attempting to move it slower still.
Where does Ireland sit in an economic war between US and China?
Ireland faces a number of dilemmas in the months and years ahead. One of them is our relationship with the Chinese communist party. Increasingly, we are transitioning into an epoch where our friends want to know that we are not just friends, but also, that we are not friends with their enemies. Ireland’s economic relationship with China has increased exponentially over the last number of years and can probably be traced back to the 2008 financial crash and the crisis decision making carried out in our name over the next five years.
Ireland's Immigrant Investor Programme, often referred to as the "golden visa" scheme, has issued a significant number of visas to Chinese nationals since its introduction. This visa scheme was based on the applicant possessing considerable wealth and bringing significant investment into the country. It will come as no surprise to Dublin residents and property hopefuls, in particular, that much of the competition in the property and small business purchase market in recent years is coming from Chinese investors who immediately jumped on board our golden visa scheme.
In 2022, out of 1,316 applications, all but 41 were from China, this suggests nearly all successful applicants were Chinese. Specifically, in 2022, 282 out of 306 approved applications were from China.
In 2021, 251 out of 264 approved applications were also from Chinese nationals. Very recently, the Irish government has shutdown this programme due to concerns over its exploitation and the dominance of Chinese applicants but the damage is already done. A case of closing the door once the horse has bolted.
Overview of Trade relationship between Ireland and China
Bilateral Trade Volume: In 2024, the total bilateral trade in goods between Ireland and China was in excess of €21 billion, marking an increase of 8.1% from 2023.
Export and Import Values: Ireland exported goods worth €9.5 billion to China in 2024, up 6.1% year-on-year. Meanwhile, imports from China reached €11.8 billion, increasing by 9.3% year-on-year.
- to view full statistic click here
So, we can see, unlike the United States, Ireland’s economic policies are becoming more and more dependent on Chinese imports and Irish exports to mainland China. Undoubtedly, though, the primary source of our so-called economic wealth and gargantuan economy over the last thirty years is the United States. In an escalating trade-war, our burgeoning and expanding friendship with the Chinese communist party is not one likely to be favoured by the Trump administration.
The Big Pharma Wars
It is well established now that the pharmaceutical industry is one of the flies in the Trump tariff regime ointment. A potential area of US weakness domestically. Whether by accident or design the Trump administration has declared outright economic war on China in the last 72 hours. One of the defensive measures the Chinese communist party may deploy in return is to dry up the export of pharmaceutical products and pharmaceutical compounds into the United States. I believe a very real concern exists within the Trump White House that the United States is unable to supply its citizens with the necessary pharmaceutical products to sustain its own population.
A side-effect of a long-term trade war between the US and China could very well be more reliance and not less on the Irish pharmaceutical sector in the short-term. An idea many reading this will not be enamoured with, including the typer of these words.
While, everything in Trump world is subject to change at the drop of pen ( or part of the overall grand plan), I suspect if he scraps the 90 day pause on reciprocal tariffs with the rest of the World before the 90 days are up it will have a galvanising effect on the world and push countries into the arms of the Chinese communist party.
If the first 90 days of Trump 2.0 have been exciting, unprecedented and seemingly moving at break-neck speed - my hunch is the next 90 days - will actually decide the long-term success or failure of it.
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I'd hold my nose and finally buy a copy of the Irish Times - but only if you were writing in it!
As usual...great reading....I really enjoyed this!!