The USA-Brazil Policy Institute writes extensively about trade and how the US can maintain its global relevance and economic dominance. We identify and analyze critical issues that often confound policymakers and government officials. Our primary goals are to promote stronger trade relations between Brazil and the United States and to pinpoint the obstacles hindering both countries’ growth trajectories. Our research consistently reveals that China poses a significant challenge to the United States in virtually every aspect of international relations and economic competition. China is the cause of all the United States real problems in the world.
China’s economic policies have caused de-industrialization in Brazil and many other countries. They achieved this by heavily subsidizing their own industries, making it impossible for Brazilian companies to compete. Then, China offered a lifeline to Brazil by purchasing vast amounts of its agricultural products, creating a trade deficit for China, in Brazil’s favor.
However, this seemingly beneficial relationship masks a deeper strategy. China has forged strong alliances with Brazil’s leftist PT political party, which, while pretending to be aligned with the US, actively works with China to undermine the US dollar. This two-faced approach allows China to gain economic and political influence while maintaining a façade of cooperation between Brazil and the USA.
The source of China’s wealth:
Despite China’s projected $1.06 trillion trade surplus, many experts and media outlets are claiming that the Chinese economy is collapsing or experiencing a major real estate recession. However, our Policy Institute believes that China has intentionally allowed this prolonged recession to reduce the cost of its exports and counter tariffs imposed by other countries. China’s government waited two years to announce a stimulus plan after the economic crisis began. This suggests they intentionally allowed deflation to reduce the price of their exports, making them more competitive in the global market. This delayed response highlights China’s strategic use of economic policy to achieve its trade objectives. We have also identified how China manipulates its currency to offset the impact of tariffs.
In our opinion, China is orchestrating a disinformation campaign, using thousands of internet trolls to disseminate a specific message: “The United States will always be number one, and China is collapsing.” This propaganda aims to deceive policymakers in Washington, particularly those in the Democratic administration, into believing that China’s economy is failing and that there’s no need for further tariffs. By shaping public opinion and influencing policy decisions, China seeks to maintain its economic advantage and geopolitical ambitions.
What is China’s goal?
China’s clear goal is to accumulate US dollars, and the most effective way to counter their strategy is to reduce their dollar earnings. This can be achieved by rebalancing trade, encouraging domestic manufacturing, and promoting alternative sources of goods and services.
Our policy institute has identified the most rational solutions to address China’s problematic trade practices:
- Tariff Chinese products entering the US: This directly targets the flow of Chinese goods into the US market. Bring this to a 1 to 1 trade relationship.
- Tariff products entering the USA with Chinese components, regardless of origin: This encourages companies worldwide to reduce their reliance on Chinese components.
- Support countries that can manufacture consumer products: This strategy encourages the development of alternative sources for goods, reducing reliance on China. Identify countries with manufacturing potential, such as Indonesia, Malaysia, Argentina, and Colombia, and provide comprehensive support. This includes collaborating with them on labor and tax reforms that facilitate export-oriented manufacturing.
- Identify countries with large trade surpluses with China: This highlights potential partners in rebalancing global trade.
These measures aim to counter China’s mercantilist strategies and create a more equitable trading environment.
China is projected to have a massive ~$1.06 trillion trade surplus in 2024, exporting ~$3.6 trillion while importing only ~$2.6 trillion.
While China cultivates relationships with around 16 countries, it strategically runs trade deficits with some, creating a seemingly advantageous partnership. However, this masks the fact that China is simultaneously generating substantial trade surpluses with other countries, indicating an uneven and potentially exploitative trade strategy.
With a $1 trillion surplus and a $200 billion deficit with certain countries, China is clearly benefiting more from some trading partners than others. This uneven distribution of trade benefits raises concerns about China’s long-term economic goals and its impact on the global trade system.
We decided to identify who China is screwing:
The United States should leverage all available diplomatic and economic tools to convince the following 19 countries and regions to impose a 30% to 50% blanket tariff on Chinese products. These countries should demand balanced trade from China. These countries currently have significant trade deficits with China, indicating an imbalanced and potentially exploitative trade relationship:
Trade Deficit with China (in billions of US dollars)
- Europe: $297
- India: $98.5
- Mexico: $62.3 (projected to reach $100 billion in 2024)
- United Kingdom: $57.9
- Singapore: $46
- Vietnam: $44.86
- Turkey: $34.3
- Philippines: $33
- Thailand: $25
- Bangladesh: $22
- Kyrgyzstan: $18.87
- Nigeria: $17.63
- Egypt: $14.12
- Pakistan: $13.6
- Panama: $9.68
- Kenya: $7.58
- Israel: $6.61
- Colombia: $5.9
- Dominican Republic: $3.67
By encouraging these countries to impose tariffs on Chinese goods, the US can help rebalance global trade, reduce China’s economic dominance, and promote fairer trade practices.
Including the United States, these countries have a combined trade deficit of $1.15 trillion with China. To counter this, the US doesn’t need to create a global anti-China alliance. Instead, it should focus on these countries in a two-pronged approach:
- Develop alternative suppliers: The US should support countries like those listed above to become competitive sources of goods, reducing reliance on China.
- Encourage tariffs on Chinese goods: The US should persuade these countries to impose tariffs on Chinese products and then these countries buy from eachother instead of from China.
If China faced tariffs of 30% to 50% on $1.15 trillion worth of goods, its trade surplus would likely decrease to approximately $400 billion per year. This would significantly impact China’s economic growth and dominance. These countries’ economies would boom as they buy from each other.
Nine of the countries on this list have already been identified as ideal US trade partners. These countries have the potential to manufacture consumer products and meet US demand, reducing reliance on China.
How to Convince them? Many of these countries are being exploited by China’s mercantilist policies. This gives the US leverage to persuade them to rebalance their trade relationships with China. While Europe might be the most reluctant to participate, its struggling economy could incentivize it to bring manufacturing back to the continent.
If there is a will, there is a way. The USA won’t be able to fix this on their own.
