Quote:Interesting article as always. But, Pepe overlooks a detail: the US attacked both ZTE and Huawei, because they were vulnerable: they used US tech, albeit without technology transfers. Which means they could be destroyed by refusing them access to the US parts on which their products depend. With most US/Chinese companies that isn’t possible, because of the compulsory technology transfers. If the US portion of the company pulls out, the Chinese part of it still has all the tech knowhow. Talking of foresight by the Chinese leadership when they made these rules! Which is of course why the US complains about those technology transfers and wants them to stop and why Xi stays silent about such specifics in any trade agreement, especially now that the US is destroying Huawei. Trump of course wants Chinese companies that are vulnerable because dependent on US parts that can then be denied to extort concessions and he wants joint companies where the US part can walk out at any time, leaving the Chinese part unable to continue due to licensed tech without tech transfer.

The goal of the US is to subdue Russia and China under US hegemony, no matter how long it takes. War is really excluded as both Russia and China can obliterate the US homeland. Hence Trump’s insistence on a trade deal. It has nothing to do with the deficit - the US knows that too that they have to compensate for that with increased exports not just to China, but to anywhere in the world. The deficit is the cover, destroying the Chinese economy and technological breakout capacity is the real cause. Hence Trump telling Xi he couldn’t have MADE IN CHINA 2025.

Like with so many things, Trump gave away the US cards. The Chinese tech community is at work feverishly to develop an independent operating system for Huawei phones, their own 5G chips - their 4G chips already are as good as Apple’s! - and the tech parts they so far imported. And no matter what “concessions” Trump agrees to make, Huawei will not rest until they are independent of US tech parts. That will likely then consolidate breakout capacity.

As to the trade deal, Trump tariffed himself into a corner. He now threatens again tariffs of 25% on the remaining $300b of Chinese imports. As expected, Xi isn’t impressed. He knows full well that doing so will send the US economy into recession. If Xi retaliates by cutting off Chinese rare earth metal export and/or US movie industry imports, the US economy will be dying: defense, cars, aviation, civil and military and just about any tech industry depends on rare earth metals, 80% of which are imported from China. If Xi cuts out the US movie exports, Hollywood will go down financially. Which means: just about the entire US industry will die.

Conversely, for China trade with the US is only about 5% of GDP.

Which means, Xi is under no pressure to make a deal. The US needs it, but China doesn’t really want it. Hence the lack of a meeting scheduled at the G20. That isn’t a venue where you make a trade deal of such consequence.

But even worse: Trump will have to reinstate Huawei. If they go independent, then the US tech industry will falter and Google will lose its monopoly. And at this time may well not be given access to the Chinese market due to public knowledge of their complicity with the NSA and US military spying.

There will not be a Cold War 2.0 in economy. The US already lost it. Pompeo meanwhile gave away the regime change in Venezuela and can’t start a war on Iran due to either quagmire or potentially loss of its carrier in the Arabian Sea.

Expect ISIS to be reborn under a different name. The theater will be destabilization of Russia and China via Xinjiang. It is the only avenue the US has left: the war of terror.

So much for Trump’s art of the deal.

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