Ian Welsh

The horizon is not so far as we can see, but as far as we can imagine

America Is Trying To Form An Anti-China Trade Bloc

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On April 10, 2025

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Trump backed off on most of his tariffs after Japan sold a ton of bonds and he panicked. He replaced most of the tariffs with a blanket 10%, and kept tariffs on China and Canada (because those countries had counter-tariffed the US, supposedly.) Now the report is that what US negotiators are demanding is that in exchange for avoiding US tariffs, other countries tariff China.

It should be noted, first, that China will not back down. The way Trump is framing this is “China will come to us” and sub-voce “beg” and that’s not happening, it would be a massive loss of face for Xi and for China and China is a “face” society. So massive tariffs on both sides will continue unless the US makes the first overtures and in a face saving way. The US rates on China are 125% and the Chinese rates on America are 85%.

These are nuclear levels and are going to bring trade damn-near to a halt. China has also put export bans on a number of companies for “dual use” techs: in practice, they’ve hit Lockheed and Boeing (big military aviation companies) so hard that I’m not sure those companies will be able to build planes, the supply chain is that China-centric and there are no alternatives.

(Aside: the criminally minded will be scrambling to smuggle into the US, and fortunes will be made, as they were during Prohibition. Those who wish to reduce criminal risks can just import Chinese goods to Canada and Mexico and sell them to whomever. “I don’t know officer, I don’t ask them why they want all those machine parts. Not my business.”)

It’s hard to say how this will play out, because:

  • Lots of western countries have a hate-on for China. European and Canadian politicians, early on in Trump’s regime, had suggested “why tariff us, let’s go after China together!”
  • But… that was then, and this is now. A lot has changed in three months. No one trusts Trump to keep deals any more and China is looking mighty stable. Even if you’d really rather do business with the US, like Europe, can you expect any deal to be kept?

I’m genuinely unsure how this will play out. My personal preference would be to tell the US and Trump to pound sand: they don’t keep their deals, so you just can’t do business with them no matter what the theoretical case is. (That case is mostly that it’s hard to compete with China, their goods are so cheap, whereas the US is sclerotic so you can sell them stuff, especially if they’re in a trade war with China and can’t buy cheap: charge them 2x as much and still come in under!)

If Trump had gone for this as the start, he would have gotten it. Canada and Europe would have fallen over themselves to join in. Now? Not so sure.

There’s a lot of “Trump is a genius and there is a PLAN” going around in MAGA circles. Bullshit. If this was Trump’s actual goal, what he did made it harder to achieve rather than easier. What actually happened is that Japan jerked the bond market’s chain and Trump backed down and is trying to pivot.

It’s not a completely stupid pivot, the West isn’t competitive against Chinese manufacturing, and one way to deal with that (a bad way, but still a way) is to just cut China out of Western markets and sell over-priced goods to each other.

Years ago I said that the way geopolitics were playing out was leading to a “New Cold War” — there’s an entire category on this blog, just on that.

Crunch time has come and we’ll see if it happens, and who’s on each side. Trump’s made America’s chances of putting together a strong coalition far weaker than they should have been, but anti-China fear and a refusal to end rentierism in the West mean that we can’t, actually, compete against China, so there’s still a strong temptation to form that anti-China bloc.

If so, we’ll be the weaker side, as the USSR/Warsaw Pact was last time and we will lose the new Cold war, falling further and further behind technologically and watching as the Chinese enjoy goods we can barely even dream of, just as was true of the late Soviet Union.

Everything, and I mean everything, will be sacrificed to keep the oligarchs in power, keep making them richer and keep the flow of unearned cash pouring into every rich person’s orifices.

Update: Seems that the EU and China are in talks to end EU tariffs on electric vehicles. That sound you hear is Elon Musk puckering up to kiss his ass goodbye.

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China Cuts The Legs Out Underneath The US LNG Industry

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On April 9, 2025

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I didn’t see this coming:

In a move that stunned traders, analysts and policymakers alike, China has just announced a complete halt on all liquefied natural gas imports from the United States. A decision made abruptly with no prior indication, no phased reduction and no explanation beyond a terse statement from Beijing…

…China was one of the fastest growing markets for American LNG, importing more than four million tons annually. Cutting that overnight is more than symbolic, it’s surgical.

Early reactions have been nothing short of panic. Energy markets were jolted, LNG prices in Europe and Asia swung wildly and US energy firms reported immediate financial hits…

…Overnight, the US was eliminated from one of the world’s most lucrative gas markets worth more than US$2.4 billion a year. Let that number sink in. More than 4.4 million tons of American LNG every single year now suddenly has nowhere to go.

Ports along the Gulf Coast are already feeling the shock. Massive LNG tankers are sitting idle with nowhere to dock, no buyers to receive them. Terminal operators are scrambling to reroute shipments, but the damage is done. Revenue streams are drying up. American energy firms are haemorrhaging cash: millions of dollars in losses each day…

…

China has begun rerouting LNG cargoes originally meant for East Asia straight into Europe’s energy-hungry markets. The message is clear: If the US wants to weaponise trade, China will weaponise its energy strategy.

Why Europe? Because it’s vulnerable and China knows it. Since the Russian invasion of Ukraine, the European Union has been scrambling to find a replacement for Russian gas. For the past two years, the US had been the emergency supplier, shipping LNG across the Atlantic to prevent blackouts and political chaos in capitals from Berlin to Warsaw. But that relationship, built out of necessity, was never guaranteed.

And China just exposed that fragility. By stepping in with competitive LG offers at lower prices, China is capitalising on a moment of weakness. European energy firms, already strained by inflation and political pressure, are welcoming any chance to secure stable and affordable supply.

One of the major stories of the Ukraine war is how the US took advantage of the pipeline sabotage and sanctions to sell Europe natural gas. Expensive natural gas. This increased the energy cost of heavy industry and led to a lot of European, especially German factories, shuttering and moving to the US.

Win/Win. For America.

China isn’t itself an LNG exporter, but it controls a lot of the market thru long term contracts. It has an excess of what it needs, and it just signed a new contract with Australia for long term supply:

In March 2025, Australia’s energy giant Woodside Energy inked a game-changing 15-year contract with China Resources Gas, one of Beijing’s top natural gas distributors.

Under the deal, Australia will begin supplying 600,000 tons of LNG per year, starting in 2027. While the volume might not seem earth-shattering on paper, the symbolism behind the agreement is monumental…

… Australian LNG is currently 20% cheaper than US shipments largely due to proximity and lower transportation costs. It takes roughly 10 fewer days for Australian cargo to reach Chinese ports, compared to those from the US.

Australia, of course, has been rather anti-China and a big US ally, BUT cold hard cash, err, trumps that.

What’s becoming clear about this trade war is that China has gamed it out. They thought ahead, having learned lessons during the first Trump administration: they were ready. They’ve massively reduced their vulnerabilities and carefully examined America’s weaknesses, and now they’re hitting them. Hard.

This realigns American allies in Europe and Australia more towards China, it hurts the US, and it highlights the benefits of doing business with China.

 

Xi Jingping

Xi, as we discussed in our last article, has been planning for this, not just since Trump, but since he took power. He’s locked and loaded and he’s firing his guns. The more Trump doubles down, the more America will be hurt, because China needs America less than America needs China. In many cases America firms have no choice but to buy from China, there is nowhere else to get what they need, while China either has alternatives or has already written off buying from the US, as is the case with chips. To China, America is a lost cause: it can’t be relied on either as a supplier or a buyer.

If America’s effectively a write-off, well, treat it like a write-off. And that’s what China is doing.

Trump and many Americans thought that China was the vulnerable one, that China was in a weaker position than them (they made the same mistake with Canada). It isn’t. Now Europe and Japan are holding weaker hands than the US in a trade war, but here’s China actually strengthening Europe.

It is to laugh. Trump’s fundamentally incompetent, a D- player and he’s going up against Xi, who’s arguably a great statesman, and so far, Xi is ripping him a new one.

This is what actual planning and actual competence looks like: see threats in the future and get ready for them. When someone declares you their enemy, as the US has repeatedly, take them seriously.

We haven’t seen that in any Western country in at least two generations.

 

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Understanding Xi JIngping

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On April 8, 2025

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What I always remember about Xi is something the founder of Singapore, Lee Kuan Yee wrote—that he had only met two people in his life who never let anyone else influence their emotions: Nelson Mandela and Xi Jingping.

Xi took over the CCP at a time it was completely ridden with corruption, to the point where regular citizens regularly mocked and complained about it. There were major factions, centering around the two previous leaders and the party had lost much of its ideological orientation. Citizens were happy with economic progress, but there was a sense that there was too much inequality, young people couldn’t afford homes and there was flirting with western ideas of democracy.

China has had three great CCP leaders. The first was Mao, and despite his bad reputation in the West the fact is that Mao massively improved primary education, dropped the mortality rate thru the floor, increased Chinese lifespans, and one famine aside, made sure everyone was fed. Mao tilled the ground, making China’s later rapid modernization possible, using essentially the same model as Japan: start with primary education, then secondary and concentrate on improvements in health.

Mao’s party was very ideological. Deng changed that. The Dengist paradigm was “modernize as fast as possible and be pragmatic: whatever works, works.” This was very successful, but it lead to corruption, to the formation of power centers outside the party, especially among the very rich non-party members and to the formation of cliques within the party. It also gutted the party’s ideology.

In addition Deng’s method of modernization was export driven (this is reasonable, almost everyone did it this way) and had left China very dependent on external trade, especially with America, its primary geopolitical foe.

Xi set a bunch of goals, as part of Xi Jingping Thought:

  1. Get rid of most of the corruption;
  2. Break the factions and center the party around him;
  3. Create an ideological party with unanimity on goals and how to achieve them;
  4. Break power centers outside the party;
  5. Spread the wealth to more people and make everyone at least moderately prosperous;
  6. Listen more to the people;
  7. Make it so that China is no longer vulnerable to foreign trade disruptions;
  8. Make China the world leader in technology and science;
  9. Orient China’s trade towards the developing world more than to the West;
  10. Place China in a position to rewrite the world’s economic system;
  11. Strengthen the army and make sure it is loyal to the party.

The bottom line here is that Xi has accomplished most of his goals and those he has yet to accomplish, like , are well underway. China is the world’s tech leader, the factions are broken, all corruption isn’t gone but its way down, billionaires are dropping like flies; the housing market has become cheaper and the government is taking it over and plans to build most housing going forwards, the party is unified in what it does and how it does to a remarkable degree, and America’s trade war is not a threat to China, but an opportunity to increase China’s world influence.


It’s not an exaggeration to say that Xi is probably the world’s most successful leader: he leads the most powerful economic nation in the world and he’s accomplished almost all the goals he set for himself. China’s response to Trump’s tariffs “this is stupid, but OK, bring it on” is just the latest sign of China’s strength and Xi success. More and more nations come to China with their problems: when Saudi Arabia and Iran wanted to make peace, China brokered the talks. English was not spoken.

Trump and almost all Western leaders are incompetent fools in comparison, who have overseen the decline of their nations, losing the tech and science lead, losing 1st place in trade to China, losing first place in industrial capacity to China and losing their proxy war against Russia to China, without whom Russia could not have withstood western sanctions.

Xi is the world’s most important leader, only Trump comes close, and Trump is important because he’s accelerating the end of the America Empire: because he’s a fool and and an idiot.

Xi sets goals, figures out how to achieve them, and does so. Trump and most Western leaders flail around, doing nothing but speeding up their countries decline and minting more rich people.

It isn’t even a competition any more, it’s a rout.

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Philistines, Philistines Everywhere

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On April 7, 2025

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It seems like the highest fruits of civilization are the target:

President Trump on Friday signed an executive order that aims to eliminate seven federal agencies, including ones that focus on media, libraries, museums and ending homelessness…

…The president targeted the U.S. Agency for Global Media, which is the parent company of Voice of America (VOA), as well as the Woodrow Wilson International Center for Scholars in the Smithsonian Institution and the Institute of Museum and Library Services, an agency that supports libraries, archives and museums in every state.

He also dismantled the United States Interagency Council on Homelessness, which aims to prevent and end homelessness in the U.S… (and more) (my emphasis)

Libraries, museums, art galleries, and open universities (they all used to be, now they’re all closed) are what justify humanity: they are our glory, the pinnacle of human grace. It’s art and culture and creativity and imagination that, along with care, make humanity worth shit.

(It should go without saying that the amount of money spent on libraries, archives and museums is a rounding error on Federal expenditures.)

Care is the other thing that makes humans more than a bunch of brutal, murderous, rapist, cruel chimps. Universal health care, hospices, housing for the poor, food for the hungry: these are what redeem humans, that make us more than a waste of skin.

Art and hospitals justify humanity. Caring for animals makes us more than beasts. I have no idea why some people want to be a bunch of murderous fucking chimpanzees, where the strong rule of the weak, and everything but power and money is denigrated.

If you’ve never experienced real pain, go visit a burn ward or a psych hospital. Our bodies make us vulnerable to horror. In face of that horror, it is art, learning and caring for others that make the world more than just Hell.

The people who laugh at prisoners being raped, who think that prisons should be about hurting prisoners, who think torture is acceptable, that mass murder of civilians is acceptable, become what they hate. Rapists by proxy, torturers by proxy.

This doesn’t mean turning the other cheek. By all means we should defend ourselves from monsters. But in so doing we must not, ourselves, become monsters.

To defund libraries, museums, archives (where our history is stored) and help for the homeless is to be a beast: less than an animal, since most social animals do care for each other. Libraries and public art galleries, in particular, are a ladder up and a solace. A place where anyone can go and experience the flower of human imagination, leave this world aside for a time and enter the worlds of creation. The internet is not a substitute, we can not be sure that the free resources here will remain free, and there is something extra to the physical presence of art and writing.

Trump is a Philistine, and so are most of his supporters. The ideals of civilization, the highest expressions, are care and art.

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Week-end Wrap – Political Economy – April 6, 2025

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On April 6, 2025

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Week-end Wrap – Political Economy – April 6, 2025

by Tony Wikrent

 

Crossing the U.S. Border? Here’s How to Protect Yourself

Nikita Mazurov, Matt Sledge, March 29, 2025 [The Intercept]

Searches of phones and other electronics are on the rise for those entering the U.S. Take these steps to help secure your devices.

 

Managing Unexpected ICE Visits: Best Practices for Employers

March 19, 2025 [IndustryWeek]

 

Trump not violating any law

‘He who saves his Country does not violate any Law’

 

‘We’re Not Stopping’: Trump Border Czar Vows to Ignore Judges

[The Daily Beast, via MSN 03-18-2025]

 

No Person Shall Be Deprived… 

John Ganz, April 02, 2025 [Unpopular Front]

On Monday, the Trump administration admitted that it had deported a Maryland man named Kilmar Abrego Garcia “because of an administrative error” to El Salvador where he was thrown in the nightmarish CECOT prison. In 2019, Abrego Garcia received protected legal status from an immigration judge who determined he could be tortured if he was returned to his home country. He was denounced by a secret informant as a member of MS-13, a characterization Abrego Garcia denies and local police in Maryland did not believe. But, of course, the entire regime is lying and claiming that Abrego Garcia was a “convicted” gang member. What they are really saying is, “We can declare people unprotected by the law and deport them by fiat.”

But now that Abrego Garcia is no longer in U.S. custody, the government says there’s nothing they can do — and technically they are right: A petition for habeas corpus, a Constitutionally-defined process where the imprisoning jurisdiction to produce justification of detention, only applies to someone who is held under U.S. authority. This is where I strongly suspect that this was not an “error” as such, but part of a deliberate policy experiment. What this regime is attempting to do is to find a way around habeas corpus protections: You spirit someone across the border quickly before their lawyer can file a petition, dump them somewhere—say, a concentration camp run by a friendly client state—and then say, “oopsie, no more habeas for them.” ….

 

How Donald Gets the Constitution All Wrong

Tom Hall, April 2, 2025 [La Progressive]

The recent deportations of “enemy aliens” from countries with whom we are not at war, and countries which have not invaded us, ignored the actual language of the law which the Donald’s lawyers pretend justify his Orders….

…We are told that the Donald is “relying on” the Alien and Sedition Acts of 1798. But has anyone told you what those acts actually say, and provide for legally?

The 1798 Congress was the 5th Congress since the ratification of the Constitution and formation of the new government. Many of the men (it was all men) who drafted and ratified the Constitution were still alive and knew what they had meant by ratifying the Constitution. In the spring and summer of 1798, they passed three laws dealing wth aliens (www.archives.gov-1798 Aliens Acts). They knew what aliens were, and they knew what the powers of Congress, the Presidency and the Courts were.

The first law, Signed by President John Adams, on June 25, 1798, provided that the President could order an alien expelled from the United States, if the President believed the alien was dangerous to, or had committed crimes against the nation. Section I of the act provides that the President’s Order had to be served the alien with an order telling him to get out of the USA, and setting a reasonable time for the alien to do so. The same section provided for aliens to have an opportunity to present a case against removal, and apply for permission to stay. The alien was allowed to “prove…by evidence” that he did not pose a risk. The same section also provided that an alien who had been ordered deported, but had not left, could be imprisoned and permanently barred from citizenship “on conviction” of such a charge.

Missing from this first section of the act was any authority for the President to abduct people from their homes, college campuses or sidewalks and deport them without any hearing, trial or conviction….

 

PATRICK LAWRENCE: American Freefall 

[Consortium News, via Naked Capitalism 04-03-2025]

The extent to which the U.S. has embarked on a departure from reality is only a question for empires in their waning decades.

 

Trump makes history by pardoning a corporation 

[The Hill, via Naked Capitalism 04-02-2025]

 

Criminal Corporations Are Not People, But Trump Just Pardoned One Anyway

Brett Wilkins, April 03, 2025 [CommonDreams]

 

With Detention of Beloved Farmworker Organizer, ICE Comes for the Labor Movement 

[Truthout, via Naked Capitalism 04-03-2025]

 

The Great Grovel: How Trump forced elite institutions to bend to his will

John F. Harris and POLITICO Staff, via Naked Capitalism 04-02-2025]

 

Trump’s Attacks on Press Freedom Are Paving the Way for Authoritarianism 

[Vanity Fair, via Naked Capitalism 03-30-2025]

 

Trump Executive Order Calls for End of Paper Checks for Taxpayer and Government Payments by Sept. 30; Industry Official Snort About Deadline; What About User Payment Charges?

via Naked Capitalism 03-31-2025]

 

Resistance

Perkins Coie gets 500 lawfirms and 300 retired judges to help battle Trump

Bill Addis, April 5, 2025 [DailyKos]

Over 500 law firms have filed an amicus brief (PDF) in support of Perkins Coie’s case against the U.S. Department of Justice, the named defendants, et. al..

The firms signing on take up 12 pages of the 24 page brief, filed on Friday. As evidence, it lists Trump’s executive orders against WilmerHale, Jenner & Block and Paul Weiss, and the specific suspension of security clearance and contracts at Covington & Burling.

The lead law firm filing the brief is Munger, Tolles & Olson LLP….

 

Big Law Is Winning in Court—Now Is Not the Time to Fold

John Relman, April 06, 2025 [Common Dreams]

The law firms fighting back against Trump’s executive orders are winning, and those cutting deals with the White House are suffering irreparable damage behind the scenes.

 

If the Chamber of Commerce is Listening . . .

Gerard N. Magliocca, May 31, 2019 [reposted 04-05-2025 at Balkanization.blogspot]

…The International Emergency Economic Powers Act (IEEPA), which is the statutory authority cited by the President, grants two types of authority. One gives the President the power to freeze the assets of foreign nationals and/or foreign governments. The other gives the President the power to suspend commerce (or types of commerce) with another nation. Nothing in the Act suggests that the President is given the power to levy tariffs on another nation. Indeed, there are many reasons to doubt that such a power exists.

First, Congress has delegated tariff authority in other statutes that do not apply here. For instance, the President can (and has) imposed tariffs on China in response to unfair trade practices based on clear statutory authority. The lack of such an express delegation in the IEEPA implies no tariff authority.

Second, there appears to be no precedent for a President using the IEEPA to impose tariffs. (I say appears because I cannot find an example. If there is one, then I would like to know.)
Third, there is no indication from the legislative history of the IEEPA that Congress intended to give the President the authority to raise tariffs.

Fourth, there is no judicial authority for the President’s proposed tariffs. Moreover, the Supreme Court’s careful analysis of the IEEPA in Dames & Moore v. Regan is considerably narrower than the President’s view….

In conclusion, the proposed Mexican tariffs are illegal. Interested parties should prepare to file suit.

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China in 1999 versus China in 2025

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On April 5, 2025

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Question: I’ve been presented an opportunity to go back to several places in China I visited in the past–namely Beijing, Xi’an, Yangshou and Shanghai. Probably three weeks.

I will also spend a week in South Korea with old friends, where I lived in 1993-94.

Is this a trip you, the readers of Ian’s site, would be interested in?

A Well Laid Trap By Putin

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On April 5, 2025

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Putin recently said,“I agree in principle to a cease-fire.”

That’s a brilliant PR and propaganda coup. It also has a very pragmatic, realistic purpose. He said this, damn well knowing Zhelensky and the Ukrainians and the Brits and the US have so many hurdles to get through until they can achieve a cease-fire that what Putin has ultimately done is give the Russian army carte blanche to continue capturing key territory for as long as it takes for the West to get its act together or the Ukrainian army collapses, whichever comes first. My money is on a mid-summer collapse.

Nota bene: Putin is making Trump look like a piker in just about every encounter, except, he lets Trump keep his ‘face.’ Putin is puting on a master class.

Open Thread

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On April 5, 2025

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Use to discuss topics unrelated to recent posts!

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