I absolutely agree. And yes, the techno-fascist mold is a real possibilty for the US and Europe. However, I'm still amazed at all the planning that is going on for the West's perceived enemies.
At this point, I can say that wherever the US does, China will be just fine. Other parts of the world might not be so lucky, but the worst of it will be in only a few places. US/G7 doesn't have the strength for a WWIII.
Ironically, US allies are most at risk. If the new generation of national security perma-hawks get their way, they're going to remake the US and much of Europe in a techno-fascist mold. This process is in advanced stages already.
Countries outside the G7/NATO influence bubble - provided they're not geographically isolated - are ironically more free to go their own way. But each case depends on how deep is the the local elite capture by US/G7. It isn't particularly hard now to see where the power structure is at. Israel's genocide in Gaza is a painfully vivid litmus test.
Strictly speaking, China has a good chance of flying over the mountaintop and avoiding a crash. But only barely. The core weakness is China's shortage of natural resources. However, if China can successfully morph its economy from export-centric to domestic-centric, the Chinese people will have better living standards (although not necessarily a better life due to high-tech social control). In addition, without the burden of being the "world factory", China's need to import energy and raw resources can be greatly reduced to the point of satisfying domestic needs mostly. Some export surplus is needed to earn the money to buy energy and natural resources that China does not have. BRICS and the Global South have many potential sellers, but China is still at its beginning stage of setting up a vast enough civilian marine operation network. To achieve that, China needs a navy able to prevent the US provocation (no need to win over the US Navy, only needs to be strong enough to make American admirals think twice). Of course, by then, China will impose threats on its neighbors. China always does that throughout its 2000+ years of history. Just ask Koreans and Vietnamese.
In the medium/long term, Russia and Central Asia have most everything necessary. US has decisively lost the Islamic world now. That's a lot of people. Also I don't think there will be any kind of global-scale blockade (ie prevention of trade vs 3rd parties) by US/G7. They can stop trading on their own account - wouldn't surprise me. They can make countries like Australia or Korea follow along. Will not do much at this point in time. The worst they can realistically do, I think, is rile up Taiwan and perhaps the Philippines to do something pointless, since US policymakers have an obligation to "try". USN past the point where they have the guts to act directly. They struggle to come within 1000km of Yemen.
Thank you for bringing these pieces together in a coherent story on the emergence of today's power play. Capitalism is fundamentally a mercantilist system. The free-market ideology adheres to a period of deviation. Your piece helps explain how we are now returning to the 'normal'.
Interesting point, John. It does make sense, after all, capitalism's "normal" modus operandi is accumulation by dispossesion which involves organized violence, and mercantilism often hinges on such processes.
A free market requires a market monitor and enforcer to maintain "free" and "informed" trades. However, pure capitalism is concerned only with money/wealth. Part of the problem of China's continuing internal decay is due to this attitude of "Look at money for everything," started circa 1991.
Brilliant summary of our western elites supremacist mindset and their subsequent hegemonic "planning" all that within societies crippled by decades of neoliberal sabotage, MIC greed and imperial wars. Your piece is the reason why I am on Substack. Thank you for your work!
I find your analyses more magnetic and informative than other papers I go through (or sometimes gloss over).
What piqued my interest was the part where you said the U.S. will be using Europe as a core proxy element against Russia. Add to it the bit you (rightfully) raised concerning the inability of the Europeans to buy weapons for themselves (and Ukraine) due to poor fiscal policies, which if they go through with procurements of arms, will worsen the financial situation of the whole continent.
This prompts me to raise the following questions:
1- Will that convert Europe to become an active conflict zone in the future? I don't mean war zone, but a conflict zone specifically characterized by deepened social unrest, the rise of extreme parties (across the entire spectrum) and radicalization of large segments of the community, rising poverty, awakening dormant or otherwise not-yet-born tensions between countries on the continent (especially EU members)? Do you see a specific element or condition that has the capacity in setting things off to spiral into a full crisis?
2- Can we consider the Ukraine War to be a proxy against Europe itself, in an effort by the "American" elites to subjugate it (more than it already is) and entrench its economical and political policies with that of the U.S?
3- Will we possibly see the world once again being split by big powers into spheres of influence as we once did in the Cold War? Or will the BRICS block be a catalyst in breaking that possibility?
I'm a recent subscriber btw, I'm thankful I've stumbled upon your account this week!
Thank you for the generous feedback—and for jumping aboard as a new subscriber! Your questions go straight to the heart of the pieces I write, so let me tackle them one by one. I’ll keep it concise here and circle back with fuller essays later. 1 · Europe as a brewing conflict zone
Yes, I expect the continent to slide into a zone of contestation—not open war, but overlapping crises of legitimacy, welfare, and identity. Each country will manifest its own “flavor of unrest,” shaped by the long grooves of national history (the political‑geographers call this path dependence):
Germany sits on a fault line of Obrigkeitshörigkeit—a learned obedience to external authority. In calmer decades that deference lubricated consensus politics; under today’s energy squeeze, industrial off‑shoring, and U.S. pressure to re‑arm, it can flip toward brittle polarization (to put it mildly).
The UK is wrestling with the unfinished business of Brexit: a growth strategy still MIA, social services stretched thin, yet an outsized military ambition that channels scarce money into frigates rather than flats.
Southern and Eastern Europe face the austerity vice: EU fiscal rules on one side, popular expectations on the other. Rising defense budgets threaten to crowd out social spending—fertile ground for both far‑right nativism and hard‑left protest.
I don’t see a single spark (even though, it's a possibiltiy); I see a process—tight monetary policy, high energy costs grinding away until one state hits a tipping point. And yes, U.S. elites often give that process an extra shove, whether by nudging procurement choices or by setting NATO’s threat tempo. Watch Berlin in particular; I’ll have a dedicated piece soon.
2 · Ukraine as a proxy—against Russia and Europe
Framed crudely: bleed Russia, bind Europe. By funneling European arms and coffers into Ukraine while blocking cheap Russian gas, Washington narrows Europe’s strategic options and keeps industrial policy synchronized with U.S. aims. The pattern is long‑standing: every time Berlin or Paris edges toward détente with Moscow (think the early 2000s pipelines or Medvedev’s “common economic space”), a crisis deepens trans‑Atlantic dependence. The war therefore functions as a double proxy—Russia is weakened directly, and Europe is kept on a short strategic leash. 3 · Spheres of influence or something messier?
A neat Cold‑War‑style bifurcation is possible, but not inevitable. BRICS+ could gum up that script if its members translate shared grievances into a minimal operating system—alternative payments rails, pooled credit lines, joint tech standards. Absent that, the U.S. will exploit the bloc’s internal asymmetries and we tumble back into classic spheres. Common ideology isn’t required (even though some kind of shared understanding of values or interests might help); common interests and some protocol for dispute resolution are. Without them, infiltration and wedge‑driving become easy.
I’ll dive deeper into Germany’s historical pattern in an upcoming posts. Meanwhile, feel free to keep the debate going—sources, counterpoints, all welcome. This community thrives on exactly the kind of layered questions you’ve raised.
Thank you again for your kind words and interesting questions.
Oh my, thank you for your generous response! So detailed yet so concise!
You touched upon a crucial point, in which you see the destabilization of Europe as a process (which takes time) which at its beginning will push a state to its tipping point. Could that possibly mean unrest will spill into other countries? Like a nefarious, contagious infection gripping one state after the other? And do you see some of them being spared (like Norway or Ireland, for example)?
I also can't help but compare Poland of today to Honduras during the Cold War, they seem to function the same in the context of America extending its hand into a contested region and straightening up a country, supplying it with arms and intel to act as a watchdog and potentially an active executioner in case a conflict ensues. Acting as a buffer state at the ready, not for its own national interest but only as a lackey.
Also, are most politicians on Europe (and more specifically members of the EU) in it when it comes to dragging Europe into its own demise (or at least into further weakness and irrelevance)?
Some of them tend to send mixed signals (like Meloni of Italy or Sanchez of Spain) whereby they seemingly wish to pursue a path of mutual cooperation with both The U.S and China, while other times shunnig their Chinese counterpart when the Americans poke them a tad. While others (like Macron and Merz) seem not to care (with their bad decisions, with Merz cancelling the debt brake before becoming chancellor). On the other hand, some voices like the AfD and RN try to position themselves as peacemakers, putting their national interests first (albeit with some undesirable or eyebrow-raising policies) are they truly caring or is this simply them pandering to an already pissed electorate (which I firmly believe)?
Forgive me for my long wall of text again. Thank you for sharing you knowledge! (Also looking forward to your future writings, here to the next)
This article is well organized and provides a clear formulation of the US strategy and likely procedures to besiege China economically through a tariff war. Given that the US has launched
secondary sanctions against China because China buys oil from Iran, then tariffs are less of an issue if the trades are stopped altogether or greatly reduced (possible per secondary sanction). There is nothing I can disagree with the author about. My comments are more about potential countermeasures China can take and my assessment of relative strengths and weaknesses in strategies.
What the US has done to China in the recent so-called tariff war is unsurprising. If anything, one should ask what took them so long. Procrastination, faction infighting, incumbent beneficiary, etc., all the usual suspects. The more interesting questions will be why the US launched such a large operation without proper preparation, and why China did not make better preparations after the skirmishes in Trump's first term? I guess it would be a very similar set of answers as to why the US did not do this earlier. One of the overlooked factors is probably the incompetence of the Chinese Communist Regime's senior and even mid-level officials' leadership and management. If today's China were run by the CCP senior leadership of the past, say during 1921-1949, China's preparation and reaction would likely be fairly different. It is not that Xi did not prepare, only that Xi did not prepare enough because he did not see ahead far enough. Just compare Xi against his father. His father had more foresight than he does. Xi is good at power struggles, but the skills learned from domestic power struggles within the CCP regime are not entirely applicable to the international stage.
China's key resistance will be from nationalism. Historically, it was nationalism that saved the fate of CCP multiple times. I estimate that this time it will save CCP as well. Nationalism in China is not new. Confucius had said something about cultural nationalism, roughly, "If you come to Rome and behave like Romans, I shall treat you just like Romans." However, nationalism took a much stronger and bitter turn for China from 1820 to 1945. During that period, multiple western powers, Russians and Japanese included, had exploited and looted China in various ways. The actions culminated in the Japanese invasion of China in 1937. Although China held on until 1945 and became one of the victors, the truth is China would not have made it without first the USSR, and later aid from the USA. After the Chinese Communists won the civil war 1945-1949, the West in general, and the Americans in particular, became constant targets for nationalist propaganda to this day.
No matter what nature an empire may have, an empire is first and foremost a nation, and
Imperialism must have nationalism at its back. I guess Nationalism gets its bad name because of this connection. Trump also depends on US nationalism to get elected (MAGA). China does not have much to go against the US sanctions. However, China can count on nationalism to absorb the punch. I judge that the US punch will be powerful, but not fatal, and the US does not have the necessary tools or environment to break China without resorting to military force. For the first quarter after the tariff war starts, the US consumers will see minimal changes. So far as I can tell, there is no sign of shortage in Walmart, Dollar Tree, or Amazon. The pain for the US consumers will start only after one full quarter, maybe more, depending on how many pre-emptive imports have been done by US retailers in anticipation of the trade war.
The pain in China, however, is immediate. A small number of products for export can be rerouted through other countries. Some products can be absorbed by the domestic market, but China has
been effectively in a recession since 2022. A significant number of products, however, have to sit in the warehouse and wait. Employees in export sectors have cut back on spending even before the raised tariff went into effect. Xi went to Shanghai for inspection recently. That alone is a rare act and enough to suggest the Chinese side's assessment of the situation is serious. The most obvious countermeasure for China to take is to distribute spending coupons to the domestic public to buy these products meant for export. However, such a policy goes against China's deep government debt load and traditional CCP doctrine of no free stuff for the general public. Of course, cogs of the Party machinery would fare a lot better. However, CCP elites understand very well that the reaction of the general public is critical. I assess that China will go this route to start pushing for "domestic circulation" (or consumer-driven economy in Western parlance). Xi may not like the idea, but I also believe his hands are tied.
There have been more and more signs that Xi will not have a 4th term, and the "deal" was done
in the 20th Party Congress in late 2022. Recent promotions have shown more people outside
of Xi's faction going upward. The majority of the CCP senior leadership do not want to have a bad relationship with the West, let alone a total decoupling (for the usual dishonorable reasons). However, the fact that the US escalated the trade war into threatening secondary sanctions after what US officials claimed to be signs of weakness in the position of the Chinese government shows a major miscalculation on the side of the US. Xi's personal line is decoupling, but the Party Line is to continue domination over China. Losing face to a foreign country is an absolute no-go in a country soaked in extreme nationalism. The anti-Xi factions will unite, take a lower-profile approach to dealing with the US, and be more willing to make symbolic gestures. However, for anything fundamental to the Communist regime, no change of position is possible. Trump can get what he wants, but he and the American people have not done their homework yet.
The Trump admin launched the tariff war with unprecedented intensity and escalation at an unprecedented speed, suggesting that they learned from past mistakes in trying to strangle Russia
but failed. In 1998, they tried, but Russia survived. After Putin grabbed power, he immediately
addressed the related systemic weakness. In 2008, the West tried again with higher intensity
enough to break Russia of 1998, but Russia had improved itself. In 2014, in conjunction with the
Ukraine civil war, the West tried again and failed again. By 2022, both the US and the EU tried what they thought was sure-fire, even at the risk of hurting themselves. Not only did Russia survive the economic onslaught, Russia prospered because of the sanctions.
In theory, China can copy the homework done by the Russians. In reality, not to the same effect because Russia has Putin in charge, while China has Xi. Putin's generation is better than the USSR bureaucrats of the Breznev era, but the Chinese Communist leadership today is far below their forefathers. It is a game of a mentally retarded cat against a physically disadvantaged mouse. It is hard to judge who would come out better. However, so far, there is no sign of Russians abandoning the CCP. So my guess is China will survive. And if China can successfully morph its economy into a domestic consumption-driven one, it will need less foreign exchange to import energy and natural resources. Such a change will be so profound and may once again start to threaten CCP's domination. But that will be another game 10 years from now.
I absolutely agree. And yes, the techno-fascist mold is a real possibilty for the US and Europe. However, I'm still amazed at all the planning that is going on for the West's perceived enemies.
At this point, I can say that wherever the US does, China will be just fine. Other parts of the world might not be so lucky, but the worst of it will be in only a few places. US/G7 doesn't have the strength for a WWIII.
Ironically, US allies are most at risk. If the new generation of national security perma-hawks get their way, they're going to remake the US and much of Europe in a techno-fascist mold. This process is in advanced stages already.
Countries outside the G7/NATO influence bubble - provided they're not geographically isolated - are ironically more free to go their own way. But each case depends on how deep is the the local elite capture by US/G7. It isn't particularly hard now to see where the power structure is at. Israel's genocide in Gaza is a painfully vivid litmus test.
Strictly speaking, China has a good chance of flying over the mountaintop and avoiding a crash. But only barely. The core weakness is China's shortage of natural resources. However, if China can successfully morph its economy from export-centric to domestic-centric, the Chinese people will have better living standards (although not necessarily a better life due to high-tech social control). In addition, without the burden of being the "world factory", China's need to import energy and raw resources can be greatly reduced to the point of satisfying domestic needs mostly. Some export surplus is needed to earn the money to buy energy and natural resources that China does not have. BRICS and the Global South have many potential sellers, but China is still at its beginning stage of setting up a vast enough civilian marine operation network. To achieve that, China needs a navy able to prevent the US provocation (no need to win over the US Navy, only needs to be strong enough to make American admirals think twice). Of course, by then, China will impose threats on its neighbors. China always does that throughout its 2000+ years of history. Just ask Koreans and Vietnamese.
In the medium/long term, Russia and Central Asia have most everything necessary. US has decisively lost the Islamic world now. That's a lot of people. Also I don't think there will be any kind of global-scale blockade (ie prevention of trade vs 3rd parties) by US/G7. They can stop trading on their own account - wouldn't surprise me. They can make countries like Australia or Korea follow along. Will not do much at this point in time. The worst they can realistically do, I think, is rile up Taiwan and perhaps the Philippines to do something pointless, since US policymakers have an obligation to "try". USN past the point where they have the guts to act directly. They struggle to come within 1000km of Yemen.
Thank you for bringing these pieces together in a coherent story on the emergence of today's power play. Capitalism is fundamentally a mercantilist system. The free-market ideology adheres to a period of deviation. Your piece helps explain how we are now returning to the 'normal'.
Interesting point, John. It does make sense, after all, capitalism's "normal" modus operandi is accumulation by dispossesion which involves organized violence, and mercantilism often hinges on such processes.
A free market requires a market monitor and enforcer to maintain "free" and "informed" trades. However, pure capitalism is concerned only with money/wealth. Part of the problem of China's continuing internal decay is due to this attitude of "Look at money for everything," started circa 1991.
Brilliant summary of our western elites supremacist mindset and their subsequent hegemonic "planning" all that within societies crippled by decades of neoliberal sabotage, MIC greed and imperial wars. Your piece is the reason why I am on Substack. Thank you for your work!
Thank you, Karim, for your kind comment. And comments like yours remind me why I'm researching and writing to share what I find.
By all means, an outstanding work!
I find your analyses more magnetic and informative than other papers I go through (or sometimes gloss over).
What piqued my interest was the part where you said the U.S. will be using Europe as a core proxy element against Russia. Add to it the bit you (rightfully) raised concerning the inability of the Europeans to buy weapons for themselves (and Ukraine) due to poor fiscal policies, which if they go through with procurements of arms, will worsen the financial situation of the whole continent.
This prompts me to raise the following questions:
1- Will that convert Europe to become an active conflict zone in the future? I don't mean war zone, but a conflict zone specifically characterized by deepened social unrest, the rise of extreme parties (across the entire spectrum) and radicalization of large segments of the community, rising poverty, awakening dormant or otherwise not-yet-born tensions between countries on the continent (especially EU members)? Do you see a specific element or condition that has the capacity in setting things off to spiral into a full crisis?
2- Can we consider the Ukraine War to be a proxy against Europe itself, in an effort by the "American" elites to subjugate it (more than it already is) and entrench its economical and political policies with that of the U.S?
3- Will we possibly see the world once again being split by big powers into spheres of influence as we once did in the Cold War? Or will the BRICS block be a catalyst in breaking that possibility?
I'm a recent subscriber btw, I'm thankful I've stumbled upon your account this week!
Thank you for the generous feedback—and for jumping aboard as a new subscriber! Your questions go straight to the heart of the pieces I write, so let me tackle them one by one. I’ll keep it concise here and circle back with fuller essays later. 1 · Europe as a brewing conflict zone
Yes, I expect the continent to slide into a zone of contestation—not open war, but overlapping crises of legitimacy, welfare, and identity. Each country will manifest its own “flavor of unrest,” shaped by the long grooves of national history (the political‑geographers call this path dependence):
Germany sits on a fault line of Obrigkeitshörigkeit—a learned obedience to external authority. In calmer decades that deference lubricated consensus politics; under today’s energy squeeze, industrial off‑shoring, and U.S. pressure to re‑arm, it can flip toward brittle polarization (to put it mildly).
The UK is wrestling with the unfinished business of Brexit: a growth strategy still MIA, social services stretched thin, yet an outsized military ambition that channels scarce money into frigates rather than flats.
Southern and Eastern Europe face the austerity vice: EU fiscal rules on one side, popular expectations on the other. Rising defense budgets threaten to crowd out social spending—fertile ground for both far‑right nativism and hard‑left protest.
I don’t see a single spark (even though, it's a possibiltiy); I see a process—tight monetary policy, high energy costs grinding away until one state hits a tipping point. And yes, U.S. elites often give that process an extra shove, whether by nudging procurement choices or by setting NATO’s threat tempo. Watch Berlin in particular; I’ll have a dedicated piece soon.
2 · Ukraine as a proxy—against Russia and Europe
Framed crudely: bleed Russia, bind Europe. By funneling European arms and coffers into Ukraine while blocking cheap Russian gas, Washington narrows Europe’s strategic options and keeps industrial policy synchronized with U.S. aims. The pattern is long‑standing: every time Berlin or Paris edges toward détente with Moscow (think the early 2000s pipelines or Medvedev’s “common economic space”), a crisis deepens trans‑Atlantic dependence. The war therefore functions as a double proxy—Russia is weakened directly, and Europe is kept on a short strategic leash. 3 · Spheres of influence or something messier?
A neat Cold‑War‑style bifurcation is possible, but not inevitable. BRICS+ could gum up that script if its members translate shared grievances into a minimal operating system—alternative payments rails, pooled credit lines, joint tech standards. Absent that, the U.S. will exploit the bloc’s internal asymmetries and we tumble back into classic spheres. Common ideology isn’t required (even though some kind of shared understanding of values or interests might help); common interests and some protocol for dispute resolution are. Without them, infiltration and wedge‑driving become easy.
I’ll dive deeper into Germany’s historical pattern in an upcoming posts. Meanwhile, feel free to keep the debate going—sources, counterpoints, all welcome. This community thrives on exactly the kind of layered questions you’ve raised.
Thank you again for your kind words and interesting questions.
Oh my, thank you for your generous response! So detailed yet so concise!
You touched upon a crucial point, in which you see the destabilization of Europe as a process (which takes time) which at its beginning will push a state to its tipping point. Could that possibly mean unrest will spill into other countries? Like a nefarious, contagious infection gripping one state after the other? And do you see some of them being spared (like Norway or Ireland, for example)?
I also can't help but compare Poland of today to Honduras during the Cold War, they seem to function the same in the context of America extending its hand into a contested region and straightening up a country, supplying it with arms and intel to act as a watchdog and potentially an active executioner in case a conflict ensues. Acting as a buffer state at the ready, not for its own national interest but only as a lackey.
Also, are most politicians on Europe (and more specifically members of the EU) in it when it comes to dragging Europe into its own demise (or at least into further weakness and irrelevance)?
Some of them tend to send mixed signals (like Meloni of Italy or Sanchez of Spain) whereby they seemingly wish to pursue a path of mutual cooperation with both The U.S and China, while other times shunnig their Chinese counterpart when the Americans poke them a tad. While others (like Macron and Merz) seem not to care (with their bad decisions, with Merz cancelling the debt brake before becoming chancellor). On the other hand, some voices like the AfD and RN try to position themselves as peacemakers, putting their national interests first (albeit with some undesirable or eyebrow-raising policies) are they truly caring or is this simply them pandering to an already pissed electorate (which I firmly believe)?
Forgive me for my long wall of text again. Thank you for sharing you knowledge! (Also looking forward to your future writings, here to the next)
This article is well organized and provides a clear formulation of the US strategy and likely procedures to besiege China economically through a tariff war. Given that the US has launched
secondary sanctions against China because China buys oil from Iran, then tariffs are less of an issue if the trades are stopped altogether or greatly reduced (possible per secondary sanction). There is nothing I can disagree with the author about. My comments are more about potential countermeasures China can take and my assessment of relative strengths and weaknesses in strategies.
What the US has done to China in the recent so-called tariff war is unsurprising. If anything, one should ask what took them so long. Procrastination, faction infighting, incumbent beneficiary, etc., all the usual suspects. The more interesting questions will be why the US launched such a large operation without proper preparation, and why China did not make better preparations after the skirmishes in Trump's first term? I guess it would be a very similar set of answers as to why the US did not do this earlier. One of the overlooked factors is probably the incompetence of the Chinese Communist Regime's senior and even mid-level officials' leadership and management. If today's China were run by the CCP senior leadership of the past, say during 1921-1949, China's preparation and reaction would likely be fairly different. It is not that Xi did not prepare, only that Xi did not prepare enough because he did not see ahead far enough. Just compare Xi against his father. His father had more foresight than he does. Xi is good at power struggles, but the skills learned from domestic power struggles within the CCP regime are not entirely applicable to the international stage.
China's key resistance will be from nationalism. Historically, it was nationalism that saved the fate of CCP multiple times. I estimate that this time it will save CCP as well. Nationalism in China is not new. Confucius had said something about cultural nationalism, roughly, "If you come to Rome and behave like Romans, I shall treat you just like Romans." However, nationalism took a much stronger and bitter turn for China from 1820 to 1945. During that period, multiple western powers, Russians and Japanese included, had exploited and looted China in various ways. The actions culminated in the Japanese invasion of China in 1937. Although China held on until 1945 and became one of the victors, the truth is China would not have made it without first the USSR, and later aid from the USA. After the Chinese Communists won the civil war 1945-1949, the West in general, and the Americans in particular, became constant targets for nationalist propaganda to this day.
No matter what nature an empire may have, an empire is first and foremost a nation, and
Imperialism must have nationalism at its back. I guess Nationalism gets its bad name because of this connection. Trump also depends on US nationalism to get elected (MAGA). China does not have much to go against the US sanctions. However, China can count on nationalism to absorb the punch. I judge that the US punch will be powerful, but not fatal, and the US does not have the necessary tools or environment to break China without resorting to military force. For the first quarter after the tariff war starts, the US consumers will see minimal changes. So far as I can tell, there is no sign of shortage in Walmart, Dollar Tree, or Amazon. The pain for the US consumers will start only after one full quarter, maybe more, depending on how many pre-emptive imports have been done by US retailers in anticipation of the trade war.
The pain in China, however, is immediate. A small number of products for export can be rerouted through other countries. Some products can be absorbed by the domestic market, but China has
been effectively in a recession since 2022. A significant number of products, however, have to sit in the warehouse and wait. Employees in export sectors have cut back on spending even before the raised tariff went into effect. Xi went to Shanghai for inspection recently. That alone is a rare act and enough to suggest the Chinese side's assessment of the situation is serious. The most obvious countermeasure for China to take is to distribute spending coupons to the domestic public to buy these products meant for export. However, such a policy goes against China's deep government debt load and traditional CCP doctrine of no free stuff for the general public. Of course, cogs of the Party machinery would fare a lot better. However, CCP elites understand very well that the reaction of the general public is critical. I assess that China will go this route to start pushing for "domestic circulation" (or consumer-driven economy in Western parlance). Xi may not like the idea, but I also believe his hands are tied.
There have been more and more signs that Xi will not have a 4th term, and the "deal" was done
in the 20th Party Congress in late 2022. Recent promotions have shown more people outside
of Xi's faction going upward. The majority of the CCP senior leadership do not want to have a bad relationship with the West, let alone a total decoupling (for the usual dishonorable reasons). However, the fact that the US escalated the trade war into threatening secondary sanctions after what US officials claimed to be signs of weakness in the position of the Chinese government shows a major miscalculation on the side of the US. Xi's personal line is decoupling, but the Party Line is to continue domination over China. Losing face to a foreign country is an absolute no-go in a country soaked in extreme nationalism. The anti-Xi factions will unite, take a lower-profile approach to dealing with the US, and be more willing to make symbolic gestures. However, for anything fundamental to the Communist regime, no change of position is possible. Trump can get what he wants, but he and the American people have not done their homework yet.
The Trump admin launched the tariff war with unprecedented intensity and escalation at an unprecedented speed, suggesting that they learned from past mistakes in trying to strangle Russia
but failed. In 1998, they tried, but Russia survived. After Putin grabbed power, he immediately
addressed the related systemic weakness. In 2008, the West tried again with higher intensity
enough to break Russia of 1998, but Russia had improved itself. In 2014, in conjunction with the
Ukraine civil war, the West tried again and failed again. By 2022, both the US and the EU tried what they thought was sure-fire, even at the risk of hurting themselves. Not only did Russia survive the economic onslaught, Russia prospered because of the sanctions.
In theory, China can copy the homework done by the Russians. In reality, not to the same effect because Russia has Putin in charge, while China has Xi. Putin's generation is better than the USSR bureaucrats of the Breznev era, but the Chinese Communist leadership today is far below their forefathers. It is a game of a mentally retarded cat against a physically disadvantaged mouse. It is hard to judge who would come out better. However, so far, there is no sign of Russians abandoning the CCP. So my guess is China will survive. And if China can successfully morph its economy into a domestic consumption-driven one, it will need less foreign exchange to import energy and natural resources. Such a change will be so profound and may once again start to threaten CCP's domination. But that will be another game 10 years from now.