Video Infoblog: US can't compete with China's technology, so it wages economic war

 

 

Transcript

Bipartisan US economic war

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the United States is waging an economic war on China and both of the dominant

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political parties the Republicans and the Democrats have pushed for more aggressive policies to try to contain

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China the financial news Outlet Bloomberg published an article that summarizes the situation very well they

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say that this year in the 20124 presidential election in the Trump Biden

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rematch the only sure loser is China Trump has pledged to impose tariffs of

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at least 60% on all Chinese Imports Bloomberg estimates that this would

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shrink the US China trade of around $575 billion to practically nothing and

0:47

it's not just Trump the Joe Biden Administration has also imposed many aggressive anti-china policies including

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export restrictions and sanctions and Bloomberg notes that the Biden Administration is also considering

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several other restrictions on trade with China including restricting data flows

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and potentially putting tariffs on Chinese electric vehicles now just a few

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years ago before Donald Trump came into office in 2017 and started the trade War

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Chinese goods made up 22% of All Imports into the United

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States and if Trump imposes these tariffs that will likely decrease to close to 0% and Bloomberg noted that

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there are several industries that will be hit very hard including textiles and

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electronics many Us electronics companies will likely be devastated

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potentially going bankrupt because of these policies and US consumers will pay

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higher prices and of course this is coming at a time when the US has been facing an inflation crisis and inflation

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would get significantly worse if the US trade War on China escalates to this

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degree so this raises the question why is there so much antagonism toward China

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in Washington why do both political parties want to escalate the trade war

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against China what is driving all of this well as I explained in a previous

China is world's #1 manufacturer

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video which I will link to in the description below China has become the world's manufacturing superpower today

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China makes up 35% of the entire world's gross

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production of manufactured goods that's to say that China produces more than the

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next nine largest manufacturing countries combined and since

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2016 China has overtaken the United States as the largest economy on Earth

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and continues to grow faster and faster and soon its nominal GDP it's gross

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domestic product the size of its economy measured in dollars will also overtake

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the size of the US economy so more and more indicators show that US economic

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hegemony is declining and China is growing and growing in influence and

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this is fundamentally the main reason driving the very aggressive policies

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that the US has been carrying out against China however it's not just the size of the Chinese economy and the size

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of its manufacturing sector it's also because China is now leading the world

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in numerous key industries that will be the future of the world economy

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specifically China has become the world's leader in green technologies

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that will become more and more important as the world decarbonized and moves away from fossil fuels and China has

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absolutely dominated what it refers to as the new three Industries the these

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consist of one batteries two new energy vehicles or electronic vehicles and

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three solar power and wind power China is making enormous progress in these

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critically strategic Industries and the fact of the matter is that the West

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cannot compete with China and this explains why the US and Europe are

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waging economic war on China and specifically what this illustrates is

Clash of systems

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that the Western neoliberal capitalist model is unable to compete with China's

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state-led socialist model as the Financial Times newspaper put it very clearly they said the emergence of

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China's new three and other industries that were developed with heavy State

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subsidies is bringing to a head a clash between the Chinese economic system

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which closely marries State policy and Financial support with an aggressive private sector and the market oriented

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capitalism of developed countries concentrated in the west and by the way

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this conflict is not just because Chinese government industrial policy has been very successful in moving up the

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value chain and creating these very Advanced Technologies but as the financial times noted in this in this

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same report quote what has really alarmed the West about Chinese clean tech companies is that their technology

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is often Superior to that of the Us and other advanced economies so Western

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technology corporations largely based in the US these big Tech monopolies they

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simply cannot compete with the Chinese Clean Energy Products which are simply

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better and that's why the Western governments are resorting to economic

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war against China and in particular against China's technology sector so the

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irony is that the same Western neoliberal capitalist Nations that have lectured the world about the importance

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of free trade and free markets and privatization and liberalization and

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ending State support for important industries those same Western neoliberal

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economies are now resorting to state-led Industrial Development and Industrial

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policy and protectionist policies because they simply cannot compete with

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China One one of the clearest examples of this extreme hypocrisy is that the

Elon Musk laughed at Chinese competitors. Now they're beating him.

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billionaire oligarch Elon Musk is now openly calling for protectionist

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policies and heavy restrictions on Chinese electric vehicles because he

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said if Western countries do not put tariffs on Chinese electric vehicles

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China will demolish Rivals like of course Elon musk's company Tesla I'm

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reading here from Reuters quote Elon Musk said that Chinese automakers will

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demolish Global Rivals without trade barriers he complained that Chinese car

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companies were the most competitive and he said quote if there are no trade barriers established they will pretty

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much demolish most other car companies in the world they're extremely good now

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this is extremely ironic because back in 2011 Elon Musk did an interview in which

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he literally laughed at the idea of China competing with new energy vehicles

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and in 2023 the Chinese electric car manufacturer byd overtook Elon musk's

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Tesla as the largest ev manufacturer on Earth here's this clip of Elon Musk

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literally laughing back in 2011 at the idea that China could compete with him

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there's competitors now ramping up and as you're familiar with byd which is also on the west coast I think they're ramping up production of their electric

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vehicles Warren Buffett owns 10% stake in that uh why do you laugh V is trying

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to compete why do you left have you seen their car I have seen their car yes in

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fact at the Burkshire haway meeting I saw their cars yeah well they are on a different they're on a tell me why

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you're laughing um you don't see them at all as a competitor no why is that I mean they

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offer a lower price point I don't I don't think they have a great product why is that um I I don't

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think it's it's particularly attractive the technology is is not very strong um and and byd as a company has pretty

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severe problems and they home to if in China right so I I think they their focus is and rightly should be on making

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sure they don't die in China now this is certainly not the first time that Elon Musk has shown himself to be extremely

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hypocritical in fact he has constantly criticized government intervention in

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the economy and said that we need a free market and no State subsidies but in reality his companies like Tesla have

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received billions of dollars of subsidies from the US government and while billionaire oligarchs like Elon

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Musk like to sometimes flirt with libertarian rhetoric at the end of the day when they cannot compete with

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foreign Rivals like Chinese EV makers then they demand protectionism they

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demand tariffs because they know that Chinese competitors will beat them this

TikTok: Why US wants to ban it

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also explains why their is such a hysteria in the United States over Tik Tok because Tik Tok has quickly become

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one of the world's most popular social media apps and US social media

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corporations based in Silicon Valley which all are US government contractors they simply cannot compete with Tik Tok

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so this is why you're having these mccarthyite hearings in the US Congress

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in which right-wing US Congress people like for instance Senator Tom cotton a

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republican have been grilling the CEO of Tik Tok even though he's not Chinese

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he's Singaporean the US has been grilling him and accusing him of

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allegedly being part of the Communist Party of China and all of this nonsense of course this is all about scaring

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people in the United States to justify the new economic war against China that is bipartisan in Washington but it's

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also about justifying Banning Tik Tok and using protectionist measures against

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Chinese social media companies like Tik Tok in order to protect us social media

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monopolies like meta of course which owns Instagram and Facebook and WhatsApp

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or like Google which owns YouTube so this is a way once again of justifying

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this economic war against China because the US does not actually want economic

EU threatens tariffs on China

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competition and by the way it's not just the United States the European Union is doing the exact same thing and the EU

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launched an anti-subsidy investigation into Chinese electric vehicles Imports

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into the EU and there are many reports suggesting that Brussels will likely

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impose tariffs on Chinese electric vehicles so here we see another example

West's hypocrisy on climate change

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of how Western neoliberal capitalist economies cannot compete with China and

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this is especially clear when we look at the green transition not only with

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electric vehicles but even more so with solar panels one of the most important

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Technologies to fight against climate change and Western countries claim that

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they want to fight climate change rhetorically and they lecture countries in the global South for not immediately

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transitioning to Green energy well China is leading the world in the green transition and now Western countries say

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well if China's going to lead the green transition then we don't actually want it we actually don't care about climate

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change we're going to continue destroying the planet polluting the air and in fact many Western countries are

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expanding fossil fuel production which is making global warming even worse which is often causing extreme

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consequences in the global South where there's more and more extreme weather so the global South is facing the

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consequences of this very selfish behavior by the global North Rich economies and meanwhile China in 2020 3

Solar panels: China installs more than rest of world combined

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installed more solar panels more solar power capacity in one year than the US

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has ever installed or that any country has ever installed in the history of

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solar power I'm reading here from Bloomberg China accounted for more than

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half of the global additions of solar power in

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2023 China added 2117 gaw of solar in one year blowing away its previous

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record of 87 gaws in 2022 and in the entire history of solar

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power the US has installed 175 GW of capacity of solar power just

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in 2023 China installed 217 now China has

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610 gaw which is over three times more

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than the US has ever installed so China has installed more solar power capacity than

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the following countries all combined the US India Japan Germany Brazil Spain

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Australia and Italy combined the website carbon brief reported that clean energy

Clean energy is top driver of China's growth

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was the top driver of China's economic growth in 20123 Clean Energy

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Technologies contribute a record 11.4 trillion Yuan which is about $$ 1.6

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trillion us at the current exchange rate contributing that to China's economy in

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20123 accounting for all of the growth and investment and a larger share of economic growth than any other sector

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and this report notes that this surge in investment in China was driven by those

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new three Industries solar power electric vehicles and batteries and the

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report notes that in 2023 China invested $890 billion US in

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these clean energy sectors that is nearly the total Global investment in

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fossil fuel supply and China's investments in Clean Energy Technologies

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in 2023 were roughly equivalent to the entire GDP the entire economies of

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Switzerland and turkey the growth of both solar and and wind power capacity

China leads world in green transition

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in China in the past few years is absolutely amazing no other country

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comes even remotely close and this shows that while Western governments talk

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about climate change they never put their money where their mouth is they don't actually follow up their rhetoric

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with tangible policy to fight climate change China on the other hand is leading the world in the fight against

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climate change and in the transition toward green technologies that will be the future of humanity in fact Reuters

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reported in 2023 that China's carbon emissions are likely going to Peak potentially in

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2024 so that's to say that China is almost certainly going to meet the goal that it had set to to have Peak carbon

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emissions by 2030 China is likely going to accomplish that 6 years early or at

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least a few years early I should add that the website carbon brief also

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reported that China's emissions are set to fall in 2024 it notes that CO2 emissions are set

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to fall in 2024 and in general in China they could be facing a structural

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decline meanwhile the United States is very likely not going to meet the carbon

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emissions reductions commitments that it made for 2030 so let me repeat that that

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for emphasis here China is going to meet its 2030 carbon emissions reductions

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commitments early several years early whereas the United States is very likely

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not going to meet them at all this says everything about which country is

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actually taking climate change and the green transition seriously and which country that is the US which uses

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climate change simply as a rhetorical tool in order to boss other countries

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around so the US and the EU cannot compete with China in solar power and in

Neoliberal West can't outcompete China's state-led industrial development

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wind power China is leaving them in the dust and China has also become the

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world's leader in car production and in particular in the production of new

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energy vehicles or electric vehicles and in just three years between 2021 and

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2023 China went from exporting almost no cars to overtaking the largest car

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exporters South Korea Germany and Japan and now China as of the end of 2023

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China is the number one car exporter on Earth and this is a product of the

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success of China's Central planning of Planning by the government instead of

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allowing the the free market and private Capital to determine how industry will

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develop in China the Chinese government made a decision in 2020 to to create a

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new plan that they refer to as the high quality development of new energy

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Vehicles plan from 2021 until 2035 and the Chinese government through

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its state-owned socialized banking sector gave very favorable loans at low

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interest rates and provided subsidies and support to these critically strategic Industries in order to develop

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very quickly in research and production so this brings me to the Financial Times

The death of "free market" dogma

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article that I cited earlier it's titled the looming trade tensions over China's

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subsidies and I want to highlight a few points in this article because it's really revealing it shows how Western

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capitalist Nations that developed their economies and advanced technology through significant State intervention

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in the economy through industrial policy through protectionism through tariffs

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that through subsidies massive massive subsidies well now these Western governments like the US are attacking

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China for doing the same thing and they're responding with protectionist

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policies against China and the US is spending hundreds of billions and perhaps trillions of dollars on

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subsidies for Green Technology and yet telling China that it has to abide by

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free market principles this is what the old 19th century German Economist

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Friedrich list referred to as kicking away the ladder when wealthy countries

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industrialize and modernize their economies they then kick away the ladder that they use to move up the value added

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chain and industrialize and the South Korean development Economist had Jun Chang showed in his book kicking away

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the latter development strategy in historical perspective he showed how the

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advanced economies of the world including in the US Europe Japan they

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all implemented these State Le devel velopment models which included heavy protectionism and then when they became

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Rich they told poor developing countries to do the opposite of what they did and now this is exactly what the West is

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saying to China and the West is returning to these protectionist policies because they cannot compete

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against China so none of these countries actually believe in the so-called free market or free trade it's simply a

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rhetorical tool that is used by the dominant economic power in order to

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maintain its economic hegemony the classical political Economist David Ricardo famously argued back in the

The myth of "free trade"

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early 19th century that every country should have free trade and should trade

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according to their comparative advantage and that free trade benefits everyone now in addition to being a political

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Economist David Ricardo was also a politician he was a member of parliament from the UK and he conveniently left out

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how this narrative benefited the British Empire and the British Empire's economic interests and since then several

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Scholars have pointed out although it's still not mainstream David Ricardo is considered a god alongside Adam Smith

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but a few independent critical Scholars like Matthew Watson at the University of Warwick he pointed out that Ricardo's

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account of the purely mathematical logic of comparative advantage writes out of

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economic history the centrality of both Imperial Wars and African slavery to the

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early English and Portuguese experience of so-called free trade and he cited the

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renowned Economist Joan Robinson and she famously argued back in the 1960s and

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the 1970s that what was portrayed as the universal truth of comparative advantage

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in economics textbooks was actually Ricardo's description in abstract form

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of the structure of early 19th century British commercial interest that is to say

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the this idea of comparative advantage was not something that was set in stone in the laws of nature it actually was in

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that historical moment an argument that helped the British Empire and when it

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was not in the British Empire's economic interests they completely abandoned the idea of free trade they only preached

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free trade after they established their economic hegemony just as the United States was one of the most heavily

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protectionist economies of all of the advanced economies on Earth until really

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World War II when the US established its economic emony over the world and

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basically took over the previous role of the British Empire and then the US began

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preaching the importance of free trade and especially with the rise of neoliberalism in the late' 70s and 1980s

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the US began imposing the neoliberal Washington consensus on economies all

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around the world not only telling them but forcing these countries to liberalize their trade remove any trade

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barriers remove any subsidies and protectionist policies to help local Industries so they can compete

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internationally privatize state-owned Enterprises cut health care and education and other forms of social

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spending it's a matter of the rich countries telling the poor countries to do the exact opposite of what they did

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in order to become wealthy so now I'm going to go back again to this Financial Times article on the looming trade

US opposes industrial policy when China does it

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tension over China's subsidies it notes that China's Commerce Minister Wang Wan

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gave a speech in which he warned of rising trade protectionism and

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intensified geopolitical conflicts in particular targeting the new three Industries in China of EVS solar panels

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and lithium batteries and the financial times noted that the European commission

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is currently carrying out an anti-subsidy investigation into Chinese

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electric vehicles that could lead to higher tariffs for Chinese Imports the EU is also considering emergency support

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measures for its own solar panel manufacturing industry and it is carrying out an anti-dumping

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investigation into Chinese exports and the United States has slapped export

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controls on high-tech shipments to China so once again the West does not actually

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care about free trade they only preach free trade when it's in their own economic interests but when China

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benefits from trade well then they stop talking about free trade and the West resorts to trade War economic war and

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protectionism now this report in the financial times notes that developed countries have long grizzled about

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beijing's industrial policy so the US for decades has implemented industrial

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policy and provided billions and billions of dollars of subsidies for major companies especially tech

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companies and also through research funding through DARPA the pentagon's

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research organization so when China does industrial policy then the West

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criticizes it the financial times pointed out that in the early 2000s Beijing launched several industrial

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plans which aim to reduce China's dependence on imported technology to 30%

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or less by 2020 and China's industrial policy worried Western governments

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including US president Donald Trump and they were angry about China's made in

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China 2025 plan which sought to elevate China's technological prowess to the

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highest levels and they cite a China Economist with the Swiss bank UBS who

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said that quote the idea was that China was facing the middle inome trap and so

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China really needed to move up the value chain and upgrade industry to be able to

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compete and once again as the South Korean development Economist hun Chang showed in his work this is exactly what

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all of the advanced industrialized countries did they provided protectionist policies in form of

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tariffs they provided State subsidies and massive infrastructure investment by the state they provided very low

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interest interest credit loans provided Often by public Banks or at least banks

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that were being Guided by the state to these strategic Industries and then when

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they Ed these cist policies to help provide local industry infant Industries

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to develop then when they became internationally competitive those economies like in the US Europe Japan

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South Korea after those years of protectionist policies then they lifted those policies and started talking about

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free trade well for the past few decades China was still in the catchup period

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and was trying to move up the value chain using those same policies the financial times noted Ed that China has

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provided generous subsidies in many of these important sectors like semiconductors and electric vehicles the

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Chinese government also provided support in the form of building and operating

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public charging stations for electric vehicles and the Chinese government helped to fund product development

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production facilities research and development asset Acquisitions and low interest interest government loans and

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importantly for China's State planners the sector the green sector green

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technologies has met its Target and China's Chinese brand electric vehicles

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now hold 80% of the domestic Market as of 2022 and I have seen this in Beijing

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you can see that many many cars driving around are electric vehicles because they have a green license plate and in

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particular almost all of the taxis are electric vehicles in order to have a taxi basically to be a taxi driver you

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have to use an electric vehicle and the government has provided many subsidies

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and support mechanisms to encourage fewer and fewer internal combustion

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engines in the cars however it is not just a matter of government support for

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these industries the financial times wrote here that quote what has really

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alarmed the West about Chinese clean tech companies is that their technology is often Superior

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to that of the Us and other advanced economies and again this brings me back

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to what Elon Musk had said when the Tesla CEO this billionaire oligarch was

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calling for Western governments to implement protectionist policies to prevent his Chinese competitors from

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basically making Tesla go bankrupt these Chinese Technologies are frankly

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superior to the Western Technologies and the free market cannot compete which is

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why Western governments are now implementing industrial policy and using State support for these companies like

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China did but they're complaining when China does it despite the fact that they're doing the exact same thing now

"Washington Consensus" failed, Washington admits

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the financial times quotes Jake solivan the US National Security adviser under

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Joe Biden and he gave a historic speech in 2023 in which he complained that now the

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United States quote has to contend with the reality that a large non-market

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economy that is China's socialist economy has been integrated into the international economic order in a way

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that pose poses considerable challenges this is a transcript of the

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speech that Jake solivan gave in April 2023 at the Brookings institution one of

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the most powerful think tanks in Washington and this is the transcript published by the Biden White House and

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in this speech the naal security adviser Jake Sullivan he said that essentially

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the Washington consensus had failed and the Washington consensus refers to the

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neoliberal economic Orthodoxy that the United States imposed on countries around the world in particular through

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the Brett Woods institutions like the IMF and the World Bank and still today Global South countries are are often

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forced to implement the Washington consensus despite the fact that the US

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national security adviser is now admitting that it it's been a failure and once again it shows that the US

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tells poor countries to do the opposite of what it does in order to continue to

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develop its technology and its economy now Jake Sullivan said in the speech he

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noted that the neoliberal economic Orthodoxy of the Washington consensus

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led to four very significant problems first of all it led to the hollowing out of the US industrial base and that's why

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he's now calling for public investment that is state government investment because the free market is not going to

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do it and he said that there was an assumption at the heart of this neoliberal logic which is that markets

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always allocate Capital productively and efficiently but that's not true this

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neoliberal capitalist Orthodoxy was wrong and he noted that in the name of

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oversimplified market efficiency entire Supply chains of strategic Goods

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along with the industries and jobs that made them moved overseas so this is the

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downside of this deep trade liberalization furthermore he noted that another assumption in this neoliberal

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Orthodoxy was that the type of growth did not matter and he pointed out that

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neoliberal reforms came together to privilege some sectors of the economy like Finance while other essential

31:53

sectors like semiconductors and infrastructure atrophied and he said that the US industrial capacity which is

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crucial to any country's ability to continue to innovate took a real hit

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furthermore he noted that through its socialist model the People's Republic of China continued to subsidize at a

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massive scale traditional Industries like steel as well as key industries of

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the future like clean energy digital infrastructure and advanced

32:23

biotechnologies therefore America did not just lose manufacturing but it also

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eroded its competitiveness in critical technologies that would define the

32:35

future and he said finally another significant challenge that this

32:40

neoliberal economic Orthodoxy Unleashed was extreme inequality which has damaged

32:46

so-called democracy to the extent that there is so-called democracy in the west it's very exaggerated it's actually a

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plutocracy in which a small handful of billionaire capitalist oligarchs control the political system and can buy

32:59

politicians and that's why over 80 and in some cases over 90% of the members of

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Congress running for office in elections who have more campaign funding win the election it's the best so-called

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democracy money can buy but the point is is that this neoliberal economic

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Orthodoxy claimed that trade enabled growth would be inclusive growth that

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the gains of trade would end up getting broadly shared within Nations and this goes back to this interpretation of

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David Ricardo's idea of comparative advantage which is simply not true it's economic Dogma it's neoliberal

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capitalist Dogma but it's false and he admitted that those gains of so-called

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free trade failed to reach a lot of working people the American middle class

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lost ground while the wealthy did better than ever and American manufacturing

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communities were hollowed out and the key drivers of this increasing economic

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inequality and which has led to political radicalization going further and further to the right with far-right

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leaders like Donald Trump becoming mainstream and also in Europe you see the same thing with these neoliberal

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economic policies filling the rise of the farri in Europe as well and and neo-fascist movements Jake Sullivan

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pointed out the key drivers of this inequality and political radicalization

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was trickle down economic policies that is Neo liberal economic Orthodoxy and he

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says policies like regressive tax cuts deep cuts to public investment unchecked

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corporate concentration and active measures to undermine the labor movement

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which had built the middle class in the first place so that historic speech by

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the US National Security advisor explains why the US is now returning to

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protectionist policies and waging economic war against China because the neoliberal capitalist model has been

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fundamentally unable to compete with China's state-led socialist model now

35:04

China of course has a socialist market economy they refer to it as officially a socialist market economy or they refer

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to it as socialism with Chinese characteristics it includes elements of planning it's not the same as the Soviet

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economy but it still is a socialist model and I explained more about that Chinese economic model in the separate

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video that I did on how China has become the world's industrial superpower I have link to that in the description below

35:32

but finally going back to this Financial Times article once again briefly here it notes that Chinese policy makers have

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pointed out the hypocrisy of the US in the EU which also have massive subsidies

35:46

for green industry and they point out that the US government the Biden Administration passed the so-called

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inflation reduction act the IRA which was originally estimated to provide $385

35:58

billion of subsidies but could rise to $3 trillion of subsidies for green industry

36:06

in the US so this is an implicit acknowledgement that the free market and capitalism cannot compete with China

36:13

which is why they are now using very similar forms of state-led industrial

36:18

policy and this Financial Times article includes a quote that has become a cliche but there's an element of Truth

36:25

in it and they say that the US and the EU thought that when they normalized relations with China and begin trading

36:32

with China and when China joined the World Trade Organization in 2001 they thought that while they were dealing

36:38

with China China would become more like them but instead China managed to

36:44

actually make them become more like China and this is a very kind of arrogant condescending quote I don't

36:51

like it it's it's often quoted in the western media but there's an element of Truth in it in the sense that these

36:58

Western neoliberal capitalist economies cannot compete with China's socialist

37:03

model so now as Jake Sullivan had said the US is having to abandon the

37:10

neoliberal Washington consensus and Implement socialistic policies or at

37:15

least you could say State capitalist policies and instead of relying on the free market and Private Industry and

37:21

investors instead he's saying very clearly that this transition toward Green Tech technology and

37:28

reindustrialization in the US it has to be driven by public investment not

37:33

private investment public investment because only the state can actually

37:39

compete in this way and this kind of essentially a form of limited Central

37:44

planning they're returning to elements of planning which is really what industrial policy is industrial policy is is a limited form of planning they're

37:52

acknowledging that planning does have an important role in economic and

37:57

Industrial Development and you cannot simply leave everything to the free market and the ultimate irony is this is

Ronald Reagan's trade war on Japan

38:03

not new we've seen this happen in the past of course in the cold war between

38:09

the US and the Soviet Union in which the US began implementing industrial policy and had many of these State

38:15

interventionist policies these Keynesian policies that were completely mainstream and it was the Republican president

38:22

Richard Nixon who famously said we're all keynesians now and it wasn't until the rise of Ronald Reagan in the 1980s

38:29

and Margaret Thatcher in the UK in the late 1970s and the turn toward neoliberalism that the US abandoned many

38:36

of those state-led industrial policies however you can also go back even to the

38:42

Godfather of neoliberalism Ronald Reagan himself and he also used trade War

38:50

economic war and protectionist policies against Japan and in the 1980s there was

38:56

a lot of propaganda in the US you can see this reflected in Hollywood movies and there was all this propaganda

39:02

claiming that Japan would become the world's economic superpower it had had

39:07

seen overseen massive Industrial Development like China has done and by

39:13

the way the way that Japan developed technologically and became a technological superpower by the 1980s is

39:20

also through state-led Industrial Development now in the case of china it was obviously socialism but in the case

39:26

of Japan it was you could say State capitalism and this is shown very clearly in the research by the political

39:33

Economist chers Johnson in his famous book on the MTI the ministry of

39:39

international trade and Industry and he looks at Japanese industrial policy and

39:45

shows how its state-led Economic Development helped it move up the value chain like China has and instead of

39:54

talking about the free market and criticizing protectionism what did the Ronald Reagan administration do Reagan

40:01

imposed 100% tariffs on Goods produced

40:06

by Japanese electronics companies so preventing Japanese electronics

40:12

companies from competing and getting access to the US market now this is infinitely ironic because Ronald Reagan

40:20

was a right-wing neoliberal poster boy and his famous slogan was that the

40:26

government is not the solution to the problem the government is the problem however in 1988 one year just a few

40:34

months after Ronald Reagan imposed 100% tariffs on electronic products from

40:40

Japan he gave a speech a radio address talking about the importance of free

40:45

trade and criticizing protectionism Ronald Reagan said that we must reject protectionism and reaffirm

40:52

that more trade not less is the wave of the future he claimed that one of the key factors behind our nation's great

40:59

Prosperity is the open trade policy that allows the American people to freely

41:04

exchange goods and services with free people around the world he quoted Adam

41:10

Smith In The Wealth of Nations which I'm sure he's never read Because when Adam Smith the classical political Economist

41:16

was talking about free trade he meant free trade free of economic rent free of

41:23

the feudal landlords that had dominated before the rise of capitalism his idea

41:28

of free trade was not the free trade that we hear from these neoliberal propagandists so of course these

41:35

neoliberal dog dogmatists they never actually read Adam Smith but anyway the point is is that Ronald Reagan invoked

41:42

Adam Smith talking about the Folly of protectionism and Ronald Reagan said

41:48

that over the past 200 years not only has the argument against tariffs and trade barriers one nearly Universal

41:55

agreement among economists but it has also proven itself in the real world

42:01

where we have seen free trading nations Prosper while protectionist countries

42:06

fall behind Reagan said that a few months after putting 100% tariffs on

42:13

Japanese electronic Goods so the reason I keep stressing this point is that no

42:18

one actually believes in this myth of free trade and the free market and even

42:24

comparative advantage this is the prop Anda that neoliberal sophists mainstream

42:29

neoclassical economists at institutions like the IMF and the World Bank or these right-wing think tanks and libertarian

42:36

think tanks this is the propaganda that they try to tell poor countries that they should Implement meanwhile every

42:44

single Advanced developed industrialized economy did not develop through free

42:50

trade and liberalization they developed through significant protection ISM and

42:57

state support for infant Industries all of the policies that China has used to

43:02

economically develop and now that the West can no longer compete they're simply abandoning this farce this idea

43:10

that they care about free trade and going back to their protectionist history which they have done countless

43:16

times throughout history so this explains the real reasons behind the

43:22

economic war against China on that note I'm going to conclude here I'm Ben

Outro

43:28

Norton this is geopolitical economy report if you like the work that we do here please like And subscribe if you're

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