Part 3- Some Initial Thoughts about the Second Trump Presidency

In the previous part of this series, I made the point that Trump’s second presidential term seems to have far more popular support than his first time around. Whether this has something to do with the preceding disastrous and unpopular term of Biden, popular sympathy due to Trump’s mistreatment by the ‘deep state’ or both is a matter of personal opinion. Regardless, the rich and powerful are no longer embarrassed to be seen with him- as was strikingly obvious at his recent inauguration. While it is very early in his second term, Trump is on track to deliver much of what he had promised in the first 100 days of his second term. While he may still fail on some large issues, one of which we will discuss in this post, it is fair to say that the second term is going to be more effective than his first one. I also wrote that a lot of his bluster towards Canada, Greenland, Panama, EU, UK etc was predictable and is a combination of personal petty revenge and creating a legacy for people to remember him. And yes.. it is also about a failing superpower (USA) trying to rob from its vassals (Canada, UK, EU etc) on its way down.

With that out of the way, let us talk about one of the major areas in which Trump will not be able to deliver anything close to what he is promising and almost certainly believes himself. In fact, this post is about one of the areas where he could fail in a spectacular and catastrophic manner. In case you are wondering, I am talking about American trade and other relations with China- specifically his promise to make the balance advantageous to USA once again. While it is possible to write entire books about why USA is in a highly disadvantageous situation relative to China, I will try to summarize its gist in about 2,000 words. And let us be honest about something else, if Trump and his underlings screw up this situation badly, it would make other possible disasters during his second term look quaint by comparison. In my opinion, this is also one of the situations where the instincts, mindset and worldview of Trump and his underlings put them at an unusually high risk of screwing up. To understand that part we have first talk about the massive gap between self-perception and objective reality of the power balance between these two countries.

A large part of the reason why Trump and most Americans still think they can prevail against China is because USA was able to prevail against Japan in the 1980s. Of course, they also believe they are racially superior to the Chinese and everybody else- but that is a secondary issue. To understand why USA was able to (partially) prevail against Japanese corporations and manufacturing prowess in the 1980s, we have to talk about two factors- that era with its global power balance in comparison to today and contrast the capabilities of Japan with China. Let us start by comparing the USA of 1980s to USA of 2025. While widespread decay of USA, especially its industrial and manufacturing capabilities, was underway by early 1980s- the situation was nowhere as dire as what anyone can see today. It also helped that all the vassals countries of USA (Germany, UK, France, Japan etc) were still were still highly industrialized and relatively affluent compared to rest of the world. Also, the USA still had a decently large military-industrial complex that turned out more than expensive junk weaponry. In other words, USA was still somewhat close to its position in the 1950s and 1960s.

Japan, on the other hand, was (and still is) in a rather peculiar situation. While it had no shortage of very competent technologists, scientists, industrialists and bureaucrats which drove its very impressive post-WW2 reindustrialization- some basic facts about Japan had not changed. While Japan had a population about half that of USA in the mid-1980s, it lacked some very important things- starting with national sovereignty. As some of you know the American occupation of Japan never really ended after WW2, and continues to this day. In other words, on many important matters of state and policy, no Japanese government since WW2 has had real sovereignty. It also had no nuclear weapons, long range missiles or a large military-industrial complex of its own. More relevantly, at that time it had no large markets for its products beyond the West (dominated by USA). It should also be noted that while Japan dominated many sectors of technology and manufacturing, there were other areas it did not. The lack of natural resources in Japan added an extra layer of vulnerability. Consequently, USA had essentially the final say on Japanese government policies related to industrialization and economics. Threatening Japan to change its industrial and economic policies to stymie its future growth was therefore very easy- and explains why they had to sign the Plaza accord to formalize this capitulation.

And it gets worse. It’s European (Germany, UK, France etc) and Asian vassals (Japan, South Korea) are in the beginning stages of a severe demographic crisis in addition to a much diminished share of global manufacturing and industrial capability. The center of global industry had firmly shifted to Asia, especially China. It is also worthwhile to point out that GDP as measured in USD has long ceased to be a useful tool to measure real economic and industrial power- if that was ever the case. As things stand now, Western and much of Eastern Europe are on their way out and will almost certainly end up as quaint places that derive most of their income from foreign tourists. While there are many reasons for this slow-motion collapse of Europe, ranging from environmentalism to bureaucracy- the result is that increasingly European countries other than Russia do not matter- and this is a major change from the 1980s. To be honest, I find it hard to care about the downfall of a group of countries and people obsessed with delusions about their alleged moral and racial superiority.

Now let us talk about China, starting with a rough comparison of its industrial capabilities in comparison to the West. As things stand right now, China has more industrial capacity than USA + Western Europe and Japan combined. Moreover, this capacity is not restricted to some areas like Japan in the 1980s and covers everything from the manufacture of computer chips (new and legacy) and space launch capability to making bulk chemicals, shipbuilding and making plastic trinkets. To make matters more interesting, China now manufactures most of the machines and tooling used to make machines which make products. Their ability to make major inputs for industry and building such as steel, concrete, many other metals and alloys dwarfs the rest of the world to levels hard for many in the West to believe. They have the engineering and manufacturing capabilities to build entire large cities and other massive civil engineering projects with a few years- something which no other nation has yet demonstrated on that scale. It also helps that their systems of governance and administration are demonstrably superior to anything in the West.

While many in the West still have this image of Chinese factories as sweatshops stuck in the 1990s, that nation has automated and robotized its factories far more than rest of the world combined- to the point that Chinese manufactured products in many areas are less expensive and superior to those made in the West. It should be noted that R&D in China (academic and industrial) has also expanded by leaps and bounds in past three decades- to the point where they are either at the cutting edge of technology in many areas or creating new areas. More relevantly, unlike Japan in the 1980s, they have a very large internal market as well as a large non-western global one in addition to the West. Having 1.4 billion people, over a thousand nuclear weapons capable of reaching any point of earth and an independent foreign policy also helps. In 2025, China not USA is the major foreign trading partner of most countries on this planet- and for good reason. To summarize, China in 2025 is a very different and a much more formidable opponent than Japan in the 1980s- at a time when USA in 2025 is a shadow of what it used to be in the 1980s. So how all this play out in a USA-China trade war?

The short version is that any real USA-China trade war will be end in a humiliating defeat and long-term damage for USA. The longer version is as follows: USA as it exists in 2025 is a heavily financialized and increasingly dysfunctional system without the physical infrastructure and institutional memory to become a manufacturing power once again- at least in its current form. USA then spent three decades after end of cold war antagonizing many people and nations across the world- including its alleged allies. Its much publicized armed forces cannot fight real wars or even prevail against para-military groups such as the Taliban and Houthis. USA is also almost totally dependent on China for a number of essential products such as chemical precursors and equipment for the synthesis of drugs, diagnostic reagents, agricultural chemicals and other industrial chemicals to name a few. China dominates the production of legacy computer chips and other components required to build almost any computer or electronic device. Even a significant percentage of the components (materials, mechanical or electronic) for weapon manufacture in USA come from China.

All of this is my way of showing readers that any real trade conflict between USA and China would end very badly for the former. But what about a military conflict? Well.. since a nuclear war is not winnable by either party, we have to consider a conventional conflict. Given the nature of geography, any conventional military conflict between these two countries would be on the borders of China (specifically near its coast) and far away from USA. In such a situation, China would have a colossal advantage in logistics and industrial capability and given the types and numbers of weapons it has developed, the outlook for USA would be pretty bad- and that is before Russia stepped in to help China (indirectly or directly). Even a naval blockade of oil shipments from Middle-East would end badly since China has friends in that region (Iran, Pakistan) as well as an independent capability to target and destroy American bases and naval assets from the Persian Gulf to Malaysia and Philippines. The situation about the nuclear arsenal of China has been previously discussed. In summary, USA will suffer a very humiliating and damaging defeat against China is any serious trade or military war. Such a turn of events would, if anything, speed up the dissolution of American Empire. Whether Trump and his underlings understand the gravity of the situation remains to be seen- but it is clear that most Americans are still living in la la land.

In the next part of this series, I will go into how Trump’s attempt for a resolution of the Russia-Ukraine war might also end badly and with considerable humiliation.

What do you think? Comments?