As U.S. negotiators head to China for trade talks, President Trump says he doesn’t care if we don’t get a deal.
He shouldn’t. His tariffs are having their desired impact.
More than 50 major companies, from Apple to Nintendo to Samsung, have moved or have plans to move production out of China.
The CEO of Sharp’s PC unit explains the thinking behind the rush for the exits: “We need permanent measures to avoid the risk of tariffs and be eligible for U.S. government procurement.”
The United States has temporarily held off on imposing the last round of proposed tariffs, but that hasn’t reassured certainty-craving businesses. “We cannot tell what will happen or when,” Sharp’s astute executive observed.
Exports from China to the United States are down 12 percent compared to last year and Chinese factory workers are working fewer hours.
China has absorbed the cost of the tariffs, devaluing its currency and cutting prices to avoid losing customers to the competition—five of China’s top 10 exports to the U.S. are also available from Mexico.
While China’s economic growth is at a 27-year low, America’s economy is running strong. Unemployment is at historic lows, wages are rising and inflation is nonexistent at both the wholesale and consumer level.
This defies the predictions of “mainstream” economists who spend more time looking at textbooks than at what’s happening in the world around them.
But another study determined that making the 25 percent tariffs on China permanent—giving businesses “certainty”—would create 1 million jobs in the United States.
That makes sense. Recall that after the United States removed tariffs in 2000, American corporations moved their U.S. supply chains to mainland China.
With China stumbling and America chugging along nicely, with all this winning, you’d expect universal cheers from the grandstands.
Indeed, farmers, ranchers and blue-collar workers support President Trump for taking on China’s economic aggression, something they believe the U.S. government should have done a long time ago.
But two influential players in the U.S. are not just withholding their cheers, they are, for all intents and purposes, taking China’s side.
These two agents of influence are Wall Street and the corporate media.
Why are they on China’s side?
With Wall Street, you need to follow the money.
Start in Lower Manhattan, where big banks and brokerage houses earn billions from listing Chinese companies on the American stock exchanges. Those companies have a total market capitalization of $1.3 trillion.
Exchange-traded funds, such as MSCI, the largest index fund in the world, are invested heavily in domestic Chinese companies listed on the Hong Kong and Shanghai stock markets.
One of those Chinese companies is Hikvision, supplier of surveillance technology to China’s concentration camps. The California State Teachers’ pension fund and the New York State Teachers’ pension fund are invested in MSCI—and therefore in Hikvision.
Morgan Stanley’s private equity funds have been burned numerous times by their Chinese investments, most notably with Tianhe Chemicals, a Chinese industrial firm accused of bilking investors out of $650 billion.
While American investors may unwittingly have their money tied up in Chinese companies, American regulators aren’t allowed to look at their books; Beijing regards them as “state secrets.” U.S. Senator Marco Rubio (R-Fla.) has introduced legislation to delist companies from American exchanges that fail to meet our accounting and disclosure requirements.
As far as Wall Street is concerned, it doesn’t matter whether these Chinese investments make or lose money—the banks make money in the transaction fees.
For these reasons and others, as Peter Thiel explained at the National Conservatism Conference earlier this month, the interests of the money center banks are antithetical to America’s national interest when it comes to China.
Now let’s look at the corporate media. Beijing has found willing partners in the anti-Trump U.S. media, including marquee names such as the New York Times and the Washington Post.
Coincidentally, Amazon founder Jeff Bezos owns the Post. The world’s richest man made his fortune selling stuff made in China and imported tax-free into the United States. Bezos has a vested interest in the one-way trade with China that has destroyed millions of Americans jobs.
The Washington Post recently published an op-ed “China is winning the ideological battle with the U.S.” that repeats the talking points Chinese propagandists have been making for decades that its authoritarian model is more appealing than Western democracy.
If that’s not bad enough, the Post this month ran an open letter to President Trump titled “China is not an enemy,” signed by the policymaker geniuses who created the China Frankenstein monster. (American Greatness recently published a rejoinder.)
The authors say, “We do not believe Beijing is an economic enemy or an existential national security threat that must be confronted.” Need we say more? Xi Xinping or Joe Biden could not have said it better.
The New York Times, for its part, doesn’t rely on the opinion pages to make the same point. It ran a piece in its news columns under the headline, “A New Red Scare is Reshaping Washington.”
The term “red scare” is, of course, a loaded term with pejorative connotations evoking the Palmer raids, Joe McCarthy, and blacklists. (All of which, by the way, were grounded in more than paranoia, contrary to the standard liberal version of history.)
This conceit, this inference of groundless paranoia, permeates the story.
We are told of “growing concerns” that the Trump Administration is “fueling discrimination against students, scientists and companies with ties to China,” creating a “climate of fear” and “stoking a new red scare.”
We are told “the United States is at risk of being gripped by ‘an anti-Chinese version of the Red Scare,’” that “Chinese Americans feel targeted,” and “that’s really hurtful.”
We are led to believe it’s because of “Fox News hosts and others” that “skepticism has seeped into nearly every aspect of China’s interaction with the United States, with officials questioning China’s presence on American stock markets, its construction of American subway cars and its purchase of social media networks.”
Politico, an ever-reliable barometer of conventional Establishment thinking, is more explicit, telling us “people of Chinese descent, including U.S. citizens, could face discrimination,” especially now “when there’s so much racism, so much anti-immigration sentiment.”
It’s no exaggeration to say these “red scare” scares are a regurgitation of the Chinese Communist party line.
We know that because Global Times, the official mouthpiece of the CCP, helpfully informs us the Trump Administration’s China policy revives “anti-communist hysteria of neo-McCarthyism, which has echoes of the Cold War,” and “reflects populism, nationalism, and even racism.”
“Political opinion warfare” is part of the influence operations Beijing uses to shape public opinion and influence foreign decision-makers, consistent with classic Chinese military strategy: “The supreme art of war is to subdue the enemy without fighting.”
And so we see Beijing’s Confucius Institutes spread the Chinese Communist Party’s worldview on American campuses and its United Front department mobilize overseas Chinese to support friendly politicians and official CCP narratives.
Beijing tells U.S. corporations to lobby Washington on its behalf and uses U.S. corporate media to spread its propaganda talking points. Talk about interfering in our political process! Somebody call Adam Schiff!
Photo Credit: Ezra Acayan/Getty Images