Speaker 1: Yeah, you want to have someone in China who's a
little bit antagonistic. It really helps the United States. It
really helps the America First trade agenda if you don't
and if you don't have that, you have somebody who
you know who looks like a Western or so to speak.
Speaker 2: And you're listening to Carrie Letz's Financial Survival Network where
you get valuable information you just can't find anywhere else
to thrive in today's trying times. You need the Financial
Survival Network now more than ever. Go to Financial Survivalnetwork
dot com and get your free newsletter and gift. Financial
Survival Network now more than ever.
Speaker 3: And welcome you are listening to and watching the Financial
Survival Network. I'm your host, Carrie Letz. Well, is the
war the trade war with China? Is it winding down
or is it gearing up? Well, if you're curious, then
you're definitely going to want to hear from my next guest,
Kenneth Raposa, and you find him at Prosperous America dot org.
And ken it's great to have you back on the show. So,
trade war with China? What's the status now?
Speaker 1: Sure? Well, I like to call Trump the good cop
and bad cop all rolled into one. So if you're
trying to figure off the trade war, I think the
trade war is just hitting up. But if you are
a regular Joe who's not watching this all day long,
you would hear on Monday Trump saying We're going to
hit China with one hundred percent taffs. They're withholding rare
earth minerals from US and we need them and that's
not fair because they broke a promise and that's that.
And then Tuesday morning comes and Trump says, well, Shishinpeg
was just having a bad day all as well. We're
all friends. So you just don't know where it's going.
But from the closer look is that the United States
is in an economic battle with China. And don't think
of China as just one country. Think of China as
the economic leader of a region. And that region is
all of Asia. And that is a region that was
heavily dominated for many years by the West, by by
US multinationals, by some degree, Japanese multinationals, and South Korean multinationals.
That is going by the wayside. The Chinese companies are
no longer making Happy Meal toys and Nike shoes. They
are making their own brands, and they are competing directly
with big American tech and big American multinational corporations, whether
they're you know, the equivalent of Amazon cloud service providers,
or whether they are the guys who are making cars. Right.
For example, Europe is worried about EV's coming in from
China and the evs it just will absolutely outnumber European
evs on price alone. So it's a situation where the
United States has to convince their multinationals to invest in
the United States, and the only way to do that
is to close the door as hard as you can
and as tight as you can in on China. And
that means making China completely unattractive, and not only China,
but the countries around it, including Southeast Asia where Trump
was just visiting those four countries, so Malaysia, Cambodia, Thailand, Vietnam,
and as you notice, despite the talk of trade deals,
we still have the twenty percent tariff on all those
countries at a minimum. So and that is because we
cannot have American multinationals just setting up shop in Vietnam,
where one dollar goes a lot farther there than it
does here, and shipping goods into the United States. That's
just not that's just going to defeat the purpose. So
the battle continues, and they're trying to isolate China to
the best of their ability. We'll see if they can succeed.
Speaker 3: Yeah. So also you had the issue of them transshipping
through Vietnam and Thailand, all of that, and you know,
on the other hand, they're sharing the same hemisphere as China,
the same area, So how much can they really go
against the China, That's.
Speaker 1: Right, it's a good question. Well, yeah, and you know,
in a lot of these countries like Vietnam and maybe Malaysia,
I can't remember the top of my head, but some
of the Big four, the Old Asian Tigers, their foreign
direct investment mostly comes from China. You know, United States,
of course would be a close second, and in some
cases even number one. But China is very important to
those to those economies. There's a lot of Chinese entrepreneurs,
including expact Chinese who fled because they're not exactly enamored
with the CCP, and they have set up shop in Vietnam,
and of course Singapore is crawling with Chinese. So you know,
these are areas that I'm very entwined with China. But
the deals that came out of Southeast Asia over the
last week have basically said that, Okay, we're going to
do this with you. You know, US Americans are going to
do this deal with with you. Guys are going to
you know, buy your rare earths or partner with you
on these projects. But we're only going to do it
in so far as you'll sign any big deal with
with with the Chinese. And how long will that hold.
Trump is only president for three more years, so we
will see. It's very difficult for these countries down there
to just turn around and say in the US versus
them world of the Trump administration to say that we're
not you know, we're going to more. We want to
work with you to help isolate China. What Trump really
has to do is say to our multinationals, look, we
know you love Asia and you've loved it for a
very long time, and if it was up to you,
you'd put all your money there, but we need to
reverse that and put some of it here, because if
you don't, then the future century. Yes, it's absolutely it's
absolutely Asia and there's no stopping it, and everybody knows it.
So you had to put some sort of roadblocks up there,
and that would be the tariffs and other ways to
isolate China. And that's what the Trump administration is doing there.
They understand that China is the leader of you know,
in a multi polar polar world. China is the leader
of the other of the other group, and the United
States is the leader of the of the Western group.
And so if it's not going to but and it's
going to playcate China and just by all our multinationals
just offshore and invest there, you know, then China really
becomes a dominant force in Asia and continues to become
a dominant force in American supply chains too, to our dismay.
Actually in the years ahead.
Speaker 3: Well, uh, but China is not doing very well, now
are they. Their real estate bust factories closing up left right.
Speaker 1: Uh.
Speaker 3: They've got some seemingly very difficult problems, and those problems,
the solutions to those problems and the causes are directly
tied into the CCP, and they don't seem very uh
intent on solving them, do they.
Speaker 1: Well, I will tell you this that the CCP must
solve them, because the CCP only rules on the notion
that it can provide upward mobility to the people. And
there are more non CUCP people who are a political
Chinese than there are members of the CCP, and when
they're mad, they will rise up. We saw, of course
in the eighties and Tenement Square, and we saw it
recently during COVID with the White Paper protests. When the
Chinese people are pushed to the wall, they will rise up.
And they don't rise up often because their lives have
been improving for at least the generation. Now, if that changes,
then I expect China will see more civil unrest. All right,
But what's happening in China now with real estate is
you know, that's a domestic policy issue where a lot
of Chinese people are not really allowed to invest overseas. Right.
The Chinese stock market is really a you know, it's
really a gambling den. If you look at if you
look at like the Shanghaik seen, you see bunch of
old guys there. It looks like you're walking into Foxwood's
casino or Alagio or something like that. You know, they're
all sitting there at a table, So it's more of
a gambling den for them. They cannot invest in Apple
or Nike in the US, which they would see is
something more secure, but they're not allowed to take them
money out, so they put them money in real estate.
So that's the reason for One of the reasons for
the real estate crisis, of course, is it's a place
where most Chinese are investing money buying second and third homes.
On the other front is that the trade war is
really hitting China because again, when you are decoupling from
China or de risking from China, as some of them
multinationals would prefer to call it, you are taking away
a lot of manufacturing power from the Chinese. That doesn't
mean that Chinese multinationals is not doing well because they
have factories in Southeast Asia and Mexico, right, But it
does mean that Chinese labor is not doing well because
most people are losing their jobs, and so this is
a big problem for China. China is in the sense
going through what a lot of Middle America went through
when outsourcing began in earnest after the Cold War, when
American corporate corporation is no longer needed to placate, you know,
labor because they didn't have to, you know, keep labor happy.
Lest labor decide they want to become you know, uh,
they want they want us to follow the Soviet model. Right,
that model is dead, So now you know, corporations didn't
really have to worry about what labor thought anymore. Globalization
the end of history, right, we all know what that
led to. So China is dealing with that now. In essentially,
the trade war is really a one two punch to
the labor markets where they're dealing with a lot of outsourcing,
and that's a big headwind for Chinese labor.
Speaker 3: A lot of the what the what's perceived in the
West to be dramatic Chinese progress has turned out to
really be a lot of smoke and mirrors, hasn't it.
Speaker 1: Well, Look, I've been to China, so I've seen some
of the smoking mirrors myself. I've seen the ghost cities.
I've seen the three lane roads with no one in them.
I've seen you know, small factory office towers with you know,
no one in them. It was almost like I was
on the Truman Show. But on the other hand, even
though I saw that when I was in Beijing, when
I was in other cities like sheng Dou, which is
a big Texas city, as much as it was still
very much a developing country, especially in Shengdu. It looked
very much like towns and areas I would see in
Brazil poor, right, but in Beijing rich trains, clean, right,
high tech, fast, safe, right, you know. Compared to compared
to areas in Philly or areas in New York, for example,
it looked very much like the First World. So, you know,
there are many things of China that are you know,
on par with or better than what we have in
the United States. But because it's such a huge country,
it still has a lot of that developing country orio
the old Ford world, what we used to say back
in the eighties. You know that that still very much
exists in China. I know a lot of people in
the West I could say, you know, China is not
a you know, a developing country anymore. Look at them,
you know, And it's true, But they're only looking at
the Beijing and Shanghai girls with the Michael Korus dilegit
Michael Korus handbags, and they're not looking at it the
guys who live in villages and pick apples for a living,
you know what I mean. And most people exist and
they exist by the tens of by the hundreds of thousands, right, so,
you know China and having said that, carry this is
why China can't afford to have manufacturing go overseas, meaning
to Southeast Asia, because they lose that blue collar labor,
they lose that social contract that they had with the
Chinese clubs, and that's a big problem to the CCP,
probably bigger than a crashing real estate market. Yeah.
Speaker 3: Well, they've kind of breached the agreement with their people,
which was, hey, we'll provide you prosperity, economic success, and
in exchange, you just ignore everything political, behave yourselves and
don't cause any trouble. And we're kind of seeing like
the end of that social compact, the erosion and of
it be basically the dissolution of it. Right.
Speaker 1: Well yeah, if this, yeah, the trade war keeps up
and I expect it to then, yeah, that that will
continue to happen. I don't see how. I don't see
you know what, Look, what is China do to There
are whole companies in China that just exist to serve
the Western market. Look at companies like Sheen and Timu.
You think Chinese are buying Sheen and Timu Clothes probably not.
I mean that that's that's a company that is designed
to make goods for the US. And these are people
who you know in she and we think of Sheen
is a big, a big corporation, a big brand. Now
they've got stores in Europe. But again these are there,
the clothes that they sell on Sheen and the products
they sell in Timu, they're made by you know, small
businesses that probably have stitch and sew factories in their basement,
you know. And the fourteen year old girl is you know,
happily making a baby dress right for for for free
because it's her mom's it's her mom's stitch and sew
factory with ear and the art right and they're selling
it to you. But if that's why they could sell
it to you for five dollars, because the little girl
making the dresses making zero. And I'm not saying that's
all of she and that's all of Timu, but this
is this is a lot of Chinese labor that a
lot of Chinese labor is geared towards making things for
the West and making things for export. And when that
market closes up, you know, where do they go? Well,
we don't know where they're going. We don't have a
lot of data on that. On China, A lot of
them are still making stuff and they're dumping it in
Europe and they're dumping it maybe in Brazil, in those
or in Mexico, and those countries will eventually have to
come to terms with that. But that is a huge
problem for China again, as I said, because as you said,
once that Social Pact erodes, then the CCP has a problem.
Then you could even see shake up. In the worst
case scenario poshishin Ping, you could even see a shake
up in the hierarchy of CCP and who leads.
Speaker 3: Yeah, and that's that's the end result, isn't it. Basically,
maybe we're not actively going for a regime change, but uh,
that is kind of the inevitability, isn't it. Because you know,
and one thing I want to address is tofu dreg construction.
It's rampant and it's demonstrative of the extent of the
corruption in China where these new projects, super projects, uh
you know, they're basically you know, they're they're like falling
apart before the very eyes.
Speaker 1: Yeah, some of the projects we've seen it, they do
they do fall apart. A lot of this is provincial governments,
right that that you think of China as everything is
really about the labor market. China is mostly concerned with
the labor force. Again, keeping in mind that that upper
mobility that promise that social cardy with the CCP, with
the rest of the Chinese, the la laobaijing as they're
called right old hundred names, is key to the CCP survival. Okay.
If they cannot deliver on that, the CCP is in
huge trouble and the Chinese will uprise. Okay. Now, if
those people are losing jobs, and I think that they are,
where where do they go? We don't know? This is
all This is all kind of kind of new now,
but you know what will the upper echelons of the
CCP say, Well, they say it's time for sheishing Thing
to step down? Who would they who would replace him?
As he was saying before before the taping, would it
be some guy who looks more like a pro Western
type guy. And I will say that, and I say
this all the time that Chishin Thing is a godsend
to the West, especially the United States, because if if
you had if you had a pro Western Let's let
bygones be bygones. Chinese leader, you think all these restrictions
on what kind of tech you can sell China would
still exist or would they be lifted? They'll be lifted.
You think a lot of these high tariffs that China
faces versus its neighbors in Southeast Asia, would they be equalized.
I'm not saying taras would come off like pre twenty
seventeen Trump, but maybe they would go to Vietnam levels
at twenty percent. That would probably happen. That would be
an equalizer for China. And then all of a sudden,
all the multinationals that are rethinking about maybe moving to
Mexico or setting up, you know, expanding capacity at their
factories in the United States, maybe they decide, hey, you
know what, making that Lincoln Continental is a good idea
in China after all, Keeping that buick export exports good
because that's what That's what was happening. We were making
cars four and GM were making cars in Asia and
South Korea and China for export to the United States.
It's bad enough, We've got a neighbor right next door
at free trade. We can easily do it there. But
over time you would just why would you make anything
in the US unless it was literally too big to ship.
So you know, you want to have someone in China
who's a little bit antagonistic. It really helps the United States,
It really helps the America First trade agenda. If you
don't and if you don't don't have that, you have
somebody who, you know, who looks like a western Er
so to speak, in terms of, you know, very liberal
and who knows, maybe they have Pride Month going on
in Shanghai. Then it's all over it. You'll just have
the multinationals, you know, let by guys be baggines, as
I said, and you will go back to a pre
twenty seventeen relations with China, which would be I think
would be a huge headwind for a lot of industry
in the United States, especially industry that has invested here
over the last few years.
Speaker 3: Agreed, Agreed, all right, So when we have this conversation
in six months, where do you think will be kind
of Ah.
Speaker 1: That's a good question. I think that in six months
we are in the same situation with China. I think
six months there will be we will know more about
how tariffs have impacted inflation and cost of living, which
is very important on top of mind for the United States,
and you're going to have mid turns, so that's going
to take over a lot of hawk go out of
the topic and may supersede the America First agenda. So
what Trump needs to do and what we need to
see is that the tariff policy, of which China is paramount,
is increasing manufacturing labor LUKLA labor wages are rising, and
even if inflation is going up three percent whatever that
the cost of living, even if it's rising, Americans can
handle it. If because if your beef is costing twelve
dollars a pound right from seven dollars a pound today
and I'm getting laid off even if the beef is
still duty free from Mexico, the average Joe is not
going to think that there gonna They're gonna hear whatever
they hear in the New York Times where CNBC or
CNN or whatever Facebook telling us it's all because of tariffs,
it's all Trump's fault, and then that's gonna make that's
gonna sour things, and that could sour things on I
don't think it will sour things on China. I think China,
you know, the China. At at best you get a
stalemate right with China. But I think it could it
could easily sour things on tariffs and Southeast Asia and elsewhere.
So and that that could be a problem because now
you don't have a signal that says, okay, I invested
ten million dollars in expanding this this factory, right the
GM factory, let's say, in Indiana, to make more cars
here than I do in Mexico. Why did I do that?
You know? What was the point? So those are the
guys you have to entice. You have to entice, You
have to convince them that Trump's trade policy is working
and China is is the is the you know, the main,
the main narrative there. If you go soft on China,
then you obviously go soft on on the rest of Asia.
And then people who are saying, yeah, I'm going to
invest in the United States, that's like, why why am I?
Why am why am I? Why am I doing that?
Going to bother?
Speaker 3: Yeah? Why did I bother?
Speaker 1: All right?
Speaker 3: All right? Ken, well, really fascinating. And I guess it's
we're gonna sit back and see. I don't think Trump.
I think Trump bluffs a lot. I think he's a
really good poker player, but I think he's holding a
lot of good cards here, so I just don't think
that's going to happen. But hey, I've been wrong before. Yeah,
and it's going to be interesting to find out. Hey,
just tell us. So where do we find you? How
do we connect with you on the web?
Speaker 1: Sure, so you find me at the Coalition for a
Prosperous America, which is an advocacy group for American producers,
whether they beef ranchers or solo manufacturers. You want you
guys to be making things in the United States, and
we are at Prosperous America dot org. Or you can
find me on X at my old Forbes handle, which
would be brick Breaker. I'm not for everybody on X.
Don't care, man, Hey.
Speaker 3: You think who do you think you're talking to here?
I'm everybody either believe you me. That just ain't the case.
But hey, appreciate you coming on questions comments for Ken myself,
Klatcarrie LUTs dot com. You can also find all of
my work. It's on substack now Carrie Lutz dot com.
Take you right there. Financial Survival Network dot com, Same deal. Ken,
appreciate you coming on and we will talk to you
again soon.
Speaker 1: My pleasure.
Speaker 2: Thank you for having a good day, Thanks for listening
to Carrie Letz's Financial Survival Network, your solution to today's
trying times. For the latest, go to Financial Survivalnetwork dot com.
Financial Survival Network now more than ever,