Blain: Trump Picked A Great Moment To Declare Trade War Against China | WHAT REALLY HAPPENED

Blain: Trump Picked A Great Moment To Declare Trade War Against China

Blain's Morning Porridge, submitted by Bill Blain of Shard Capital

"There is a time to every purpose under heaven…"

It feels like Autumn has arrived. There is a chill in the air and cold rain, and that’s a real shame as I’m taking some very important clients out for a day’s sailing. The sun never shines on the righteous! Not only will they get cold and wet, but will have to listen to me blather on all day..

Is the changing of the seasons the theme for the coming week? Could be. Step back and look past the noise, and the global picture is all about long-term change.

China is in a more difficult position. Attitudes against it are polarising. Trump picked his moment to declare a trade war – just a time when poorly managed debt diplomacy was exposing the inequity of China’s plans to create its own global trade ecosystem. The fact China is now perceived as a global power makes it easier for the US to contain them – it’s not some poor third world nation they are looking to corral! The next few years will be as much about how China is increasingly contained, as about slowing growth. What the US really wants now is a Great Wall of China to keep them in as trade war morphs to cold-war.

China isn’t going to suffer and economic collapse on US tariffs, but it is sub-optimal and likely to push China growth lower earlier than the party strategists hoped, reducing the likelihood the nation can get rich before it gets old. The implications of a slowing China will be felt across whole globe. If China isn’t growing 6%, then that’s going to slow global growth. It will be felt most obviously in nations like Australia and other primary suppliers, but also elsewhere.

Webmaster's Commentary: 

This is perhaps one of the most "bullish" stances I have seen on the US/China trade war; I do, however, hope and pray that such a trade war doesn't devolve into a shooting war, as that would be utterly catastrophic for both countries, and the world.