Regardless of visible posturing, threats, and increased tensions, both China and the U.S. are suffering from the current trade war and at a time when both economies are in great need of help, not hindrance. The simple fact of the matter is that both sides are feeling the negative effect of the war’s initial rounds and neither can afford to see it continue without great and growing damage and expense. President Trump made China trade inequities a centerpiece of his 2016 campaign and now finds himself at the beginning of a potentially tumultuous re-election campaign, while President Jinping is dealing with the rather rapid slowing of the world’s still most rapidly expanding economy. President Jinping appears to hold a tremendous bargaining chip, in the sense that a rapid settlement may tip the scale in favor of President Trump’s re-election, but at the same time no solution to the trade dispute could tip the scale in the other direction, potentially opening the door for a new U.S. negotiator come January of 2021.
President Trump may have greater urgency to ‘close the deal’ and President Jinping may have a slight luxury of ‘time on his side,’ but trade is only one facet of the ‘deal’ that the U.S. and China need to create. Not only are there patent infringement, trade inequities, and potential theft scenarios to be identified and presented by the U.S. for compensation, but there are also additional facets of an ‘agreement’ that will also have to be considered as part of the overall package. For example, China’s artificial island expansion into the South China Sea has the U.S. and at least six other countries, more than a little on edge. Some of those countries, Japan in particular, are even ready to make use of the term ‘war.’
There can be no doubt that China is geared for and continues to gear up for further expansion. Africa has become a big part of their expansion plans as well, economically, geographically, and potentially militarily. They’ve devalued their currency and gone to great lengths to make it far more transparent than ever before. Like many countries, they’ve grown very weary of America’s careless stewardship of the world’s premier reserve currency and even more so of our knee-jerk reaction to immediately apply economic sanctions as a starting point to practically any point of contention. This is a perfect time for consideration and compromise. The global economy is slowing, which provides the perfect opportunity to implement new tactics whose results can be seen, evaluated, and appreciated quickly, rather than getting lost in the hustling, bustling confusion of the blurred expansion we’ve come to expect. It’s a great opportunity to relax, recoup and redeploy a fully functioning global community.
Every country needs to maximize their ability to exist and contribute globally, but isolationism is the last thing the world needs at this point. Brexit and the like are certifiable steps in the wrong direction, which only create a greater opportunity for abuse, miscommunication, and potentially war. As this opportunity is met by the world and its leaders, we can only hope for the best possible outcome, but turbulence and a continued slowdown, at least in the short term, should be expected, which is why a greater percentage of physical precious metals may be the best possible defense available to individual investors. Call the experts at American Bullion for assistance, at (800) 653-GOLD (4653).