I am worried now. And, I’m not talking bear markets. Not yet. I’m not even talking about the Russian bear heading for the Alaskan Trump TV-fest. Of course, Europe should be worried about the Dear Orange Leader trading Ukrainian sovereign territory with his Putin pal but this summit feels more and more like a photo op with minimal progress. Another chance for the Donald to host, and hallucinate. Even the Kennedy Centre Awards for the Performing Arts have been threatened with a Trump MC slot. Bill Kristol of The Bulwark amusingly described Trump as claiming “his aides had wept, pleaded, besought him to host the awards personally” with reluctant success.
“I’ve been asked to host—I said, ‘I’m the president of the United States! Are you folks asking me to do that?’” Trump said. “‘Sir, you’ll get much higher ratings.’ I said, ‘I don’t care, I’m the president of the United States. I won’t do it.’ They said, ‘Please.’ And then Susie Wiles said, ‘Sir, I would like you to host,’ I said, ‘OK, I’ll do it.’”
Grown men crying again. The former reality TV star can’t resist the cameras or weepy stories but he’s certainly showing a curious resistance in one aspect of his gyrating global trade war. China was the original bipartisan focus of US trade deficit ire. Now, not so much. China trade tariffs are now lower than those smacked onto many US allies. In fact, Trump has once more delayed the imposition of escalating 100% + tariffs on China by 90 days. Global trade watchers and geopolitical risk analysts have been left scratching their heads. Apart from China tariff leniency, other developments indicate a shifting Trump focus. Here are three moves which are causing most confusion:
- Check out US Treasury Secretary Bessent describing to an incredulous Fox TV host, Larry Kudlow, the intention of the US to “appropriate” funds from allies in Europe, UAE and Japan to be invested in their trillions at the whim of the US government. Incredible stuff.
- Pity poor Switzerland. They are, as a friendly ally nation, currently topping the global tariff league tables with draconian 39% rates, higher even than China.
- After decades of US diplomatic efforts to woo India, the White House now seems determined to provoke the Modi government with tariffs because of their purchases of Russian oil. Never mind that China is in far bigger sanction infringement territory with its oil purchases, and weapons parts supplies.
It has not escaped the notice of most risk analysts that China must be very happy with how things are playing out. Arguably, they might even be encouraged. That’s not good news for Taiwan which sits in Beijing’s crosshairs for ultimate political annexation or military invasion. The bear to watch, in my view, is the China panda bear. We are already seeing the US and Trump caving on rare earths/critical mineral supplies and even the export of high-end AI chips in exchange for a 15% cut of Nvidia and AMD Chinese revenues. Yep, if that sounds like the actions of a Politburo centrally-controlled economy, you’d be very close to the exact definition of same. However, there’s a real danger the US is slipping in the ‘imitation’ stakes of competing in many key technologies.
We already know China controls close to 90% of electric battery cell production. Its dominance of the entire battery ecosystem from raw materials to processing capacity to battery components looks unassailable. Batteries might not be the only technology of our future racing to Chinese dominance. Research from the Australian Strategic Policy Institute (ASPI) shows that China is now leading the way in 57 out of the 64 technologies assessed by its Critical Technology Tracker, which has been updated to cover the last 20 years. The tracker measures a country’s performance based on the high-impact research it produces, specifically looking at the number of publications its institutions released in the top ten percent of cited papers in that specific field. The data studied was from a range of fields, like AI, cyber, defence, and robotics.
Yep, even AI might not be the US lead technology you thought it was. Perhaps, looking at share prices and massive AI infrastructure spend by Big Tech might not be the best indicator of future leadership. The WIPO Patent report tracking generative AI patents filed in the period 2014-2023 showed China filed 6x more patents than the US, or 70% of the global total. This feels like a very focused busy China, not quite a playful low-energy panda. Recent visitors to China speak to warp-speed adoption of autonomous transport, delivery, digital currencies, robotics and digital services. Then consider our recent article flagging solar power capacity being built at a rate equivalent to 5 nuclear power stations…..per week! It’s all about power, political and physical. It’s a language Trump understands, and one wonders has he decided it’s a battle he won’t win? If so, there’s one more focus for the panda.
Taiwan historically has enjoyed the security protection of the US and its allies in the Asia-Pacific region. Right now, nobody is sure that will continue. China will also be hugely encouraged by the former gameshow host’s preference for transactional relationships, rather than principles or loyalty. Meanwhile, the general risk view in Asia is that we should be very concerned. We missed Ukraine. Dare we miss Taiwan….?
