A Deep Dive Into Sino-American Trade

China Increasingly Views Trump’s America as an Empire in Decline

When President Trump visited China in late 2017, Xi Jinping welcomed him with a grand display of Chinese history and culture: a four-hour private tour of the Forbidden City culminating in a performance by the Peking Opera.

Eight years, a pandemic and two trade wars later, Mr. Trump is returning to Beijing, where the theme of future dominance, not ancient majesty, has filled domestic and international headlines with articles about dancing robots, drone swarms and the quiet hum of electric vehicles.

China increasingly casts itself not as a fading civilization trying to catch up to the West but as a superpower poised to surpass it. Chinese nationalists and state-linked commentators say they have Mr. Trump to thank. America under his rule, they say, validates Mr. Xi’s worldview centered on “the rise of the East and decline of the West.”

For decades, many Chinese viewed the United States with a mix of admiration, envy and resentment. America represented wealth, technological sophistication and institutional confidence. Even critics of Washington who reviled the American system often assumed that it worked.

Mr. Trump’s ascent and his volatile second term shattered that image.

In January, a nationalistic Beijing think tank affiliated with Renmin University published a triumphant report about Mr. Trump’s first year back in office. The report argued that his tariffs, attacks on allies, anti-immigration policies and assaults on the American political establishment had inadvertently strengthened China while weakening the United States. Its title: “Thank Trump.”

The report called Mr. Trump an “accelerator of American political decay,” with the United States sliding toward polarization, institutional dysfunction and even “Latin American-style instability.” His hostility toward China, the authors argued, was a “reverse booster” that unified the country and helped bring about its strategic self-reliance.

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Trump's War is Dangerously Depleting US Military Weapons and Ordinance

Since the Iran war began in late February, the United States has burned through around 1,100 of its long-range stealth cruise missiles built for a war with China, close to the total number remaining in the U.S. stockpile. The military has fired off more than 1,000 Tomahawk cruise missiles, roughly 10 times the number it currently buys each year.

The Pentagon used more than 1,200 Patriot interceptor missiles in the war, at more than $4 million a pop, and more than 1,000 Precision Strike and ATACMS ground-based missiles, leaving inventories worrisomely low, according to internal Defense Department estimates and congressional officials.

The Iran war has significantly drained much of the U.S. military’s global supply of munitions, and forced the Pentagon to rush bombs, missiles and other hardware to the Middle East from commands in Asia and Europe. The drawdowns have left these regional commands less ready to confront potential adversaries like Russia and China, and it has forced the United States to find ways to scale up production to address the depletions, Trump administration and congressional officials say.

The conflict has also underscored the Pentagon’s overreliance on excessively expensive missiles and munitions, especially air-defense interceptors, as well as concerns about whether the defense industry can develop cheaper arms, especially attack drones, far more quickly.

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Trump and Clausewitz vs Thomas Aquinas and the Post 1945 World Order

“War,” the Prussian military thinker Carl von Clausewitz wrote, “is a mere continuation of policy by other means.” If there is one line that virtually every Army officer learns from Clausewitz’s posthumously published 1832 book, “On War,” it’s that description of the purpose of armed conflict.

Those words were among the first that popped into my head when I woke up Saturday morning to the news that the American military had attacked Venezuela; seized its dictator, Nicolás Maduro; and brought him to the United States to face criminal charges.

The reason those words occurred to me was simple: The attack on Venezuela harks back to a different time, before the 19th-century world order unraveled, before two catastrophic world wars and before the creation of international legal and diplomatic structures designed to stop nations from doing exactly what the United States just did.

One of the most important questions any nation must decide is when — and how — to wage war. It’s a mistake, incidentally, to view Clausewitz as an amoral warmonger. He wasn’t inventing the notion he describes; he was describing the world as it was. His statement is a pithy explanation of how sovereign states have viewed warfare for much of human history.

When a strong state operates under the principle that war is just another extension of policy, it is tempted to operate a bit like a mob boss. Every interaction with a weaker nation is tinged in some way with the threat of force: Nice little country you have there — shame if something happened to it.

This is not fanciful. In a telephone conversation with The Atlantic’s Michael Scherer, President Trump threatened Venezuela’s new leader, Delcy Rodríguez, who served as Maduro’s vice president. “If she doesn’t do what’s right,” Trump said, “she is going to pay a very big price, probably bigger than Maduro.”

Diplomacy and economic pressure are almost always still a first resort for powerful nations, but if they fail to achieve the intended results, well, you can watch footage from the American strike in Venezuela to know what can happen next.

But the Clausewitzian view isn’t the only option for nations and their leaders. There is a better model for international affairs, one that acknowledges the existence of evil and the reality of national interests but also draws lines designed to preserve peace and human life.

Carl von Clausewitz, meet Thomas Aquinas.

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NY Times: US Military Superiority is Declining Dangerously

President Xi Jinping of China has ordered his armed forces to be ready to seize Taiwan by 2027. Though the United States maintains a policy of strategic ambiguity on how it would respond to an invasion, Republican and Democratic presidents alike have said that America would defend the island nation. The Pentagon has produced a classified, multiyear assessment that shows how such a conflict would play out: the Overmatch brief.

The report is a comprehensive review of U.S. military power prepared by the Pentagon’s Office of Net Assessment and delivered most recently to top White House officials in the last year. It catalogs China’s ability to destroy American fighter planes, large ships and satellites, and identifies the U.S. military’s supply chain choke points. Its details have not been previously reported.

The picture it paints is consistent and disturbing. Pete Hegseth, the secretary of defense, said last November that in the Pentagon’s war games against China, “we lose every time.” When a senior Biden national security official received the Overmatch brief in 2021, he turned pale as he realized that “every trick we had up our sleeve, the Chinese had redundancy after redundancy,” according to one official who was present.

The assessment shows something more worrying than the potential outcome of a war over Taiwan. It shows the Pentagon’s overreliance on expensive, vulnerable weapons as adversaries field cheap, technologically advanced ones. And it traces a decades-long decline in America’s ability to win a long war with a major power.

War games can be wrong; analysts sometimes overstate adversaries’ abilities. Yet this larger point should not be ignored. Nearly four decades after victory in the Cold War, the U.S. military is ill prepared for today’s global threats and revolutionary technologies.

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You know you are in trouble when even the NY Times is sounding the alarm over national defense.

US-China Summit: Tactical draw (strategic win for China?)

When Donald Trump launched his trade war against China in April, threatening tariffs as high as 145%, the Chinese government said it would never bow to blackmail and vowed to “fight to the end”.

The question now is whether the consensus reached between Trump and Xi Jinping in Busan, South Korea, on Thursday means that the fight really has come to an end, and if so on whose terms.

Trump rated it as a 12 out of 10 meeting.

Both sides have taken some of their biggest guns off the table, but this appears closer to a truce than a durable peace setting stable boundaries for China’s relations with the US. Nevertheless the outline of a broader long-term diplomatic relationship is visible, with announced reciprocal visits by each leader within a year. That is very different to what China hawks in Congress were hoping when Trump came to power, and will set alarm bells off on both sides of the aisle.

One of the difficulties has been that Trump’s strategic objectives in launching the trade war were not articulated – the balance between protecting traditional US manufacturing, ring-fencing modern technology-based industries critical to US national security, punishing Chinese trade practices, or more broadly generally overpowering China as a competitive threat, were fudged. Gradually the battle morphed in some US administration minds from a trade war into a geopolitical trial of strength between the two world’s superpowers, a trial that left the whole world awaiting its outcome.

As a result it has been a turbulent six months, involving undulating tariffs, export curbs, threats, counter-threats, deferral and monopolies inquiries, interspersed with five rounds of trade talks ranging though Madrid, London, Geneva, Stockholm and Kuala Lumpur, culminating in two hours of direct talks between Trump and Xi, the first meeting between the two men since 2019.

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China's navy is the world's largest and expanding at breakneck speed

...Suoyuwan park in Dalian, which juts out of north-eastern China into the Yellow Sea, has stunning views of one of China's largest shipyards, and is a place to gather and be merry.

But to White House analysts thousands of miles away in Washington, this cradle of Chinese shipbuilding is part of a growing threat.

In the last two decades, China has ramped up investment in shipbuilding. And that has paid off: more than 60% of the world's orders this year have gone to Chinese shipyards. Put simply, China is building more ships than any other country because it can do it faster than anyone else.

"The scale is extraordinary… in many ways eye-watering," says Nick Childs, a maritime expert with the London-based International Institute for Strategic Studies. "The Chinese shipbuilding capacity is something like 200 times overall that of the United States."

That commanding lead also applies to its navy. The Chinese Communist Party now has the world's largest, operating 234 warships compared to the US Navy's 219.

China's explosive rise has been fuelled by the sea. The world's second-largest economy is home to seven of the world's 10 busiest ports, which are critical to global supply routes. And its coastal cities are thriving because of trade.

As Beijing's ambitions have grown, so has its arsenal of ships - and its confidence to stake a louder claim in the South China Sea and beyond.

President Xi Jinping's China certainly wants to rule the waves. Whether it will is the question.

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Largely overlooked in this otherwise good story is the fact that China's navy is concentrated in the Western Pacific. The US Navy is spread all over the world. 

A Photographic Tour of 19th Century Colonial Hong Kong

Ambrose Evans-Pritchard: Trump has dropped a big, beautiful bomb on America’s economy

China’s leaders must be wondering whether they are hallucinating or whether America’s political class really has lost its mind, committing economic and geopolitical self-harm on a breathtaking scale.

Donald Trump’s “big beautiful bill” marks a wholesale retreat from swaths of advanced manufacturing and energy technology. It abandons a central front of the Sino-American superpower contest without a fight.

“Utterly insane and destructive. The bill will cause immense strategic harm to our country,” said Elon Musk, now the arch-apostate, perhaps soon to be punished, asset-stripped and deported.

The big bill is the latest in a series of Luddite measures that let China run away with the electro-tech revolution and much of the future global market for cars, trucks, short-haul aviation, home heating and cooling, smart grids, power storage and the products that deliver the cheapest energy ever known to man.

The think tank Ember says China is electrifying its economy at a rate of 10 percentage points a decade. It has already surpassed 30pc of final energy, well on its way to becoming the world’s first electro-superpower.

America has been stuck in the low 20s since 2008, lulled into complacency by its fracking boom. Europe has missed the boat too, without the same excuse. It talks big on electrons without delivering much, while clinging to imported molecules for its economic existence, failing to compete successfully on either.

The woke and the anti-woke are still arguing about renewables but we are past that developmental phase. The big trillions are going to be made in the ways we use electricity. The International Energy Agency thinks the vast electro-tech market will be eight times larger than renewables by 2035.

Trump’s America is betting that it can freeze time and stop this, doubling down on fossils and hoping to force others to go with them as a condition for military protection and market access. Trump is linking trade deals with Japan, South Korea and Europe to increased imports of US liquefied natural gas (LNG). He is even demanding that the EU changes its law and embraces the joy of methane emissions.

China is betting that you cannot halt a technological steamroller or force the world to act against its own economic self-interest.

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Trump Launches Trade War with China, Mexico & Canada (JP Morgan Chase Stockpiles Gold)

President Donald Trump has signed tariffs on goods coming into the U.S. from Canada, Mexico and China, the White House said Saturday, raising the risk of a trade war with America’s closest trading partners and threatening to drive up prices on everything from cars to avocados.

It is unclear when the tariffs will take effect.

Canadian energy products would have a lower tariff rate of 10%.

Trump said he was imposing the tariffs because he claimed the countries were allowing fentanyl to come into the U.S. More than 107,000 people died from drug overdose in 2023, with nearly 70% of those deaths from opioids, including fentanyl. Trump also said the tariffs were in response to a trade deficit between the U.S. and the three countries because the U.S. imports more from them than it exports.

Economists across the political spectrum expect tariffs to increase what consumers pay for a range of goods, including vehicles, electronics, produce and lumber. Tariffs are paid by companies importing goods into the U.S., similar to a tax.

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Meanwhile, JP Morgan Chase is airlifting $4 billion in gold bullion to its New York vaults.

Russia and China Are Sabotaging Undersea Power and Communication Cables

Russia’s connection to the rupture of an undersea cable between Finland and Estonia is raising a new bevy of fears over the sabotage of critical power lines.

The new incidents come as tensions between the West and Russia and China have risen over the war in Ukraine, and as the world braces for a shift in U.S. leadership as President-elect Trump prepares to take office. 

The Estlink-2 power cable between Finland and Estonia was allegedly cut on Christmas by a Cook Island-flagged ship called Eagle S. Western officials claim the ship is part of a vast Russian shadow fleet working to circumvent western sanctions. 

The incident adds to a larger problem related to the security of undersea infrastructure, as China has also been accused of three incidents since 2023 that have disrupted power lines in European waters.

Dozens of cables are ruptured each year, usually accidentally, and it’s unclear if the latest events were intentional. Still, European leaders are sounding the alarm. 

“Recent Baltic Sea sabotage attempts are not isolated incidents; they form a deliberate pattern aimed at damaging our digital and energy infrastructure,” said European Union foreign policy head Kaja Kallas in an interview with German newspaper Welt.

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China is fortifying itself against future sanctions

China is dumping US treasuries and buying Gold

China is arming fast and becoming more aggressive

China using ‘boiling frog’ strategy to mask rising aggression in Pacific, says US commander 

China's military spending concerning given 'failing economy', US admiral says

FBI issues sober warning on Chinese cyberwarfare capabilities

FBI Director Christopher Wray on Wednesday warned that Chinese hackers are preparing to “wreak havoc and cause real-world harm” to the US.

“China’s hackers are positioning on American infrastructure in preparation to wreak havoc and cause real-world harm to American citizens and communities, if or when China decides the time has come to strike,” Wray told the House Select Committee on the Chinese Communist Party.

Though cyber officials have long sounded the alarm about China’s offensive cyber capabilities, Wray’s dramatic public warning underlines the huge level of concern at the top of the US government about the threat Chinese hackers pose to critical infrastructure nationwide. The head of the National Security Agency and other senior US officials are also testifying on Chinese cyber activity in front of the panel Wednesday.

PRC hackers, Wray said, are targeting things like water treatment plants, electrical infrastructure and oil and natural gas pipelines, Wray said. “our water treatment plants, our electrical grid, our oil and natural gas pipelines, our transportation systems.

The Chinese hackers are working “to find and prepare to destroy or degrade the civilian critical infrastructure that keeps us safe and prosperous,” Wray said. “And let’s be clear: Cyber threats to our critical infrastructure represent real world threats to our physical safety.”

The Chinese government has previously denied allegations of hacking efforts.

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China Continues Aggressive Militarization of South China Sea Alarming Neighbors

...The world’s most brazen maritime militarization is gaining muscle in waters through which one-third of global ocean trade passes. Here, on underwater reefs that are known as the Dangerous Ground, the Chinese People’s Liberation Army, or P.L.A., has fortified an archipelago of forward operating bases that have branded these waters as China’s despite having no international legal grounding. China’s coast guard, navy and a fleet of fishing trawlers harnessed into a militia are confronting other vessels, civilian and military alike.

The mounting Chinese military presence in waters that were long dominated by the U.S. fleet is sharpening the possibility of a showdown between superpowers at a moment when relations between them have greatly worsened. And as Beijing challenges a Western-driven security order that stood for nearly eight decades, regional countries are increasingly questioning the strength of the American commitment to the Pacific.

While the United States makes no territorial claims to the South China Sea, it maintains defense pacts with Asian partners, including the Philippines, that could compel American soldiers to these waters. Just as anxiety over nearby Taiwan has focused attention on the deteriorating relations between Washington and Beijing, the South China Sea provides yet another stage for a contest in which neither side wants to betray weakness. Complicating matters, Chinese diplomats and military officers are engaging less at a time when open communication could help defuse tensions.

China’s arming of the South China Sea has also forced Southeast Asian fishermen — from nations like the Philippines that Chinese diplomats have referred to as “small countries” — to abandon the fishing grounds they have depended on for generations. It is putting tremendous pressure on those governments.

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Two on China

With eyes on Taiwan, new China ban shows the U.S. may be learning lessons from mistakes with Russia

China’s Military, ‘Chasing the Dream,’ Probes Taiwan’s Defenses

The Russian vision of a world order based on force, could backfire.

Ukraine’s resistance to Putin’s invasion has demolished the idea of Russian invincibility. Everyone knows Russia is not the unbeatable empire Moscow was at pains to portray itself as both outwardly and inwardly. And just as Russia is trying to claim Ukraine as its own, other countries are eyeing chunks of Russian land, spotting an opportunity as the war shows just how weak the Russian army is. Nations within Russia are waiting for the right time to oust the bully. The Kremlin should be wary of promoting a world where it is acceptable to seize territories through force; it only invites others to join in and claim parts of Russia for themselves.

Japan was the first country to break its silence after the full-scale invasion of Ukraine last year. Tokyo said of the Kuril Islands that it was “completely unacceptable that the Northern Territories have yet to be returned since the Soviet Union’s illegal occupation of them 77 years ago”. That annexation saw the expulsion of Japanese people from the southern islands, and since then, the countries have failed to reach a compromise. Talks broke down when Putin showed he was not willing to share lands but only to gain new ones. 

Then China started drawing maps marking part of Siberia and the Russian Far East region as originally Chinese. Great areas of Chinese land were annexed by Russia in the 19th century. Unable to claim this territory back in a peaceful way, Beijing has pursued economic expansion around Baikal and has been actively purchasing and leasing lands near the border. 

In Poland, there are narratives suggesting that Russia occupied the Kaliningrad region in 1945, and that Warsaw has the right to claim it. Turkey, Azerbaijan, Kazakhstan, and even Ukraine could also stake interests in vying for Russian lands. Russian fighters infiltrating the Belgorod region under the Ukrainian flag served as a reminder to Putin that others could also reclaim their “primordial territories”. Kyiv aims to restore its 1991 borders and end the war. Yet the prospect of exiled Russians on tanks turning Russian border regions into “national republics” is seen as a welcomed payback for Moscow’s deeds in the Donbas.

As Moscow pursues the expansion of its European borders, national autonomies in Russia and their exiled leaders envision the decolonization of Russia, dreaming of dividing it into 34 independent states. For now, national liberation movements are absent due to oppression and persecution within Russia. When the Soviet Union fell apart, several regions of Russia declared their state sovereignty but were silenced. These regions have constitutions stating their sovereignty as separate states, with power-sharing treaties governing their relationship with Moscow. These norms are “dormant”, but they can be activated as soon as the regime demonstrates its inability to keep the empire under control. 

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Macron, France, and the long shadow of Édouard Daladier

French President Emmanuel Macron once again is impetuously chasing national and personal glory in the capitals of autocracies. First, he repeatedly tried appeasing Vladimir Putin at Kyiv’s territorial expense, before and after the start of the Russian president’s “special military operation” in Ukraine. Now, having failed to persuade Putin, Macron appears to be attempting to do the same by cozying up to Chinese President Xi Jinping to the detriment of Kyiv and its Western allies, including the national security of the United States.

As former U.S. Rep. Adam Kinzinger (R-Ill.) caustically posted on his Twitter feed on Sunday, “Why is this always the French?” Why indeed? And, why now, in the face of Moscow and Beijing’s assault on the international order, as it has existed since the end of World War II, is Macron willing to play into Russia and China’s autocratic “multipolar world” designs at the expense of global democracy?

Macron’s pursuit of his vision of European “strategic autonomy” is nothing new. Neither are his repeated failures to pull it off. For all his ambition, he keeps misreading the room, particularly when it involves Ukraine. “New NATO,” Poland especially, wants nothing to do with his grandiose concept of a France-led European “strategic autonomy.” Warsaw painfully still remembers Paris’s failed pre-World War II security guarantees.

When war broke out on Sept. 1, 1939, after Nazi Germany invaded Poland, France — despite its guarantee to march on Germany — “merely advanced five miles into the German Saarland,” where it “stopped and stayed stopped.” Poland, after the war’s end, found itself on the inside looking out at the West. Warsaw’s reward for believing in France? Decades of brutal Soviet domination.

Yet, despite repeated rejection by NATO, Macron persists. On Sunday, while aboard Cotam Unité — France’s Airbus A330 version of Air Force One — returning to Paris from a three-day state visit to China, Macron’s never-ending machinations to establish France as a “third superpower” at Europe’s expense, took a far darker and divisive turn. The French president acerbically called for Europe to cease being “America’s followers,” lest the continent get “caught up in crises that are not ours.”

Recklessly, Macron also asserted that “Europe should not follow U.S. policy over Taiwan,”  despite Taipei being increasingly under the threat of a Chinese invasion. Macron’s comments came on the heels of Taiwanese President Tsai Ing-wen’s visit to the U.S., where she met with House Speaker Kevin McCarthy (R-Calif.) at the Ronald Reagan Presidential Library and received the Hudson Institute’s Global Leadership Award. Beijing, in response, sanctioned the hosts of both events.

Macron’s self-defeating journey into the darkness of Xi’s world and oft-repeated attempts of autocratic appeasement for vainglory is evocative of James Tyrone, the lead character in Eugene O’Neill’s 1956 play, “Long Day’s Journey Into Night.” Macron, like Tyrone, is a “vain actor,” seeking ever-elusive success and international standing at the expense of his NATO family. Like Tyrone ignoring his wife Mary’s drug addiction, Macron remains oblivious to that which he wishes not to see, including Putin and Xi’s addiction to autocracy on a global scale.

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Expert’s warning to US Navy on China: Bigger fleet almost always wins

As China continues to grow what is already the world’s largest navy, a professor at the US Naval War College has a warning for American military planners: In naval warfare, the bigger fleet almost always wins.

Pentagon leaders have identified China as the US military’s “pacing threat.” But fleet size numbers show that the US military can’t keep pace with China’s naval growth.

The People’s Liberation Army Navy (PLAN) surpassed the US Navy in fleet size sometime around 2020 and now has around 340 warships, according to the Pentagon’s 2022 China Military Power Report, released in November. China’s fleet is expected to grow to 400 ships in the next two years, the report says.

Meanwhile, the US fleet sits under 300 ships, and the Pentagon’s goal is to have 350 manned ships, still well behind China, by 2045, according to the US Navy’s Navigation Plan 2022 released last summer.

So to compete, US military leaders are counting on technology.

That same document says, “the world is entering a new age of warfare, one in which the integration of technology, concepts, partners, and systems — more than fleet size alone — will determine victory in conflict.”

Not so fast, says Sam Tangredi, the Leidos Chair of Future Warfare Studies at the US Naval War College.

If history is any lesson, China’s numerical advantage is likely to lead to defeat for the US Navy in any war with China, according to Tangredi’s research, presented in the January issue of the US Naval Institute’s Proceedings magazine.

Tangredi, a former US Navy captain, looked at 28 naval wars, from the Greco-Persian Wars of 500 BC, through recent Cold War proxy conflicts and interventions. He found in only three instances did superior technology defeat bigger numbers.

“All other wars were won by superior numbers or, when between equal forces, superior strategy, or admiralship,” Tangredi wrote. “Often all three qualities act together, because operating a large fleet generally facilitates more extensive training and is often an indicator that leaders are concerned with strategic requirements,” Tangredi wrote.

The three outliers – wars from the 11th, 16th and 19th centuries – aren’t likely familiar to all but the most ardent of scholars, but others that show where numbers beat technology certainly are.

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The Big One is Coming and the US Military Isn't Ready

Russia’s invasion of Ukraine revealed the fading power of America’s military deterrent, a fact that too few of our leaders seem willing to admit in public. So it is encouraging to hear a senior flag officer acknowledge the danger in a way that we hope is the start of a campaign to educate the American public.

“This Ukraine crisis that we’re in right now, this is just the warmup,” Navy Admiral Charles Richard, commander of U.S. Strategic Command, said this week at a conference. “The big one is coming. And it isn’t going to be very long before we’re going to get tested in ways that we haven’t been tested” for “a long time.”

How bad is it? Well, the admiral said, “As I assess our level of deterrence against China, the ship is slowly sinking. It is sinking slowly, but it is sinking, as fundamentally they are putting capability in the field faster than we are.” Sinking slowly is hardly a consolation. As “those curves keep going,” it won’t matter “how good our commanders are, or how good our horses are—we’re not going to have enough of them. And that is a very near-term problem.”

Note that modifier “near-term.” This is a more urgent vulnerability than most of the political class cares to recognize.

Adm. Richard noted that America retains an advantage in submarines—“maybe the only true asymmetric advantage we still have”—but even that may erode unless America picks up the pace “getting our maintenance problems fixed, getting new construction going.” Building three Virginia-class fast-attack submarines a year would be a good place to start.

The news last year that China tested a hypersonic missile that flew around the world and landed at home should have raised more alarms than it did. It means China can put any U.S. city or facility at risk and perhaps without being detected. The fact that the test took the U.S. by surprise and that it surpassed America’s hypersonic capabilities makes it worse. How we lost the hypersonic race to China and Russia deserves hearings in Congress.

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