US-China Trade War & its Geopolitical Ramifications! W/Einar Tangen | Geopolitical Trends

All right, hello everybody and welcome to Geopolitical Trends, where truth matters. Uh, we are very, very excited today, or this evening, that is. It's, it's 9:00 PM here in Dallas, it's 10:00 AM in Beijing, where my guest is, is none other than Einar Tangen. Let me bring him in right away. Hi, Einar.

Hi, David, how are you? Thanks for having me.

Of course, of course. It's always a pleasure to have you here. For those who do not know who I am, let me just do a brief intro and we're getting into our topic. In addition to being a Juris Doctor, which is a law degree, that is, guys, for those who do not know, sounds better.

Juris Doctor.

I always wanted to be fair to my guests.

You can also add a Proctoring Admiralty. It doesn't mean much, but you know, it sounds great.

Well, the truth is that's what You, you earned it, Einar. So Einar is also a senior fellow at Tahi Institute, is also the founder of Asia Narratives, uh, economic and political affairs commentator, senior fellow at the Center for International Business Ethics at the University of International Business and Economics. And one more thing, he's also the chairman of China Cities Blue Book Consulting. So very, very interesting. So anyway, we got a lot to cover, Einar, and again, I couldn't think of anyone besides I trust your judgment, you're a friend of mine, and I also like, you know, your insights about the, the changes that's taking place on the global stage. So, so what are we going to start with? I would like to have your input as to the economic concerns that now, uh, confounded Trump's calculations, especially when it comes down to, for example, the bond yields or the bond market or the financial market. Because Mr. Trump didn't expect that China is going to hit hard back the US. What's your take on that?

Well, it's not necessarily clear that China was the source of the bond instability. So I was an investment banker in addition to everything else, and I specialized in bonds. In fact, I was chairman of my city's debt commission, which dealt with bonds, municipal bonds. It's the same thing as national bonds. So, you know, it's just debt. And the US has a lot of it, $36.2 trillion and counting. It'll be $38 trillion by the end of the year. Uh, last year, uh, the United States, we spent $1 trillion on interest, and that is expected to rise as rates rise. Why are rates rising? Well, Donald Trump is creating chaos and uncertainty. What do businesses need? They need stability. They need to be able to predict what's going to happen. His on-again, off-again tactics, he says it's brilliant negotiating. Everyone else thinks it's just brilliant bull stuff. Anyway, it's not working out. Uh, he's riled the bond markets who are now concerned about the credit of the United States based on its economy. And as a result, yeah, uh, there are fluctuations in the bond market. They're going up. Now remember, in theory, Donald Trump wants to devalue the US dollar. Uh, he's working off a plan that was developed 12 years ago by a fellow named Robert Lighthizer. Remember that name? He was the US Trade Representative during Trump's, um, first term, and he's still back in the— behind the scenes pulling all the strings. And his idea was you coerce companies to come back to the US using tariffs Then you devalue the dollar by about 30%, and that makes, uh, these companies, uh, quote, competitive worldwide. Except even if you apply that formula, it doesn't work. And that is exactly what is happening here. You have an ill-thought-out plan, uh, being implemented by somebody who has the economic understanding of an 11-year-old. Who is pushing chaos on the world as he destroys the very base that voted for him. Remember, 70% of Americans voted, were concerned about the economy. Why? Because they believed prior to the election that they were living paycheck to paycheck. Obviously that does not make you happy. So Donald Trump promised on day one he would control prices. And since day one, all he has done is increase prices. We see recession looming, real possibility of a depression. This is not this kind of stuff that is going to make businesses confident about investing in America or building new plants and facilities.

Well, will this— will it be fair to say, Einar, that now with Donald Trump's actions, is the world now moving or having justification to ditch the US dollar moving forward?

Would that be correct? Yeah, David, they're not going to have a choice. The dollar was a bastion of stability. You could count on it. Things were fungible. If you put your money into the US market, you could buy 7-day resets, which would— basically, it's money at call, because you can sell those resets even before the expiration time. And then you have the 1-year, 2, 5, 10, 10-year bonds and things like that, if you wanted to go a little bit longer. So whatever your perspective or horizon was for your money in the United States, you had an option, but that option was based on the idea that it would be stable. The idea that the US can willy-nilly take your, you know, $1 and now make it 70 cents. I don't think that really plays well with anybody. And that's really where you're seeing the market reaction. Um, and you know, one other thing, David, you know, remember, The reason that China does not invest in the US, it holds US dollars because it was a stable form of currency, one, and two, to allow its trade. All right. So that you're not constantly buying and selling dollars and yuan and taking the hit on the terms of the fees. You just keep dollars in there. So with trade going down, what is the purpose of holding US dollars? No one sees it as a good long-term or middle or long-term buy. And it certainly isn't necessary for China anymore with these huge tariffs hanging over their head. So this is a situation where Donald Trump is basically shooting himself not only in the foot, but the leg, the kidneys, and sometimes in the face.

For sure, for sure. I mean, it's pathetic how the administration is moving into this direction given the changes that's taking place on the global stage economically and geopolitically. To go back to your point, Einar, and correct me if I'm wrong here, isn't Japan moving the same direction as far as dumping the US dollar quietly?

We're trying to do the same. Everybody's doing it. I mean, you go back the last 5 years and all you'll see is a story of central banks basically ditching the dollar. Uh, the only reason that the markets have remained stable is that people, individuals were parking money in the US because they thought, saw it as stable. Yields were high. Why not put it there? American dollar, how can you lose? Now with the new narrative that, you know, Donald Trump wants to devalue the dollar. If you see a flight from bonds by the private side at the same time that central banks are ditching the dollar, What happens? Rates go up. Doesn't matter what the Fed does. All right. People will start pricing in the risk. And there's this, you know, thing called supply and demand, and the supply will be huge and the demand will be less. So prices will go up, prices go up. That means that it's a bigger dip into the already $6 trillion, um, budget that the US has. $1 trillion of which is interest alone. If that goes to $2 trillion, the mayhem will be incredible. Remember, even with that $6 trillion, $2 trillion of that was borrowed. So if you were looking at this just outside, if it wasn't the US and it was some other country, you say, this country is a Ponzi scheme. They pay $1 trillion in interest and they borrow $2 trillion every year. Which means they're borrowing to pay their interest costs. That's not sustainable by any measure. And I don't care about people who say, well, gee, you know, US dollars should increase in liquidity for the global market. Nonsense. This is Bernie Madoff on super steroids.

Steroids. To those who do not know who Bernie Madoff is, check him out. It was a schemer. I mean, top-notch, per se. So you're absolutely correct.

And somebody who knew Donald Trump, just so you understand.

So that tells the story right there.

So yes, it does.

Yeah, you are point on. You're point on, Einar, because a lot of Americans do not understand this basics of the economics, how it works. And we thinking that Mr. Trump is going to be the savior. I, I didn't vote for the guy. I will not vote for any whatsoever, given how they are misleading the population and average citizen have no idea, no understanding. So now let me ask you this, Einar, and because before we'll dig into China specifically here, I need to know your, your insights regarding whether these tensions between the United States and China economically could turn into geopolitical tensions. Is there possibility for that?

Could? David, I think that we're past the could stage. We are in political tensions. I mean, if you're talking about armed conflict, there's always a possibility in these circumstances for some sort of mistake to happen, an accident that leads to an escalation. Right now, Trump is desperate. Listen, his new theme song should be from the 1970 hit from Blondie, Hanging on the Telephone. He keeps telling everybody that, you know, China has to call, they're going to call, they must call. Well, you know, if you're supposed to be a master negotiator, the last thing you're supposed to do is telegraph your weakness. And this is what Donald Trump has been doing for the last week. He just doesn't seem to understand. Even yesterday, he made some quip about, you know, where's my vice president? Oh, he must be talking to China. I mean, he's, he's really in a deep situation. China has laid some breadcrumbs in front of him. I just don't know if his administration is up to actually taking them down. And what I mean by this is that last week China published a white paper. It had 6 points. The one point that was most interesting to me was this discussion about why the Phase 1 deal, the deal where China said, look, we'll buy a lot of American American goods, um, to help bring down the, uh, trade deficit. Well, it didn't actually bring down the trade deficit during Donald Trump's time. It skyrocketed, uh, even more than his predecessor. But the fact is they had this deal and it was interrupted by COVID. Also, the US was kind of on this idea that somehow, uh, China should pay more for American goods than the market, uh, out there. And China was not up for that. That would be, in essence, mob-style, point the gun, you have to buy from me even though it's more expensive. That just doesn't work for China. As a result, it failed, but the fact that they talked about this in this white paper is a clear indication that there is an avenue for face-saving. Donald Trump could sit down and say, look, he could call Xi and say, look, I'd like to talk about a Phase 2. And I think there'd be some receptivity to that. Yesterday, China made it very clear that happy to talk to you, but, you know, forget this idea of bombastic threatening us and telling us what we're going to do and all this kind of nonsense. You want to talk, it has to be civil. There has to be somebody in charge who has your full confidence. We're not going to play peekaboo while you, you know, you think you're being cute by saying, having one guy say something and then undercutting him. The Chinese watched the hearings at the congressional level where he sent his trade representative to defend his tariffs, saying they would never back down. And a congressman said, "Are you aware 2 minutes ago Donald Trump just paused your tariffs that you'd never back down by 90 days?" And the guy looked like a complete fool. China sees that and they don't want to be in that situation. So they've been making it clear. Get somebody in there who's reasonable, has the ability to make a deal, and we'll sit down and try to hammer something out. Now, what is China's long-term goal? Is this going to set the future for these two countries? Absolutely not. Yeah, what you're— China is facing is a Donald Trump who is literally a bull in a china shop, or I should say he takes the china shop with him wherever he goes because he's breaking everything, hasn't fixed anything. And they're saying, let's get through this period, whether it's 2 years or 4 years. The fact is that Donald Trump will be gone despite his dreams of a third term. And his economic performance will assure that. So China is just looking beyond the moment to the future.

Yeah. Well, except that— well, this is where they miss understanding in part in Washington about China, because I had some talks with some people in DC. What they are expecting is that they're expecting that the Chinese will make a call to Donald Trump. And I was like, what are you talking about?

There is no way. What makes you think that's China?

Yeah, I didn't get it.

What makes you think that? Well, look, next you're going to tell me you don't believe in the Easter Bunny or the Tooth Fairy or Santa Claus. Right. I mean, this is just wild misunderstanding. I mean, look, I was born in Washington, DC. I did a bit of lobbying work when I was living in the US, and I was doing politics. I can tell you, it's a bubble. People, they sit around, they talk to each other, and they convince themselves— and this is both right and left— that their ideas are just terrific. It's just a question of getting it done. Do they do any real planning? Absolutely not. They just get their hot ideas and throw them onto the table, expect the Congressional Research Department to figure out what, how to make sense of them. And then, you know, without any regard to what the long-term consequences of their brilliant brain fart is, they go forward and they just try to cobble together enough special interests to pass the bill. This is not the way to run a country. And that's why the US is so divided. The political apparatus has not been able to respond. And this is not an indictment of democracy. It's an indictment of a system of democracy that depends on special interests and large amounts of money to finance these massive, massive elections.

Yeah, well, I don't shy away, Einar, from saying This system is corrupted to its core. Simple as that.

But it's legally corrupt.

Wow.

If other countries did what we do, we would be all over it. This is terrible. What on earth are they doing? They're ruining democracy. But if we do it, my goodness, this is in the greater good. This is American exceptionalism. There is nothing, absolutely nothing that we do that cannot be justified by the greater good. And, you know, children have to die, bombs have to be sold, whatever it is. You know, countries have to be democratically elected, countries have to be undermined, and, you know, new governments put in place. This is all part of a greater plan, and people should thank us for this rather than criticizing us. And I'm being facetious, but, you know, the fact is it is sick. The idea that whenever Washington does something wrong, What do they do? They turn around and point to somebody else and say, oh, look, you're doing something wrong. It's the exact same thing they're doing. I mean, this thing about spying, the US budget for spying is the third largest military budget in the world. And they keep talking about other countries spying. We spy more than all of them combined. Plus we have the Five Eyes, although for how long, I don't know. Four of them seem pretty not pleased with the idea that they're not trusted economically or politically or militarily, only to buy stuff, not to actually participate. So at this point, I mean, the US is just locked in this unending stream of hypocrisy. And it is not only poisoning the well within the United States, it is also poisoning the well internationally.

For sure, for sure. The adage still understand, when Washington does not like the message, it tends to shoot the messenger. That's why I always think in that way. Well, this is why a good friend of mine, uh, mine, Einar, sent me this picture here. I want to share it with, with the audience here. So the expectation that Donald Trump is expecting that Mr. President, rather, Xi Jinping, is going to give him a call— I, I argued this when he started imposing these tariffs. I said China will not back down this time around because China is in a different position. And I think Washington didn't get the idea for the reality of it.

So, well, it's more than that, David. I mean, China put itself in a different position. You know, 8 years ago, they were surprised. I think the rest of the world was surprised too. And, uh, but you know, the difference between China and many other countries is that they have a long-term planning process. They put this all into the hopper and they said, okay, what is it that we need to do to protect our country and our people and our economy from something like this happening again? Because we don't want to be surprised again. Uh, they just couldn't believe, you know, that Donald Trump would do the things he did during his first term, which are really a repeat of his tactics today. You know, releasing these white rabbits, as I call them, you know, where the press chases after whatever he says on a daily basis because it's so outrageous. Just to make sure people don't start looking at what he hasn't accomplished, everything he's broken but hasn't fixed. So, I mean, China said, look, we understand this guy now. Now we have to figure out how to protect ourselves. So this isn't something where, you know, just, oh, organic growth happened and China's in a better position. This is China making sure that it's protecting its people, I wish the United States had done the same.

Yeah, well, that's why the US is shocked now by the response of the Chinese. Let's move on into talking about President Xi Jinping's trip to Vietnam, Malaysia, and Cambodia soon. So I'm thinking, is this a loud message to the Americans? Because already Donald Trump is criticizing the trip. And I'm like, what the heck is wrong with you, Donald?

You know, I don't get it. Well, well, no, no, but listen, listen, Donald would be playing golf except he's waiting by the telephone, okay? The idea that he would actually go out and, you know, talk to some of his regional neighbors, try to reassure them that, you know, the US has a plan that they should understand, and you know No, that's not in his thing. He likes to sit in the White House and send out, as I said, these little white rabbits for the press to chase. What has he done? He's alienated 180 countries with his tariffs, and since then he's been pulling the switch on and off so that nobody has any idea what to expect in the future. Unsurprisingly, business is pulling back. They don't know what's going to happen, but they're pretty certain that Donald Trump is not going to be here for the long term. Has happened. He's ruined his own nest. Where is— what is Xi doing? You know, as opposed to the chaos that is happening in Washington, as you know, they're looking towards a recession, if not a depression. All right, you have order. You know what, Xi Jinping is communicating with his neighbors, he's visiting them. And this was long-term, you know, unless somebody wants to say that 75 years ago, you know, the Communist Party of China knew that, uh, you know, a visit to Vietnam would be useful, so they timed it that way. It's nonsense. China and Vietnam have had relations for 75 years. These are always marked by big ceremonies, visits, acknowledgments, uh, you know, more agreements. There are over 40 of them signed. So this was— has been a long-term thing coming. ASEAN is the most important trade partner today. It's the number one, and it continues to grow. It's covered by RCEP, Regional Economic Comprehensive Partnership. And this is where China's going forward. So you see this regionalism, which China is championing. He went to both countries and said, look, we're good partners. Let's look at the last 10 years of what we've done. We've helped you improve your infrastructure. We built roads and railways. We haven't subjected you to, you know, unreasonable demands about how you should run your government. We leave that to you because that's your country, your sovereign nation, your people, and you have to decide how to do that. We've seen what happens when well-intentioned ideological nations decide to sweep in with the military and break the country on the theory that they're somehow fixing something. So yes, China is reaching out, they're communicating well. Washington descends into chaos, and it is a real, real sharp delineation, a comparison that the world is making. Here's somebody who's reaching out and wants to talk about trade, a golden age for everybody, not in a golden age for one country. So you, you see the exact opposite. As China opens up, the U.S. is closing down. Obviously, this is having a huge effect, uh, internationally. We've seen what, uh, you know, von der Leyen— my goodness, she's never had anything good to say about China. Then all of a sudden she says, oh, it's a very important relationship and we're going to continue. But that goes to show how far things have gone when you have died-in-the-wool anti-China hawks out there now singing the praises of economic relations.

Well, this is why I didn't get— I didn't understand, literally, it didn't make sense to me what Donald Trump said when he said he dismissed the Chinese president's visit or tour of Southeast Asia as a deliberate effort, and I quote here, as a deliberate effort to screw the United States. I was like, what the heck is wrong with you? You know, I mean, it's not even the language of a president to be talking like this. And to me it didn't make sense.

Well, well, yeah, but how much of his stuff he says does make sense? I mean, his economic policy doesn't make— as I said, this is what I would— his economic policy is what I would expect if I, if I assigned a basic problem like this to an 11-year-old., and he could scratch it out in crayon. In Trump's case, it would be a Sharpie, which always has an interesting connotation in China because Sharpie sounds very much like something else in the Chinese language. But in any event, putting the levity aside here, the fact is that Donald Trump doesn't have a long-term plan. Let's put this in concrete terms. At every stump speech that he's made, Donald Trump has talked about how he hates Obamacare, how he could come up with something beautiful. It was going to be wonderful. The public saved money. The public will be covered. Everyone's going to love it. So just prior to this last election, he was asked a softball question by one of the acolyte stations, Fox or the other one, and he said, "Okay. So Donald, What is your, your plan for healthcare? His response, well, I have a concept of, uh, ideas. All right, 18 years later, he has a concept of ideas. And you, and you, and look up, let's look at the international stage. All right, he goes to Kim, writes these love letters back and forth. He has a meeting, he jumps back and forth across the line. All great optics, right? Except when she, when young Kim shows up down at Singapore and says, okay, what's the deal? Donald Trump said, deal? I was just hoping you'd get rid of nukes. Yeah, good luck. Young Kim left ahead of schedule. He had nothing. So this is the thing. He loves soundbites. He loves judging people's reactions, but he doesn't really have a plan. There's no end goal. In real estate, it's very simple. It's just deal by deal. That's not how you run a country. Countries go on supposedly forever unless you really screw it up like Donald Trump is doing, and then you threaten its very existence internally, uh, by the divisions that he's causing. Um, yeah, you— it's, it's something that is supposed to be continuous. You have to think about the future. You can't just go around screwing people I mean, and here's another example. Donald Trump is always about screwing anybody he can, for whatever he can. So what does he do? He turns it around. Oh yeah, China's just trying to screw me. A thief always believes that everybody else is a thief or a mark, right? All right. Criminals, I always believe that other people are just criminals, but they're smarter because they take stuff first. They're all just trying to get even. They all talked about how they've been victimized. I was a— I was in the prosecutor's office for a year as an intern, and I also— in the— as a defense attorney for a bunch of years. And I tell you, the one commonality between all criminals is they would always tell you that they were the victims, that they had somehow not gotten what they deserved. Life had been tough. Whatever. Mom didn't like me, you name it. They had a litany of excuses a mile long. And I've always said to myself, I don't trust people who claim that they're victims. I mean, if you're a genuine victim, yes. But if you're walking around all the time saying, you know, it's not my fault, I've been hosed over by everybody, you know, as Donald Trump does, I would never do business with them. I don't trust them. These are the people who will cheat you, Why? Because they're just trying to get even. And that is exactly what Donald Trump is preaching to the American people and telling the world. I'm going to screw you over because I can. I'm trying to get even. America, the most powerful, richest nation on earth, has been a victim of these horrible countries who can't even feed their people. This is disgusting.

It is disgusting because, you know, I walk around and I see see where things are headed here in the US. The level of poverty, people living under bridges, you know, and we call ourselves the richest country. So we call it as is. So I'm gonna play a clip here from, uh, uh, President Xi Jinping. I do have, by the way, Einar, I do have some of my viewers who speak Chinese fluently, so I'd like to share this clip quickly and have your take on it. Please take a listen, guys. Let me share it here.

Earlier, Prime Minister Anwar and I had a cordial exchange. We reached a number of important common understandings on taking our broad cooperation to greater depths. In the face of shocks to global order and economic globalization, China and Malaysia will stand with countries in the region to combat the undercurrents of geopolitical and camp-based confrontation, as well as the counter-currents of unilateralism and protectionism. And together, we will safeguard the bright prospects of our Asian family.

Wow, wow. Let me stop this one here. Very, very interesting statement, Einar. What do you make out of that statement? What is the message that President Xi Jinping is really sending to not only Southeast Asia, but to the rest of the world for that matter?

China is a good consistent partner who believes in a win-win situation. I mean, what else can you say? This is consistent. This is not a new message. This is Donald Trump— I mean, Xi Jinping affirming what he has been saying for the last 10 years. Consistency counts. Hypocrisy is no substitute. China has clearly said that this is going to be a regional situation and they would like to see it go worldwide. I mean, I think if I was asking a question right now, it would be what happens next? I look at the WTO right now. US hasn't paid its dues. It's not interested. It's preventing any appellate judges from being appointed. There are zero appellate judges now. You need 3 to hear an appeals court, any appeal that is made to make it final. They basically have shut down the WTO in terms of its ability to make clear, concise rulings. And they haven't paid, as I said. I mean, so why are they there? It would be nice if the US just simply said, we don't want to be here, and we're leaving. That would allow the WTO to have a real chance at reforming itself and being part of a world that wants trade. You go around the world right now, and you talk to every country out there, and it says, do you want trade or not? And they're all going to say, yes, we want trade. We want fair trade. We have to talk about tariffs. There are things that developing countries need to have tariffs to protect small industries. They don't want to be overwhelmed by larger industrial complexes who do it. They want to nurture their industries the same way that China did. But the idea that developed countries are using tariffs as a bludgeon to extract value from smaller countries is just anathema. The WTO could be the answer to that. In the absence of the WTO, and by the way, if 3/4 of the WTO simply said, United States, it is time to withdraw, or they said, look, we are now going to have votes on putting appellate judges in, we are going to change the rules, Three-quarters can do that. Well, two-thirds can. Um, and then they can change that. I would guarantee you Donald Trump would quit in a huff and this would probably be the best thing in the world because it would be reformed just like TPP. I remember that, uh, this was, uh, started by Chile. It ended up being adopted by the US. They put in all of these provisions that were protecting just American tobacco Pharma, technology, all these things, all their industries. When the US pulled out under Donald Trump, what happened? Well, TPP became TPP, TCTPP, and it reformed. It became something that was viable and has been quietly operating very well. And if the US wants to rejoin, fine, but the rules are not going to change the way back to what the US had. And this is an example of what WTO could be. But in the absence of real movement there, I think you're going to see increasingly a move towards, you know, looking at what the BRICS+ can do, because there has to be some sort of regional order or you descend into chaos. And that's right now what all the countries except one in the world wants.

Very, very interesting. We're going to get into BRICS in the next segment here, but I want just to follow up on this speech by President Xi Jinping, because the way I read it, besides, you know, reaching out to ASEAN countries, because when you consider ASEAN countries or ASEAN economy, it's very, very strong in comparison to some other blocs. And to me, it was like a hint of, is there possibility that China has alternatives? If the US will think they want to close the market, you know, what if there will be a free trade between ASEAN and China? Or what if China will say to ASEAN, you have access to our markets? And that's the way I'm reading this. Will I be wrong in reading it this way, Einar?

Well, it's already happened. I mean, ASEAN is China's largest trade partner. I don't know how else you can add on top of that in terms of lowering tariffs, China has been. They now have access to government procurement. The negatives list has been reduced and is expected to be eliminated fairly soon. So China continues to open up, not only to ASEAN, but other countries throughout the world, whether South America, Middle East, or Africa. And that's the major difference here, that this idea that there's going to be a super power created by ASEAN and China to try to create a bloc that can rule the world. No, that's American thinking. That's colonial thinking. All right? And this is something that people have to understand, that you can't assume that all thinking is alike. America, we think as an empire. We solve our problems by taking stuff from other people. People. That's what we've done. I mean, we took land. I mean, we had wars to get what we wanted, and that's how we go forward. It's the way we think, right? Have a problem, take it. You know, the solution is to go get something from somebody else by hook, crook, buying, or just simply taking. China is different. They believe they have enough problems with inside their borders. What they're concerned about is keeping peace around, uh, their country so that they can trade. And, and that's, that's what the message is to ASEAN, is, is let's go forward on this idea that there's a golden age for everybody, not a golden age for the United States at our expense. I mean, how can anybody in the world, any country or leader out there, believe that they can say, well, yeah, what we have to do is support the United States because they need a golden age because they're not rich enough You know, and they're not powerful enough. The military needs more money. And despite the fact that we're impoverished, we can't feed ourselves, we have our own issues, we should really be supporting the US because, well, maybe, maybe it'll all work out. I mean, once again, facetious, but I mean, it's just, it's nonsense. Can you imagine leaders going through this? And I'm— there's a lot of resentment being built up here, and it's not a question of question of left or right, it's a question of all of them.

And, and the country that I can think of fits this profile is Philippines, because what I'm seeing Philippines is doing, it's exactly what you just described, uh, Einar. And, and sad to say this, but I, I wish the government there in Manila understand what are they digging themselves into. Uh, I want to go back to one particular, uh, point to highlight is exactly the economic aspect that you mentioned. When considering, for example, China and Vietnam signed about 40— based on what I read, 40 to 45— a memorandum of understanding. And this has to do with trade, roads, railway, industrial parks, and so forth. Same thing today, President Xi Jinping and the Prime Minister of Malaysia, Anwar Ibrahim, witnessed the signing of about 30 MOUs. So I don't know what type of agreement is going to be with Cambodia on Friday. So I'll be waiting to see that one. So with this— Yeah, but yeah, go ahead, Einar.

Well, what I want to say with this is, I mean, this is not some sort of carrot that's being thrown out there. This is consistent policies. It's not— this isn't the first time they signed 40, uh, I mean, this has been going on for the 10 years. This is the Belt and Road Initiative, all right? And this signal here isn't that China is changing direction, it's that China is going forward consistently, that it is following exactly what it did 10 years ago, that it's trying to improve its responses, it's trying to improve its ability to work with other countries, and it will continue to do so. Very marked contrast to what's happening in Washington under Donald Trump.

But will countries in ASEAN understand that reality? Because some of them get like froze when Donald Trump imposed taxes on their countries.

Yeah, of course. Yeah, but they're smaller countries. All right. Of course, they're going to be afraid. You know, here's the difference. Yeah, the US says you're either with us or you're our enemy and we're going to punish you, right? China doesn't say that. China has not once said to any of these countries, if you deal with the United States, you're on our wrong side. China doesn't try— isn't trying to isolate the US. The US is isolating itself, all right? There has been no demand, as Washington has been pushing, telling countries All right, you have to stop trading with China. I mean, they've said that. That's a precondition. They want Europe, Canada, everybody else to basically stop trading with China. China's not saying stop trading with the US.

US.

It would never be part of the things. Why? Because that's an internal matter. Now, there is timidity. No one wants to get on the wrong side of the US. They don't want to be in this situation where they're, as they say, when elephants fight, The grass gets trampled. They see themselves as grass. I can understand their feelings, but are they in their heart of hearts cheering the fact that they have a champion who's willing to stand up to the playground bully who's trying to take their lunch money? Mm-hmm. Absolutely. And they should be thankful. And in their heart of hearts, they are, but they say, well, from a country perspective, we have to be moderate. We have to kind of disengage and balance. What we have, because we can't afford to earn the ire of Donald Trump, because we've seen what a vindictive, nasty person that he is. We've seen it on a personal level. We've seen it on a political level. I mean, here's a guy who's literally firing everybody who was involved in a case against him simply— they were civil servants. They were doing what they were told to do. They were doing their— fulfilling their function. Never mind the fact that he is a convicted 43-count felon. All right, he's firing them all, and he's willing to do the same to countries. He's nasty. All right, I love the fact that he always calls other people nasty because he's as nasty as they get.

That's usually how, uh, sometimes it's a reflection of somebody's behavior that is reflected on others. That's, that's funny you said that one, I know, because it's true that there are some people like that. Yeah, when you consider, but again, I'm still stuck at this point of ASEAN when I think about a country like Singapore, knowing the importance of Singapore, the significance of Singapore, even though they've been, tariffs have been imposed, some of them, they didn't say a word, they didn't react to this.

Well, no, I beg to differ. I listened to the PM Wong's speech. I thought it was very clear. He said, you know, life has changed, the US has changed it. And he didn't say it was for the better. But as a nation-state, very small, they know for a fact that if they made a move against— perceived move against Donald Trump, Donald Trump would bring everything in his power to crush them. All right. He has a responsibility to his people. And I understand that. But I think he went as far as he possibly could in identifying the fact that the US is the culprit who was changing all the norms of the world and disregarding the international rule of law in order to assert an American order.

Wow. Yeah. So I guess they're going to have to wait 2 or 3 more years till Donald Trump is gone anyway. So let's, let's go back to BRICS here for a moment. And I want to ask you a question about the future of BRICS, the role of BRICS in this changing global economy and the geopolitical landscape. What I mean by this is, when we see, in your opinion, Einar, when we see the power of BRICS turns into a hard power, if its economy surpasses that of, let's say, G7, for example?

Well, it already has. I mean, with BRICS+, it is now Slightly above is my understanding. Yeah, uh, some people say it's slightly below, but the fact is, look, let's look at the trajectory, all right? G7 is going to be completely irrelevant. They're, uh, start looking at their growth, uh, numbers, all right? We're all down in the zeros to 2%, some of them negative, all right? And as that goes on, uh, they lose more and more clout. Whereas if you start looking at BRICS, which are developing and middle country countries, they have healthy growth GDPs. And as a result, they will continue to climb. So you have to, you have to look beyond what's the— what's happening at the moment to seeing where the trend lines are. And they're very, very, very clear as to what's happening. Now, there are, you know, the BRICS are not a panacea. First off, they don't even have a permanent secretary. All right. They are basically hosted, you know, by country to country. Who's in charge of putting together an agenda. Now, the BRICS Bank, the New Development Bank, has been successful despite all the naysaying that was coming out of Washington. It's too small. What I mean, this is a side— what I loved is I saw a comment and it says, when BRICS first started, they said, well, you know, these countries are, are nobody, it's too small, no one will care about them, right? Then as it expanded, now the story is Oh, they're too large. It's impossible for them to do anything. So this gives you the idea, you know, the clear things that it doesn't matter what BRICS does or anything involving China, it's always going to be a bad idea. So, yeah, I mean, BRICS has a potential, potential, but if it's going to solidify what it has, it's going to have to have a permanent secretariat. It has to be more organized. Growing is wonderful. But you have to have some basis for that. Uh, and what I mean by that is there has to be a common ideological base. And I don't mean political ideology, I mean something like what China has been proposing, that the basis of everything that happens on the global scale through BRICS is all about maintaining security of countries, helping them with a development trajectory, and respecting their sovereignty, something that Washington has no concept of. They think everybody, everything and everybody belongs to them and is just a useful idiot if, if they can be harnessed. BRICS is quite the opposite. These are smaller countries. The vast majority were subject to colonialism. They're not interested in going back to that system. It didn't work out for them, let's say that. So at this point, BRICS has a great opportunity. Uh, it's still a while in the making before they come up with an alternative currency, and I don't mean alternative in the sense that it'll take over where the dollar leaves off. That's simply something that says, okay, if you don't want to deal in dollars, here, here's some other, um, options for you. This will be very attractive, uh, to many countries. China is going about it slightly different way. And I'm talking about the, you know, trade currencies. They're doing currency swaps. That has a certain amount of limited, uh, you know, it has certain limits to it. Having a free-floating convertible international standard for trade transactions would be preferable, but that takes time. It could be speeded up though by Washington's antics. You know, we've talked about how the bond markets could really sink, um, faith in the U.S. system would go down, and then there isn't a choice. All right, people will turn to BRICS and they'll take whatever is, uh, can be put together on a temporary basis and then grown because they don't have a choice. They don't want to put their money into something where they lose 30% the moment they do it.

Well, there's already a fear now in the United States about the the trust from investors from outside putting their money inside the US. So I'm already hearing some that I talked with already mentioned to me that, yeah, there is this conversation quiet, and even in Wall Street they are very concerned as to where things are headed. So there is this fear as to where things might be going regarding the financial aspects or the health of the financial health that is—

okay, it's not quiet. First off, the people I talked to and the people I've watched on television, it isn't quiet. They've said, you know, you have leading lights who are saying recession. I'm afraid of, you know, the other thing. And no one's mentioning it. It's like Voldemort, you know, don't mention depression. All right. Because people are— that would lead to a real panic. But this is what we are facing. Everything that Donald Trump does to push inflation, undermine confidence in the business, international business, depreciating the dollar, this leads to a cataclysm, a downward spiral, where the US goes into a depression and drags the rest of the world with it. And there's very, very little to say that that isn't going to happen, because Donald Trump is already halfway down the slope because of his antics in pushing that result.

Yeah. Yeah, this is why— well, I'm concerned about it, Einar. I'm concerned.

You should be.

Yeah, because what I'm seeing is, you know, you kind of— even the investments, you think about what's going to be happening. A lot of people are starting to— it's concerning. It's really, really concerning. Now, could this explain at least why the Europeans— and I know the Prime Minister of Spain is leading the charge now towards moving the EU towards China. I just read this morning, you know, will the EU go long, or is it just window dressing, in your opinion?

Well, I mean, I can tell you, European ambassadors I meet on a regular basis are pretty— they're always like, well, you've got to do something about Russia. All right. And that has been the bottom line for the last— since the Russian situation came about. They weren't particularly supportive during COVID although China was very supportive in terms of making sure that they had, you know, the personal protection equipment, PPE, there. It just somehow didn't count. And, you know, from many perspectives, and we've talked about this many times, the idea that Russia keeps telling you, you made a promise not to come into the Soviet Pact and you've broken that promise. And at some point there's a red line you cross. And they said the red line is Ukraine. And every single legitimate US and European statesman said, do not go into Ukraine because it's not a question of if the Russians will fight. It is just a question of how hard and, you know, what happens afterwards. There was never any question. And you can— whether you're talking to statesmen like our Henry Kissinger, all across the board. No one had any illusions about that. The fact that they went in in 2014 caused a change in the government, which was seen by Russia as a putsch, and then the start of these actions, military actions that have led to carnage and tragedy. Now, I'm not saying there are any heroes in this fight. There aren't. There's zero. Like Hamas and Israel, there are no heroes in this. All right. Terrorist actions by anybody are terrorist actions. Causing a war is causing a war. It doesn't make you a good guy. So, you know, as you're talking about it, I mean, I'm digressing a little bit, but, you know, this, this issue about Europe is they say it's about values, but all of a sudden it's not about human values, it's become about economic values. They don't really have a choice. They talked about India, but I think they, they understand that that's a long-term project. During the short term, some sort of cooperation, at least détente economically with China, makes the most sense. And, you know, when you have somebody like von der Leyen who has never had anything nice to say about China, has been vitriolic to the extreme as a China hawk, saying, "Well, we value the Chinese relationship, and this is something we'll never give up," and all this type of stuff. You know just how far, all right, Europe has united in this situation of turning against it. Now, there are— it's always going to be hard to bring everybody together. Within the EU, you have, you know, 26 different ideas about what should be happening. But right now, Donald Trump is doing his best to unite them. And, you know, the only thing he has is— could have had was Ukraine. But that's— that is kind of flown away. Although there are some who have taken the Russian side or at least sympathetic to it who applaud that. Most of them do not. So they're still divided, but they have no choice is what it comes down to.

Well, for Ursula von der Leyen, I never trusted her anyway. Same with Peter Navarro. Both of them are—

because, yeah, yeah, but Peter, Peter Navarro is basically stupid. And, you know, I hate to say something like that on air, but, you know, when you go, go back, please, anybody who was questioning what I say, go back and listen to this guy and his word salads. He does not make any sense. He was picked by the president's son-in-law because they could not find a legitimate economist who would do it. The people who gave him his PhD thesis, they said, gee, we did not think he would do any harm. He really was not up to snuff, but he did not seem like a bad guy. Ideas were kooky, but, you know, there's, there's room for debate in all areas. But they, they would never have given him his PhD had they known of the kind of nonsense he was pushing. But he's not alone, you know. Peter Navarro is the one you see, and he's the one who's going to be fired. But behind him you have this Robert Lighthizer. He's the architect. He's smarter than Navarro, but I still think that he's completely deluded, this idea that he can devalue the US dollar, coerce companies into the US, and somehow this will usher in a golden age. So yeah, I think so. Von der Leyen is different. She's an ideological warrior. She's a descendant of the Junkers. The Junkers were the German military aristocracy. Nothing— there was nothing that couldn't be solved by a good little war, you know, bloodshedding is what we do. And, you know, she's inherited this tradition. She is, you know, fiercely nationalistic. She feels that, you know, any threat to Germany is things that, you know, she would have loved Metternich, you know, the rise of Germany creating an empire, and it's not there. But even when she turns this dramatically, this really tells you just how how far, uh, you know, Washington has strayed outside the path and how isolated it has become.

Yeah, well, for sure, I know that's, uh, that's very, very concerning. I mean, I've been reading this morning that some here are stating now that the Chinese economy is going to collapse, and I was like shaking my head. How pathetic. I mean, they really— there is no—

I, I have a great story about that. I met the guy The guy from The Economist who started that, the America collapse thing, he was the one who put it on first year, this is the year that China collapsed. That was, I don't know, 25, 30 years ago. Ever since, every year, The Economist has said, this is the year that China has collapsed. They're never right, but they're never in doubt. This is what's funny. Washington is cocooning itself. They're trying to say, "Okay, how do we protect ourselves? Well, we're failing, so what do we do? We accuse others of failing." It's the US is having problems right now. China announcing 5.4% first quarter growth. I don't know. I'm just saying that that's not failing. Now, a lot of that has to do with the fact that people have speeded up their orders in order to avoid the tariffs and this kind of thing, but the fact is, Chinese factories are running at a time that US factories are not able to get the job done, period. So, you have a real contrast there. That is not going to go away. US, who is going to invest? If I say to you, look, would you build a factory in the United States? The future is completely unknown. We want you to invest trillions of dollars, in creating this factories, a series of factories. It won't be a complete supply chain because you'll still have to buy some stuff from overseas because we can't— I mean, it would take tens of trillions of dollars to develop what the 30% of the world's— to mirror the 30% of the world's goods that China makes already. All right. So, you have uncertainty upon uncertainty, And then you have political uncertainty. How long is Donald Trump going to last? How long are his policies going to be enforced? What are the chances that the next politician who comes into the White House is going to reverse everything that Donald Trump has done, just as he reversed everything that Obama did? Biden tried half-heartedly reverse what Trump did, and now Trump reversed whatever was left of what Biden did. I mean, Is that planning? Every, every 4 to 8 years you completely reverse everything that's going on. You know, you can't run a country that way. The American people are dissatisfied. They voted for Donald Trump because he's a populist politician who said he could solve things. Well, right now they're getting a dose of medicine. He isn't solving anything, he's breaking it, and he's not fixed one thing. You tell me what he has fixed. All right. Oh, yes. Immigrant— immigration numbers are down. But when he starts getting rid of all these people who actually work, the 15 million, either through self-deportations— I mean, the American economy lacks workers. It lacks workers that are skilled. It lacks workers who are willing to do menial jobs. All right. Who's going to do that? And if they do do it, they're going to demand a lot more money than the minimum wage or below, which was being paid to these migrant workers. Trump is the same. There is absolutely no thinking through. There's no endgame in Washington or for Trump. And that is the problem. So businesses will not invest in the United States until they have a greater sense that things are going to happen there. Quite the opposite. You're going to see more companies, as you already are, interested in China. Why? It's stable. It has markets. It has production. All right? What part of that, if you're comparing two opportunities, makes the US look better?

That's true. Spot on. Spot on, Honor. I have one question for you before I let you go, my friend. And this is from a good friend of mine in Singapore, and, uh, he— we had a conversation, and, uh, what he wants to know is this: as far as the future issue of China regarding population, what is the long term? How do you see this one?

All right, well, you know, traditional How would China— Let me back up a little bit here. I mean, traditional economics, all right, it was involved in the Industrial Revolution. They came up with this idea that you have to have population growth in order to have growth, right? Why? Because more people, they consume more things and things like this. Today, we live in a choice economy. Americans are 4.5% of the world, and yet they consume almost 20% of the world's output. All right, that belies this idea that you can have growth. Growth is a tertiary market industry. Once I have enough food, clothing, all of these things, once the infrastructure works, I can get to work, there's communications, sewer, water, all the things that are necessary to hold a society together, everything after that is about choice. Whether I buy a t-shirt for $1 or the same t-shirt with a logo on it for $100 is It's my choice. It's not a necessity. So the world is moving towards this tertiary economy where it's more about services and choices, design, and you see this happening. This is the digital revolution. So this idea that you have to have population growth to have economic growth, I would say, has been relegated to the dustbin of history. The underlying ideas behind the Industrial Revolution and how it worked are not the same as the digital revolution and how it works. So I think China will do well by having a smaller, more educated workforce. I mean, think about it. Donald Trump is getting rid of the Education Department. The US has 60% of the population reads at a 6th grade level or below. Let that sink in. In China, overall literacy is 97%. And this is including old people that didn't even have the chance to learn. But if you get down to kids under 30, guess what? 99.98%.

Wow.

So, you tell me who is prepared for the future. China is now, instead of getting rid of its education Education Department, they've doubled down and said, look, we need to get rid of popular but useless courses where Chinese students enroll and then aren't able to get jobs. They're saying that we need to emphasize technical education, because that's what a digital economy needs. It needs people who can build and service, design the robots and the automated systems that are out there, who can do the coding. These aren't things that are at the top of the list for most traditional universities. They're not saying to get rid of it. Don't throw the baby out with the bathwater. You simply balance it so that your ability to address the future, you have it because you've educated and you've massaged the system so that people want jobs. This is a funny thing. All the young people I talk to, they go to university. To university. Why? Because they can get a better job, have a better future. So yes, the government is trying to make sure that happens, while we in the US are quite satisfied that we only have 60% who can read at or below a 6th grade level. And we don't really need an Education Department that is trying to push higher educational standards or massage our economy towards a point where our people can actually be ready for the digital revolution that is already here. I mean, this is what is astounding to me. We are going backwards. We're sending the wrong messages. China's doing the— what I would do if I were them. It's the rational thing. Manage your economy, manage your people, help them. Don't destroy everything because you think that you'll save a few pennies. It's going to cost you more in the long run.

Well, that— for the example of the Chinese government working for its own citizens. I wish we had something like this. I would— I had a chance to go to China. I visited last time, and I was floored by what I saw. You know, I've been around, traveled around the world, and I can, you know, use my own assessments. But what I saw in China was beyond what I expected. And I was like, you know, this is when you realize a government that is working for its own people. Why aren't we having that here? But again, our system is done for anyway. I know I can't—

no, you know, David, look, I want to make something very clear. I'm an American. I was born in Washington, D.C. My family was an industrial family. We built submarines for— during World War II for the defense of the nation. All right, I'm, I'm disappointed by our direction, but the idea that we will fail, I, I don't think is true. We have tremendous resources. We just need to get back on track with this idea of what we do well. And what we used to do well was be, you know, leaders in technology and education, attracting people with this idea of opportunity. I really believe that there's room to go back to that and that we can, as a nation, go forward showcasing excellence instead of trying to coerce other countries to give us stuff.

Yeah, but the problem, Einar, I mean, we don't have things thinkers. We don't have individuals who can strategize for the next 30, 40 years. We don't think in these terms. We think in terms of the next—

That's the system. Yeah, but that's, David, that's the system. I ran elections. I told you that. All right. To be elected, you have to have a certain flexibility, as I'd say. All right. Because in order, even at the local level, in order to get elected, you have to make deals with the unions or business groups or both or whoever you can in order to get the amount of money that you need to push the issues that you think will get you elected. Do these people actually believe in it? I sometimes doubt it. I mean, I would tell them what they needed to say in order to get elected. I didn't hear a lot of pushback from them. You would think that a candidate gets involved because they have a vision for what they want to do. All right. I was often disappointed in that. I mean, at all levels. I wasn't running, but I was involved in national, state, and local. Local, I was running things, and on the state level also. But I mean, look, I mean, end of the day, it's the system. No one wants to be involved in this kind of dirty, nasty stuff that Donald Trump throws around. Can you imagine? Marco Rubio, you're on stage, he calls your wife a dog. I mean, I mean, it's inconceivable. Who wants to take on that kind of things? If you are reasonably successful, all right, and you have vision, clarity, you do— you really— you might be willing to do it yourself, but are you willing to drag your family on the public stage and have humiliated, not by truth, but by simply, you know, awful people like Donald Trump, who's so nasty that he has to resort to these calling people fat and stupid and all this kind of nonsense. Here's a man who just has absolutely no decorum whatsoever, and he's always wondered why polite society didn't embrace him because he's crude.

That is indeed spot on. Well, Einar, uh, first of all, I'm gonna share with you guys, by the way, I'm gonna share with you if you want to follow Einar on X, Twitter, that is. This is his, uh, Twitter handle. I follow him on, uh, on, on Twitter there, and I have also his, uh, LinkedIn. I follow him there and I read his, uh, writings on LinkedIn. So make sure to check that out. So I'll give you a last word, my friend. Uh, where the future is?

Well, the future, I hope, is more rational. I mean, uh, remember, I'm a commentator. Um, you have to take everything I say with a grain of salt. I look at China because I've lived here for 20 years, and I've seen the rhetoric and the reality. I've advised 3 different governments on economic development. I've books on Chinese cities, governments, and their development. And what I like to see is it's not that China does everything perfectly, it doesn't. And do they have problems? Yes, they do. Every country—

it's like every country.

The difference, major difference though, that I've noticed between China and the rest of the world is that when China sees a problem, it recognizes it and it says, okay, how do we solve And then they do an exhaustive amount of work trying to figure out different scenarios for solutions. Then they, they try these solutions in small, you know, pilot projects to see how they work. They adjust it. And then when they feel confident, they roll it out nationally and in some cases internationally in terms of how they, they work with other countries. I think this is by far the best way of approaching things. Regardless of your ideology, if you don't have— if you fail to plan, you plan to fail. And right now, that is what's separating the US, Europe, China, and many of the countries in the world is this willingness to be humble, to reflect. I mean, have you heard anybody in Washington reflect, to talk about our failures? Never. Everything is just somebody else's fault. And, you know, I want— I need to get reelected in order to hold things together. China believes that it has a role in the world as a stabilizing factor, and I hope that works out. Will there be tensions and frictions? Absolutely. But that is the story of mankind. It's our human nature which is to blame, right? We distrust other people, and because we distrust them, we assume that they have bad intent. And that isn't true. We have to, uh, open our thinking a little bit and understand what— how we get to a better, uh, system of governance. Now, China and Asia believe that you operate by consensus. In America, we believe in the corporate model. I have 51%, I don't care I don't care what you think. I rule. I'm in charge. In Asia, it has to be really, really talked out so that everybody doesn't— it doesn't that they have to like it, but they all nod that this is agreeable. And this is a much more stable way of conducting politics and economics and culture than the US corporate model. That worked for colonialism because it was just a matter of who has the power. Today we have a reality that power is dispersed. We need to have a system that allows people to work together, not push people apart.

Well, here it is, guys, words of wisdom from my dear friend Einar. So I can't thank you enough, my friend, for coming.

Thank you for having me. It's an honor always, David. Appreciate you allowing me to spout off.

Oh, I learned a lot. I learned a lot from you, Einar. And you know me, I don't shy away from that, and I'm very, very grateful. So I look forward to having you again. So on behalf of the entire community, we say thank you to you. You take care, my friend.

You too.

Bye-bye. All right, guys, I hope you enjoyed listening to Einar. You know, a wealth of information, and he was kind enough to carve out time for us. He's a busy man. So because some of you has been asking me to reach out to Einar, and I, I promised you I will, it just— he's busy, and when he had time, he's right here. So we look forward to having him again. Remember to join me tomorrow for my conversation with none other than Warwick Pao. He will be here. Another— he's a good friend of Einar, by the way. So just remember to join me tomorrow, and we look forward to that. I want to say quick thank you to Juniper Lee Thank you for your Super Sticker, truly appreciate you. Uh, okay guys, I hope you enjoy your rest of your evening, day, whatever part of the world you're in, and I look forward to seeing you next time. As always, remember, geopolitics impact your daily life in more ways than one. Till next time, bye.