Why is Trump scared about the trade situation with China? Is it the robots?
Back in World War Two, America put 16 million soldiers into uniform and sent them to the front line.
They couldn’t do it again.
Well, back then, America had a solid textile manufacturing sector. Gear that sector into overdrive and you can produce the millions of uniforms necessary.
These days, there’s no textile sector, just like there’s no textile manufacturing in Australia anymore. In fact, that sector was one of the first to be completely ‘off-shored’.
And so if America wanted to put sixteen million soldiers into uniform, it would need China’s help.
And that’s great if China is on the same side.
But what if its not?
Trump's questioning the whole free-trade edifice, and in the process copping the usual criticism from people falling over themselves to label him a racist.
But what I think he’s realised is that the whole-free trade fantasy is based on an idea of enduring global peace.
It’s fine to send all your vital industries overseas, because, hey, they’re our friends, and of course they’ll sell us what we need.
It’s a lovely ideal, but it is a little crazy.
In the early days, the free-trade mission was advanced by trading blocks – groups of like-minded nations who were already closely bound by ideology.
Take Australia and New Zealand for example. There’s no danger in NZ letting us produce dairy and sheep because of course, we would help our cousins out if they needed it.
(Until we hollow out their economy and conquer it in the name of the glorious Malcom. Buwahaha.)
And as nation-level conflict went out of fashion, and local businesses realised there were some sweet profits to be made, the circle of free trade expanded.
But then along comes Trump, who love him or hate him, is less beholden to big business than any President in living memory. And he looks at this, and says, aren’t we making ourselves just the teensy bit vulnerable?
He’s probably looking at this chart here.
And that chart says that the trade deficit with China is freaking massive! Pretty much more than all the other countries combined.
Are Americans ok with that?
Because what it represents is a massive export of wealth. Even if you’re just printing the money, it’s got to become real somewhere, and even if it’s just a claim on wealth, all those claims are currently being sent to China.
How does that end? How does it end well?
But the free-trade ideologues sponsored by the various big business councils would say, hey, no worries. When countries have shared economic interests, peace follows.
But what if China’s economic interest is in eroding America’s economic base and ultimately replacing it as the dominant global force? That’s not such a peaceful scenario, Pollyanna.
But perhaps we shouldn’t be too worried. It’s not like China is amassing a robot army.
Oh no hang on, they are.
Global Stock of Robots
This chart says that China has more robots than the rest of Asia combined! Ok sure, those robots are more likely to be car automations than killer-drones, but that’s just the point.
Right now, America is exporting a huge amount of wealth every month, with which, China is building incredible productive capacity.
How does that possibly end well?
That’s what’s keeping Trump up at night.
Such a racist.