The Duran Podcast - Tariff war risks turning into hot war

Episode Date: April 14, 2025

Tariff war risks turning into hot war

All right, Alexander, let's talk about the tariff war between the United States and China. What is the update on the tariff war? We have some exemptions on electronics. The 20% tariff on China with regards to electronics is staying. It remains, but the other 120 or 30% on top of the 20%. That's been exempt. We're talking laptops and mobile devices and stuff like that. And China saw this as a positive small step.

That's what they said. It's a small step, but it's in the right direction. But Trump is saying that they're going to now examine semiconductors and that there were no real concessions made to China. He's, at least in his truth social post, he seems to be doubling down on the the tariffs with China. Of course, this is what Trump says. The actions speak differently as to where we're heading.

Your thoughts on Trump and China, perhaps some negotiations, maybe something along the lines of bilateral talks in the next couple of months. Or are we heading towards a big tariff war? And who knows where else after that? Well, I think your last point is where. I'm actually starting to have concerns because there are two ways of approaching this whole tariff question. The one is the one that Trump has used and which he has spoken about to his core constituencies in the industrial communities, which is to protect and rebuild American

industrial power, American manufacturing, to bring back manufacturing to the United States. to change the economy of the United States to recalibrate it back into something more like what it used to be in the mid-20th century before the processes of globalization really began to take off in a big way in the 1980s. So that is the line that I thought he was following. But increasingly, it seems to me that we are moving. into a completely different situation in the sense that we still do have tariffs on most of the world and they're 10% tariffs and we have tariffs to protect individual industries

like automobiles, aluminium, other industries as well. But there is now another side to this which is looking more and more like an outright economic war between China and the United States and a specific policy of not just increasing tariffs on China, but increasing tariffs to the level that it looks like it's an economic blockade that is being imposed on Chinese goods entering the United States. And of course, the Chinese are responding in kind. Now, on Friday, Trump had to relax some of these 145% tariffs that he imposed on goods, the bulk of which arrive in the United States from China. And these were things like, you know, smartphones and computer equipment and those kind of things. And I think there were two reasons why he did that.

Firstly, because there was, again, signs of stress in the US Treasury's market. And I think that Trump is clearly very sensitive to a situation where the Treasury's market begins to get out of control. The other, which is perhaps more long term, but I still think it's important for him, is that he's worried that in the immediate term, there is no replacement for these items from other countries or from domestic production. He doesn't want to have obvious consumer good shortages in the United States. He doesn't want to see inflation spike with the cost of these items starting to grow.

And so anyway, over the weekend, he gave this exemption for these goods, which with, you know, the tariffs brought back to the 20% level that he's, imposed on China before. But then over the course of the weekend and this morning, we're getting more statements, not just from Trump, but from other people in the administration, some of them going a lot further than Trump is, which talk again about the United States taking a very tough line with China. And sometimes I do get the sense, but I increasingly getting the sense that for some people, maybe not for Trump himself, this is now evolving into a test of strength with China, a kind of economic war with China, basically push China back hard, try to isolate it across the global

economy, create problems domestically, internally in China, in which case this isn't really about protecting American industry and protecting American jobs and regenerating the American economy and starting a revival of industrialization and manufacturing in the United States. It becomes a geopolitical project as part of a conflict that is being waged by the United States against China. And that kind of conflict does run a very real risk of getting completely out of control. Bloomberg had an article, and you know, we're talking about Bloomberg in which they were talking about the United States and China drifting into an actual military conflict, a war with the world being invited in effect to take sides. That's a very frightening thing. And I can't believe that it is what Trump himself wants. But this whole process, it seems to me, is at serious risk now of getting out of control. Now, we are hearing positive things as well.

There are reports that there are what one US official said was soft contacts between the Chinese and the Americans. And I'm sure that is true. In other words, that there are contacts being arranged by various third parties. We can guess countries that might be acting as third parties. parties, Vietnam, Singapore, other Asian states, they might be a dialogue being prepared. It could be that eventually we're going to move towards some kind of negotiated solution to this incredible high tariffs that each country has imposed on the other. But as I said, if this is evolving into a geopolitical project, ultimately, and I have to say this, a neocon project, then Trump needs to be very, very careful.

Because to say it simply, the neocons never assess things economically in a well-grounded, factual way. They're probably underestimating China's ability to withstand this kind of shock. They're unsure overestimating the US's ability to force countries to stop trading with China. And I think they're also underestimating Chinese resolve. That is a consistent pattern of neocon conflicts. So he could very well find himself in a struggle with China, which in which the odds might, might be more in Beijing's favor than he realizes, and which, given that we're talking about neocons, and some of the people who are leading this, do sound to me almost like a kind of species

of economic neocon. Well, as we've discussed many times, in many programs, once these people launch on a project, they have no reverse gear. Yeah. What are they looking to do, though, with the tariffs? This is the part that I think everyone's confused about. The simple approach, the approach that Trump is saying, let's not say the simple approach, the straightforward goal of the tariffs, according to Trump, is to reindustrialize the United States, right? Yes. And create fair trade.

And the two entities that have ripped off the United States the most, according to Trump, is China and the European Union. But now everything is focused on on China pretty much. But then beyond everything that Trump has said, you have all these other theories about what is really going on, some sort of 5D chess that Trump is engaged in, that his team is engaged in. And then on the other side, you have the analysts who say Trump has no idea what's going on. And he's in way over his head. And then, of course, you have what you've been describing, which is that this is really all about. just getting to a hot war with China. What is the goal of these tariffs? Maybe Trump needs to,

I don't know, maybe say something from the Oval Office in a prepared statement, perhaps? I don't know. Many presidents do this, right? All the presidents have done this. Whenever you're entering into these types of difficult situations, they usually give a speech to the American people to explain what they're up to. What do you think? Which he hasn't actually done and which I think he should have done actually because he hasn't really explained his policy very well and very clearly. Now, you have to go back to what Trump has been talking about in his campaign across his life, going all the way back to the 1980s. I have no doubt that Trump supports tariffs ultimately because he wants a re-industrialisation of the United States.

He's been saying this since the 1980s. He even took out about a full-page advertisement in a New York newspaper back in the 1980s, criticizing the policy of free trade and calling for the return to protection and tariffs. So this is very deep within him. He's also brought back, you know, the figure of William McKinley, who also supported tariffs and protection. And he's talked in those terms. Now, I think this is what Trump himself believes and things.

But it's absolutely clear to me that even as he says all of this, he hasn't perhaps really researched properly what the protectionist policies. that the United States was following in the 19th century and in the early 20th century were really like. Because at that time, the focus was absolutely on protecting US industry, but not at targeting individual countries. And by the way, there was a country that some people in the United States did want to target, which was, of course, prison. Britain at that time was the big exporter of manufactured goods, a little bit like China is today. People in the United States spoke about unfair competition from Britain, and there were policies to target Britain. But the protectionists

at that time said, no, that's not what we're going to do. We are going to create tariff barriers, which are designed to protect industries. And that means they have to be blanket tariffs, tariffs, a simple, straightforward tariff affecting imports from all over the world. Because if we start getting into a practice of trade wars and tariff wars against individual countries, this absolutely has the possibility of getting out of control and it will involve us in quarrels with other countries that we don't want to be involved in. So people like Henry, Clay and William McKinley and others in the 19th and early 20th centuries were opposed to reciprocal tariffs. Now, this is where I think Trump has perhaps gone wrong because somebody's come along

and has told him, well, the United States is being ripped off by the Europeans. It's being ripped off to a far bigger level by the Chinese. All sorts of countries around the world are after the United States, they're trying to rip it off too. And so we've got to impose reciprocal tariffs against any and all of them. And maybe what you can then do is you can negotiate individual deals with all of these countries, one by one, pick them off, one after the other, and then you'll get the optimal situation that you want. Now, I think that that is a policy that is not going to work. It is overcomplicated. It also sets the United States in conflict with too many countries around the world and trying to negotiate too many trade deals at once. And inevitably, it drifts into

a full confrontation with one state, which is by far and away the biggest exporter of goods to the United States, which is, of course, China. What he should have done and what the 19th century and early 20th century protectionists would have advised him to do is to have one flat, straight tariff, say 10%, or even higher, if that's what you think, plus specific tariffs to protect individual industries, like the automobile industry that has to be put. Pitch to hire, something of that kind. In other words, you look at your domestic industries and don't worry about what the rest of the world is doing.

That was the attitude, the approach that they took. Now, that's where I think a lot of the confusion is coming from, because Trump, I think, is focused on protecting American industry. But as I said, somebody has sold him with this idea of reciprocal tariffs, and that is getting out of control. And as I said, it is evolving into a conflict, a confrontation with China. And all kinds of people with all kinds of geopolitical agendas are now clambering on board with this policy as well. And as I said, it is increasingly looking out of control. and of course they're coming up with all of these 5D chess and all kinds of theories about what Trump is doing,

which when you examine them carefully or have a look about them of seeking some kind of confrontation with China. And I think this is dangerous because there are very strong feelings about China in the United States. there are now increasingly strong feelings about the United States in China too. There are enormous armies and fleets being assembled on each side. And as I said, this thing, judging by this article in Bloomberg, has a risk of getting out of control. He needs to de-escalate this. For the benefit of the US economy, it's better any way that he starts to look for ways to try to get these impossible tariffs that the Chinese and the Americans have imposed on each other down.

It's overlooked that the Chinese tariffs are in some ways very damaging to parts of U.S. industry. So the oil and gas industries in the United States are now basically barred from selling oil and gas on the Chinese market. The Chinese do have alternative supplies, but that was an important export market for the US oil and gas industries. Agricultural producers, producers of soybeans are also going to be under great stress as a result of the fact that China has basically closed its doors to their exports. Again, China can find alternatives to these things. It may take them time. It will cost them money, but China is the kind of country that will do this. And most likely, anyway, they've stockpiled on these items. A long economic war with China is going to come with many, many costs for the United States.

It's very different from the kind of protectionism that the United States used to do, which always avoided getting involved in economic wars. And, of course, an economic war on this kind of. the scale has the potential to evolve into something worse. And even Bloomberg is now talking about it. Yeah, I just get the sense that the escalation with China was fabricated? I guess. I mean, Trump places this baseline, this blanket, this 10% tariff. Okay, fine. Then he gets into this country-by-country reciprocal tariff. And the markets didn't like it.

And more importantly, which I think is the important part of all of this, the bond markets didn't like it. I believe, and I think this is confirmed now, that the Trump administration was looking for a certain trajectory to the bond markets, and it went in the opposite direction. And Trump did receive pressure for. from Wall Street. He did receive pressure from the tech oligarchs,

but more importantly, he also received pressure from the bond markets. And that's what caused the 90-day pause in the reciprocal tariffs. And then something happened.

And I believe we don't know the full story yet. I get the feeling that his team, members of his team, thought it would be a good idea in order for the administration to save face, for them to put out to this explanation that this was one, one, uh,

ruse, one, one game that was being played by the Trump administration in order to, to, um, to put all the blame on, on China, to expose China. I believe Bessendeev had said as much. Yeah. that this was all an elaborate scheme to expose China to the world. And I'm just trying to figure out, expose China to what to the world? They say that China has been exposed as the bad actor. And I just can't figure out what have they done.

This is a part. I mean, I understand the U.S. argument. I understand that argument, that industry moved to China and all that. Okay, we could do a whole video on that. did industry go to China the businesses actually took it to China the U.S. businesses went to China for many reasons. But anyway, this whole exposing China

to the world narrative just doesn't make any sense to me at all. And Trump's and Trump's uniting the world against China. That's what Besson said, I believe, or someone in his administration said that said that Trump is rallying the world now against China. This is another part of the narrative that I just don't understand. It doesn't make sense to me.

So I just think that something was improvised or put together in order to explain the difficulties that they were having with the markets and especially the bond markets. And now I just get the feeling that it's moved into this whole new war between, or it's actually it snowballed into this war between Russia, between China. and the United States. And I say Russia, because a lot of this reminds me of the Russian sanctions, where the Biden administration was thinking they would get one outcome and a whole different outcome occurred.

And everyone was certain that Russia was going to crack. Everyone was certain that Russia was going to crack. And it didn't. And it didn't. Exactly. Well, that's exactly what we're looking at. Now, I think this is absolutely correct. I think your analysis is absolutely correct.

I would add one other thing to this, which was that what I think Trump himself had expected was when he started to impose tariffs on China, he expected the Chinese to come and start negotiating. And of course, what the Chinese did instead was that they imposed counter tariffs of their own. And then it became a matter of pride and face to go on raising tariffs in response to what the Chinese were doing. Now, if anybody knows China, if anybody knows Chinese history, one would have expected that that would be what would happen.

Again, if somebody told Trump that the Chinese will come around and start negotiating, simply because you brought up raised tariffs. Then, as I said, they were misinformed about China, and they misadvise the president. That is all I can say. Can I ask you a question on that before you go on? Why not just set up bilateral negotiations with China? I mean, Trump himself says that he has excellent relations with Xi Jinping. He says it all the time.

Why not just, I mean, what if the proper way have been to schedule? bilateral talks with China? And they have a good relationship, Trump and she. Well, they had a good relationship. They had. Or is another question. But I mean, I agree. Trump says it all the time.

I know. Absolutely. Absolutely. I mean, the thing that they should have done, I mean, you know, I accept that the Americans have a genuine concern about the fact that China is running this enormous trade surplus. And if we just go back to what China has been doing, China has been doing what all great powers do, which is that it has been aggressively advancing

its interests. It has been using every handle and every mechanism that it can in order to develop its own industries and its own manufacturing, and it's been doing that because it wants to become rich and powerful, which is what all great powers and all realist-led. nations do. Getting steamed up and angry about this, well, I can understand why people do that, but it's no different from what other countries do. It's no different from what the United States historically did when it became the world's leading economy. It was no different from what Britain once did. And as I said, you accept it. Now, what they needed to do, I absolutely. I absolutely,

agree, was not to get into some kind of all-out economic war with China. Trump did have good relations with Xi Jinping. They liked each other. I remember their very first meeting back in 2017, just after he was first elected president, their first meeting in Mar-a-Lago went extremely well. So the first thing you do when you become president is your rage assignment meeting with Xi Jinping. You tell Xi Jinping when you meet him, look, this situation with the trade surplus is impossible. You must know that it is. It is no longer in your interests to sustain it in the way that you have been doing. At the same time, obviously, this is an important relationship.

We don't want to completely destroy it. So let's see whether we can find a roadmap together to get to the point where that trade surplus comes down and you, for your part, can be sure that we will not take advantage of you in other ways. Now, the Chinese are very, very tough minded, extremely realistic people. They showed over the course of Trump's first term that they were prepared to negotiate. The negotiations didn't go very well. well in the end, nor because the Chinese weren't interested in negotiations, but because Trump's first term was completely sidetracked and wrecked, and Trump himself lost authority, as we both remember, because of the Russia gate hoax. Now, this time, it could have been different. And at the same time, nothing would have prevented Trump from going ahead and imposing flat tariffs, 10% tariffs on all the world, including China. He could have pitched them higher if he wanted, 15% tariffs. I'm not here, by the way, either to argue for or against tariffs,

but he could have done that too, and he could have imposed more tariffs to protect individual industries. The Chinese could have complained. This goes against the rules of the World Trade Organization. Trump would have said, so what? It would not have prevented negotiations between the Chinese and the Americans. It would have preserved a trade position and it would have advanced the interests of the United States. The Chinese would have accepted that. Instead, quite plausibly, because of what you said, because of this need to try to rationalise to explain what happened on Friday when the, well, not on Friday, when the reciprocal tariffs were cancelled on every country against China.

We got this narrative that it was all five DHS to isolate China to push China into a corner, which is, as I said, it has no basis in reality. It doesn't understand the real way in which international relations and trade is conducted. It is impossible to isolate Russia economically. It is quadruply impossible to isolate China economically, given what an enormous part of the world economy. China today is. So it's a hopeless idea. So, but that's what they said. That was the narrative that they spun. And the result is that they've landed the United States into what is increasingly looking like a geopolitical conflict with China, which, as I said, has a genuine risk of getting out of control.

I understand that many Americans have all kinds of reasons for not liking China. I may agree with some of those reasons. I may disagree with some of those reasons. But the point is not whether you like or don't like China. It is what your interests are. That is the realist position. And that is the one that Donald Trump should follow. I think the final question is how many conflicts can the U.S. take on now?

I mean, you know, things are piling on. You have the Middle East, Iran, you have Ukraine, Russia. Now you have China. And, of course, you have a domestic agenda. You have all kinds of issues inside the United States, obviously, that you need to address, you know, how much can this administration actually take on at once? Well, how much can Donald Trump take on at once? I mean, he's in train now, must be exploding.

I mean, it is, again, out of control. He's got a conflict with Ukraine, which is far from sorted. He's got a conflict with Iran, which is becoming increasingly complicated. He's got another situation in the Middle East with Israel and Gaza and all that, which is also unresolved. He's got the issues with the Europeans who are causing him huge problems, not just over Ukraine,

but other things too and who are running a media campaign against him. And as you correctly said, he's got an enormous crisis, or rather not crisis, he's got an enormous ambitious program for domestic reform in the United States where he needs to keep his team united

so that they're all working together to the same end. Now, as a result of this trade war, he's already created rifts within his own team between people like Navarro, between Navarro and Musk. Musk is coming across very angry, and this is already causing splits. And too much is being done all at the same time. And I have to say, not only is this too much for Trump, one individual is now being asked to do everything. So one day, Wickhoff is being sent to Russia to talk to Putin. The next day, he's off to Amman to talk with the Iranians. The next day, he's off to Israel to try to broker deals over Gaza.

I wouldn't be surprised if before long we see Whitkoff shuttling off to Beijing and trying to deal with Xi Jinping and his officials. Again, this is out of control. There has to be a pause. I mean, I mean, not a pause in policies, but, you know, a decision to bring all of these various conflicts under control. I would have said the best thing to do is to have a meeting in the White House, to go through all of them, to look at the priorities and to do.

decide what can be done and what can't be done and to start approaching these various different problems in a more systematic way. Ukraine, as we discussed in a recent program, actually, in some respects, is the easiest one. You just walk away. You just let the Russians do whatever they want to do and the Europeans do whatever they want to do and the Ukrainians do whatever they want to do also. So it shouldn't take up that much time. The Middle East is much, much more complicated. On tariff questions, I would say get yourself a flat tariff and tariffs to protect individual industries.

Set up proper negotiations with the Chinese. Build a proper negotiating team. Get representatives of U.S. industry. in that negotiation as well and move forward with it. The Middle East is far more complicated and far more intractable. And again, my own view for what it's worth is that the United States, the president, would have been much better advised not to have got involved in it to the extent that has been done. And I suspect that there are particularly difficult people here in the administration who feel even more viscerally strong about the Middle East than they do about

other questions. But anyway, you could prioritize, you can decide what you can do quickly and what you cannot, but you've got to get this whole thing under control. And you've got to make decision making in future in a more structured way. Yeah. The Iran issue is, I don't want to. want to say it's easy, but it's easier than, obviously, than Israel and the Palestinian issue. That's where you would need to put most of your focus. I mean, you can solve Iran as well.

Yes. Oh, you can. It's there. The roadmap is there. So you can solve Ukraine. You can, you can solve Iran. You can have Wickhoff then and the team fully dedicated to the Palestinians and to Israel and what's happening in Gaza, and that could be their focus. That could be your foreign policy agenda for the next couple of years and try to solve that. And you get to the tariffs, bilateral talk with China. Absolutely. It's going to take time. It takes time.

And as I said, that doesn't mean you can't have your own tariffs at the same time. But they mustn't be these reciprocal tariffs, which create. nothing but problems. Again, I want to stress, I'm not advocating for tariffs. I'm just explaining how I think the president can implement his policy in a way that will work and won't draw him and the United States into further problems and certainly not into an all-out confrontation with China, which I don't think serves the interests of the United States, and certainly not at this president. Yeah. And the Democrats and the Europeans, they're coming after Trump. You can see there is a big media campaign, especially coming out of Europe and the EU, which is looking to

discredit Trump. So they're coming after him. Yeah. Well, they're calling him incredible things. They're calling him. They're saying that he's the mad king, that he makes decisions from one day to the next that contradict each other. They're calling him all sorts of things, which are not just undermining his own authority, potentially in the United States as well, but which are undermining his ability to actually strike deals moving forward and to develop his relations with other countries. And this has been done entirely intentionally. And unfortunately, because he's making policy in this way, especially because somebody sold him this idea of reciprocal tariffs. Without that's explaining to him that this was something that was looked at very carefully

in the 19th century and rejected then that reciprocal tariffs is not actually a policy of protection. The two are not the same. They may look like they are, but they are in conflict with each other. So he's got to get all of that out of the way, sort it out. And of course, because of this whole issue of reciprocal tariffs and the movements backwards and forwards over that, we've had problems in the financial markets, and we've had this rhetoric from Europe and from the Democrats

that the president doesn't know what he is doing. When if you go back and read what he's been saying about protectionism, he has in fact always been consistent and in fact you do find some economic writers, even in Europe, even in Britain, the homeland of free trade, who are saying, well, you know, maybe we don't agree with Trump, maybe we don't agree with what he's doing. But he does have a point, he does have a policy. But all of that is being lost because of this cloud of confusion. because the president, the administration, are trying to do too much at one at the same time,

and they'd be given bad advice by some people. Yeah, it's too much, but it's also, I don't know, I get the impression that it's a lot of bad advice. Anyway, you know, it's bad advice and, you know, you have a lot of people who, to be honest, we'll end the video at this point, Alexander, but just one quick comment. But there's a lot of people who are in the Trump administration who don't seem to be serving any real purpose. For example, you know, you have Waltz and you have Rubio, you have Kellogg, you have all these people who are opening up more problems.

And then you have Whitkoff who is pretty much acting as the Secretary of State for the entire United States. I mean, it has nothing to do with the terrorists. I'm just saying it just seems like there's there needs to be. be a rethinking of his team and what everyone is doing. I don't know. That's just the impression that I get. Absolutely. I mean, he is playing, he's, he's actually acting as Secretary of State, but of course he doesn't have the State Department and the bureaucracy and all of that at his disposal because he's acting purely as the president's private emissary. And one individual doing all that

by himself, it's too much. Anybody can see that. I mean, Wiccoff comes across to me as charming and extremely clever and probably very well-intentioned and generally interested in solving these problems. But there is only so much one person by himself can do. He needs a team. If you can't make him Secretary of State, which is very difficult, by the way, I think is very unlikely. Well, I think Wick Goff would have problems getting confirmed. But you've got making Secretary of State, why not making National Security Advisor? The job that Henry Kissinger once had, which would give him a team of people that he can work with, he can rebuild the National Security Council and start creating, if you like,

a kind of structure and bureaucracy there, which can provide him with the throughput of ideas, and the subordinates and all of those things that would enable him to conduct this kind of alternative foreign policy, which could then become the foreign policy of the United States successfully. But, you know, I'm just throwing out ideas and suggestions. But I can see what the president, what Donald Trump is trying to do. But it's not. It's not. not being done in a way that works. And there are far too many people in his team who have different agendas from his own, just as was true, during his first term.

I mean, there are some people in the administration, to say it straightforwardly, who are neocons and hate China and would love this to evolve into an economic war between the United States and China as part of some great epic geopolitical struggle. They're less interested in what happens, you know, on the shop floors in Detroit and places like that. So, I mean, you know, there are that, there is that element there. And then there are people like Stephen Moran, his advisor, who whatever qualities he has as an economist, it seems to me as an incredibly bad advisor and has given, set out this utterly inflammatory, indeed incendiary message on the White House website in which he said, you know,

you've all got to pay for the US hegemony, you're having all these armies and fleets around the world, the US armies and fleets, and you've all got to pay to sustain the dollar. And you can do that simply by writing checks to the US. Treasury Department, making the whole United States and the whole economic policy of the President of the United States, his tariff policy, his policy of protection, look like a protection racket, which I cannot believe is what Donald Trump intended. Yeah. Well, you could cut those costs.

If Moran has a problem with all the bases and the military that people are using it, just close it down. Exactly. Get out of NATO, get those bases out of there and save the money. Save the money and spend it on the people, on the US people. Exactly. It's that simple. Probably not that simple, but I mean, that's what you do.

You don't complain about it. You shut it down. Exactly. Okay. Anyway, all right, we'll let the video there. The durad.com. We are in Rumble Odyssey, Bitschoo, Telegram, Rocket, and X. Go to the Dirat shop.

Pick up some merch like what we are wearing in this video. Update. The link is in the description box down below. Take care. Thank you.