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Speaker 1: Yeah, you want to have someone in China who's a

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little bit antagonistic. It really helps the United States. It

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really helps the America First trade agenda if you don't

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and if you don't have that, you have somebody who

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you know who looks like a Western or so to speak.

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Speaker 2: And you're listening to Carrie Letz's Financial Survival Network where

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00:00:16,239 --> 00:00:19,679
you get valuable information you just can't find anywhere else

8
00:00:20,239 --> 00:00:23,839
to thrive in today's trying times. You need the Financial

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00:00:23,920 --> 00:00:29,000
Survival Network now more than ever. Go to Financial Survivalnetwork

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00:00:29,039 --> 00:00:32,759
dot com and get your free newsletter and gift. Financial

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Survival Network now more than ever.

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Speaker 3: And welcome you are listening to and watching the Financial

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Survival Network. I'm your host, Carrie Letz. Well, is the

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war the trade war with China? Is it winding down

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or is it gearing up? Well, if you're curious, then

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you're definitely going to want to hear from my next guest,

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Kenneth Raposa, and you find him at Prosperous America dot org.

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And ken it's great to have you back on the show. So,

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trade war with China? What's the status now?

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Speaker 1: Sure? Well, I like to call Trump the good cop

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and bad cop all rolled into one. So if you're

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trying to figure off the trade war, I think the

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trade war is just hitting up. But if you are

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a regular Joe who's not watching this all day long,

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you would hear on Monday Trump saying We're going to

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hit China with one hundred percent taffs. They're withholding rare

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earth minerals from US and we need them and that's

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not fair because they broke a promise and that's that.

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And then Tuesday morning comes and Trump says, well, Shishinpeg

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was just having a bad day all as well. We're

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all friends. So you just don't know where it's going.

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But from the closer look is that the United States

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is in an economic battle with China. And don't think

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of China as just one country. Think of China as

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the economic leader of a region. And that region is

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all of Asia. And that is a region that was

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heavily dominated for many years by the West, by by

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US multinationals, by some degree, Japanese multinationals, and South Korean multinationals.

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That is going by the wayside. The Chinese companies are

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no longer making Happy Meal toys and Nike shoes. They

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are making their own brands, and they are competing directly

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with big American tech and big American multinational corporations, whether

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they're you know, the equivalent of Amazon cloud service providers,

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or whether they are the guys who are making cars. Right.

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For example, Europe is worried about EV's coming in from

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China and the evs it just will absolutely outnumber European

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evs on price alone. So it's a situation where the

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United States has to convince their multinationals to invest in

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the United States, and the only way to do that

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is to close the door as hard as you can

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and as tight as you can in on China. And

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that means making China completely unattractive, and not only China,

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but the countries around it, including Southeast Asia where Trump

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was just visiting those four countries, so Malaysia, Cambodia, Thailand, Vietnam,

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and as you notice, despite the talk of trade deals,

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we still have the twenty percent tariff on all those

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countries at a minimum. So and that is because we

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cannot have American multinationals just setting up shop in Vietnam,

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where one dollar goes a lot farther there than it

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does here, and shipping goods into the United States. That's

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just not that's just going to defeat the purpose. So

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the battle continues, and they're trying to isolate China to

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the best of their ability. We'll see if they can succeed.

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Speaker 3: Yeah. So also you had the issue of them transshipping

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through Vietnam and Thailand, all of that, and you know,

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on the other hand, they're sharing the same hemisphere as China,

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the same area, So how much can they really go

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against the China, That's.

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Speaker 1: Right, it's a good question. Well, yeah, and you know,

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in a lot of these countries like Vietnam and maybe Malaysia,

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I can't remember the top of my head, but some

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of the Big four, the Old Asian Tigers, their foreign

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direct investment mostly comes from China. You know, United States,

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of course would be a close second, and in some

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cases even number one. But China is very important to

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those to those economies. There's a lot of Chinese entrepreneurs,

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including expact Chinese who fled because they're not exactly enamored

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with the CCP, and they have set up shop in Vietnam,

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and of course Singapore is crawling with Chinese. So you know,

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these are areas that I'm very entwined with China. But

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the deals that came out of Southeast Asia over the

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last week have basically said that, Okay, we're going to

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do this with you. You know, US Americans are going to

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do this deal with with you. Guys are going to

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you know, buy your rare earths or partner with you

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on these projects. But we're only going to do it

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in so far as you'll sign any big deal with

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with with the Chinese. And how long will that hold.

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Trump is only president for three more years, so we

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will see. It's very difficult for these countries down there

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to just turn around and say in the US versus

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them world of the Trump administration to say that we're

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not you know, we're going to more. We want to

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work with you to help isolate China. What Trump really

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has to do is say to our multinationals, look, we

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know you love Asia and you've loved it for a

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very long time, and if it was up to you,

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you'd put all your money there, but we need to

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reverse that and put some of it here, because if

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you don't, then the future century. Yes, it's absolutely it's

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absolutely Asia and there's no stopping it, and everybody knows it.

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So you had to put some sort of roadblocks up there,

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and that would be the tariffs and other ways to

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isolate China. And that's what the Trump administration is doing there.

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They understand that China is the leader of you know,

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in a multi polar polar world. China is the leader

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of the other of the other group, and the United

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States is the leader of the of the Western group.

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And so if it's not going to but and it's

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going to playcate China and just by all our multinationals

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just offshore and invest there, you know, then China really

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becomes a dominant force in Asia and continues to become

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a dominant force in American supply chains too, to our dismay.

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Actually in the years ahead.

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Speaker 3: Well, uh, but China is not doing very well, now

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are they. Their real estate bust factories closing up left right.

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Speaker 1: Uh.

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Speaker 3: They've got some seemingly very difficult problems, and those problems,

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the solutions to those problems and the causes are directly

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tied into the CCP, and they don't seem very uh

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intent on solving them, do they.

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Speaker 1: Well, I will tell you this that the CCP must

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solve them, because the CCP only rules on the notion

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that it can provide upward mobility to the people. And

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there are more non CUCP people who are a political

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Chinese than there are members of the CCP, and when

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they're mad, they will rise up. We saw, of course

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in the eighties and Tenement Square, and we saw it

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recently during COVID with the White Paper protests. When the

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Chinese people are pushed to the wall, they will rise up.

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And they don't rise up often because their lives have

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been improving for at least the generation. Now, if that changes,

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then I expect China will see more civil unrest. All right,

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But what's happening in China now with real estate is

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you know, that's a domestic policy issue where a lot

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of Chinese people are not really allowed to invest overseas. Right.

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The Chinese stock market is really a you know, it's

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really a gambling den. If you look at if you

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look at like the Shanghaik seen, you see bunch of

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old guys there. It looks like you're walking into Foxwood's

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casino or Alagio or something like that. You know, they're

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all sitting there at a table, So it's more of

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a gambling den for them. They cannot invest in Apple

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or Nike in the US, which they would see is

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something more secure, but they're not allowed to take them

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money out, so they put them money in real estate.

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So that's the reason for One of the reasons for

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the real estate crisis, of course, is it's a place

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where most Chinese are investing money buying second and third homes.

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On the other front is that the trade war is

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really hitting China because again, when you are decoupling from

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China or de risking from China, as some of them

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multinationals would prefer to call it, you are taking away

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a lot of manufacturing power from the Chinese. That doesn't

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mean that Chinese multinationals is not doing well because they

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have factories in Southeast Asia and Mexico, right, But it

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does mean that Chinese labor is not doing well because

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most people are losing their jobs, and so this is

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a big problem for China. China is in the sense

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going through what a lot of Middle America went through

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when outsourcing began in earnest after the Cold War, when

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American corporate corporation is no longer needed to placate, you know,

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labor because they didn't have to, you know, keep labor happy.

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Lest labor decide they want to become you know, uh,

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they want they want us to follow the Soviet model. Right,

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that model is dead, So now you know, corporations didn't

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really have to worry about what labor thought anymore. Globalization

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the end of history, right, we all know what that

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led to. So China is dealing with that now. In essentially,

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the trade war is really a one two punch to

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the labor markets where they're dealing with a lot of outsourcing,

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and that's a big headwind for Chinese labor.

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Speaker 3: A lot of the what the what's perceived in the

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West to be dramatic Chinese progress has turned out to

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really be a lot of smoke and mirrors, hasn't it.

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Speaker 1: Well, Look, I've been to China, so I've seen some

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of the smoking mirrors myself. I've seen the ghost cities.

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I've seen the three lane roads with no one in them.

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I've seen you know, small factory office towers with you know,

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no one in them. It was almost like I was

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on the Truman Show. But on the other hand, even

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though I saw that when I was in Beijing, when

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I was in other cities like sheng Dou, which is

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a big Texas city, as much as it was still

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very much a developing country, especially in Shengdu. It looked

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very much like towns and areas I would see in

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Brazil poor, right, but in Beijing rich trains, clean, right,

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high tech, fast, safe, right, you know. Compared to compared

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to areas in Philly or areas in New York, for example,

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it looked very much like the First World. So, you know,

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there are many things of China that are you know,

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on par with or better than what we have in

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the United States. But because it's such a huge country,

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it still has a lot of that developing country orio

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the old Ford world, what we used to say back

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in the eighties. You know that that still very much

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exists in China. I know a lot of people in

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the West I could say, you know, China is not

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a you know, a developing country anymore. Look at them,

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you know, And it's true, But they're only looking at

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the Beijing and Shanghai girls with the Michael Korus dilegit

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Michael Korus handbags, and they're not looking at it the

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guys who live in villages and pick apples for a living,

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you know what I mean. And most people exist and

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they exist by the tens of by the hundreds of thousands, right, so,

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you know China and having said that, carry this is

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why China can't afford to have manufacturing go overseas, meaning

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to Southeast Asia, because they lose that blue collar labor,

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they lose that social contract that they had with the

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Chinese clubs, and that's a big problem to the CCP,

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probably bigger than a crashing real estate market. Yeah.

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Speaker 3: Well, they've kind of breached the agreement with their people,

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which was, hey, we'll provide you prosperity, economic success, and

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in exchange, you just ignore everything political, behave yourselves and

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don't cause any trouble. And we're kind of seeing like

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the end of that social compact, the erosion and of

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it be basically the dissolution of it. Right.

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Speaker 1: Well yeah, if this, yeah, the trade war keeps up

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and I expect it to then, yeah, that that will

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continue to happen. I don't see how. I don't see

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you know what, Look, what is China do to There

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are whole companies in China that just exist to serve

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the Western market. Look at companies like Sheen and Timu.

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You think Chinese are buying Sheen and Timu Clothes probably not.

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I mean that that's that's a company that is designed

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to make goods for the US. And these are people

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who you know in she and we think of Sheen

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is a big, a big corporation, a big brand. Now

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they've got stores in Europe. But again these are there,

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the clothes that they sell on Sheen and the products

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they sell in Timu, they're made by you know, small

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businesses that probably have stitch and sew factories in their basement,

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you know. And the fourteen year old girl is you know,

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happily making a baby dress right for for for free

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because it's her mom's it's her mom's stitch and sew

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factory with ear and the art right and they're selling

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it to you. But if that's why they could sell

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it to you for five dollars, because the little girl

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making the dresses making zero. And I'm not saying that's

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all of she and that's all of Timu, but this

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is this is a lot of Chinese labor that a

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lot of Chinese labor is geared towards making things for

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the West and making things for export. And when that

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market closes up, you know, where do they go? Well,

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we don't know where they're going. We don't have a

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lot of data on that. On China, A lot of

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them are still making stuff and they're dumping it in

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Europe and they're dumping it maybe in Brazil, in those

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or in Mexico, and those countries will eventually have to

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come to terms with that. But that is a huge

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problem for China again, as I said, because as you said,

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once that Social Pact erodes, then the CCP has a problem.

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Then you could even see shake up. In the worst

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case scenario poshishin Ping, you could even see a shake

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up in the hierarchy of CCP and who leads.

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Speaker 3: Yeah, and that's that's the end result, isn't it. Basically,

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maybe we're not actively going for a regime change, but uh,

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that is kind of the inevitability, isn't it. Because you know,

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and one thing I want to address is tofu dreg construction.

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It's rampant and it's demonstrative of the extent of the

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corruption in China where these new projects, super projects, uh

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you know, they're basically you know, they're they're like falling

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apart before the very eyes.

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Speaker 1: Yeah, some of the projects we've seen it, they do

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they do fall apart. A lot of this is provincial governments,

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right that that you think of China as everything is

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really about the labor market. China is mostly concerned with

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the labor force. Again, keeping in mind that that upper

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mobility that promise that social cardy with the CCP, with

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the rest of the Chinese, the la laobaijing as they're

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called right old hundred names, is key to the CCP survival. Okay.

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If they cannot deliver on that, the CCP is in

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huge trouble and the Chinese will uprise. Okay. Now, if

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those people are losing jobs, and I think that they are,

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where where do they go? We don't know? This is

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all This is all kind of kind of new now,

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but you know what will the upper echelons of the

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CCP say, Well, they say it's time for sheishing Thing

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to step down? Who would they who would replace him?

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As he was saying before before the taping, would it

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be some guy who looks more like a pro Western

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type guy. And I will say that, and I say

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this all the time that Chishin Thing is a godsend

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to the West, especially the United States, because if if

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you had if you had a pro Western Let's let

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bygones be bygones. Chinese leader, you think all these restrictions

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on what kind of tech you can sell China would

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still exist or would they be lifted? They'll be lifted.

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You think a lot of these high tariffs that China

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faces versus its neighbors in Southeast Asia, would they be equalized.

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I'm not saying taras would come off like pre twenty

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seventeen Trump, but maybe they would go to Vietnam levels

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at twenty percent. That would probably happen. That would be

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an equalizer for China. And then all of a sudden,

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all the multinationals that are rethinking about maybe moving to

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Mexico or setting up, you know, expanding capacity at their

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factories in the United States, maybe they decide, hey, you

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know what, making that Lincoln Continental is a good idea

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in China after all, Keeping that buick export exports good

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because that's what That's what was happening. We were making

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cars four and GM were making cars in Asia and

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South Korea and China for export to the United States.

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It's bad enough, We've got a neighbor right next door

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at free trade. We can easily do it there. But

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over time you would just why would you make anything

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in the US unless it was literally too big to ship.

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So you know, you want to have someone in China

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who's a little bit antagonistic. It really helps the United States,

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It really helps the America First trade agenda. If you

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don't and if you don't don't have that, you have

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somebody who, you know, who looks like a western Er

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so to speak, in terms of, you know, very liberal

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and who knows, maybe they have Pride Month going on

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in Shanghai. Then it's all over it. You'll just have

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the multinationals, you know, let by guys be baggines, as

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I said, and you will go back to a pre

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twenty seventeen relations with China, which would be I think

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would be a huge headwind for a lot of industry

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in the United States, especially industry that has invested here

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over the last few years.

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Speaker 3: Agreed, Agreed, all right, So when we have this conversation

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in six months, where do you think will be kind

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of Ah.

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Speaker 1: That's a good question. I think that in six months

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we are in the same situation with China. I think

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six months there will be we will know more about

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how tariffs have impacted inflation and cost of living, which

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is very important on top of mind for the United States,

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and you're going to have mid turns, so that's going

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to take over a lot of hawk go out of

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the topic and may supersede the America First agenda. So

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what Trump needs to do and what we need to

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see is that the tariff policy, of which China is paramount,

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is increasing manufacturing labor LUKLA labor wages are rising, and

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even if inflation is going up three percent whatever that

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the cost of living, even if it's rising, Americans can

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handle it. If because if your beef is costing twelve

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dollars a pound right from seven dollars a pound today

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and I'm getting laid off even if the beef is

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still duty free from Mexico, the average Joe is not

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going to think that there gonna They're gonna hear whatever

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they hear in the New York Times where CNBC or

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CNN or whatever Facebook telling us it's all because of tariffs,

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it's all Trump's fault, and then that's gonna make that's

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gonna sour things, and that could sour things on I

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don't think it will sour things on China. I think China,

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you know, the China. At at best you get a

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stalemate right with China. But I think it could it

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could easily sour things on tariffs and Southeast Asia and elsewhere.

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So and that that could be a problem because now

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you don't have a signal that says, okay, I invested

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ten million dollars in expanding this this factory, right the

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GM factory, let's say, in Indiana, to make more cars

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here than I do in Mexico. Why did I do that?

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You know? What was the point? So those are the

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guys you have to entice. You have to entice, You

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have to convince them that Trump's trade policy is working

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and China is is the is the you know, the main,

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the main narrative there. If you go soft on China,

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then you obviously go soft on on the rest of Asia.

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And then people who are saying, yeah, I'm going to

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invest in the United States, that's like, why why am I?

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Why am why am I? Why am I doing that?

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Going to bother?

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Speaker 3: Yeah? Why did I bother?

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Speaker 1: All right?

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Speaker 3: All right? Ken, well, really fascinating. And I guess it's

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we're gonna sit back and see. I don't think Trump.

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I think Trump bluffs a lot. I think he's a

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really good poker player, but I think he's holding a

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lot of good cards here, so I just don't think

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that's going to happen. But hey, I've been wrong before. Yeah,

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and it's going to be interesting to find out. Hey,

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just tell us. So where do we find you? How

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do we connect with you on the web?

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Speaker 1: Sure, so you find me at the Coalition for a

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Prosperous America, which is an advocacy group for American producers,

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whether they beef ranchers or solo manufacturers. You want you

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guys to be making things in the United States, and

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we are at Prosperous America dot org. Or you can

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find me on X at my old Forbes handle, which

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would be brick Breaker. I'm not for everybody on X.

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Don't care, man, Hey.

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Speaker 3: You think who do you think you're talking to here?

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I'm everybody either believe you me. That just ain't the case.

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But hey, appreciate you coming on questions comments for Ken myself,

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Klatcarrie LUTs dot com. You can also find all of

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00:20:55,559 --> 00:20:59,119
my work. It's on substack now Carrie Lutz dot com.

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Take you right there. Financial Survival Network dot com, Same deal. Ken,

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00:21:03,920 --> 00:21:06,440
appreciate you coming on and we will talk to you

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again soon.

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Speaker 1: My pleasure.

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Speaker 2: Thank you for having a good day, Thanks for listening

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to Carrie Letz's Financial Survival Network, your solution to today's

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00:21:14,640 --> 00:21:19,519
trying times. For the latest, go to Financial Survivalnetwork dot com.

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00:21:19,519 --> 00:21:23,359
Financial Survival Network now more than ever,