The US is LOSING the Tariff War... It's over. (China, Bitcoin, MARKET MOVES)

0:00 You know what bothers me about these tariffs is that the White House will not tell you whether there are talks with China or not. And it's an unsettling scary feeling really because we all know if they were to reveal the truth, which is obvious by now. Can you clarify is the administration talking to Beijing specifically about tariffs or not? Well, we're not going to talk about who's talking to whom? You guys are not talking about it. So, is that true? Uh, look, they have a different form of government. I'm not going to get into uh the the nitty-gritty. You said you didn't know if President Trump had spoken to Xi Jinping. Do you know now? Again, I would say there are no trade talks with China at all whatsoever. They have not caught. And if this were

0:45 revealed to the public, it could cause massive loss of faith in the US economy, in US assets, in the US dollar. It could cause a collapse of the US dollar taking us down a path where the US dollar begins to lose global reserve currency status. And overall in trade deal negotiations it is a complete loss of leverage for the US to dictate any terms. And the reality is we need to prepare for this potential outcome as well. The downfall of the US economy. Now this is not meant to be unpatriotic. It is just a realist practical look at what is happening. And the US may have simply overplayed its hand. It has already been like a month since Liberation Day tariffs were announced on April 3rd. And there has been not a single trade deal negotiated with the

1:31 dollar down about 5% on the month. And China today released a video warning other countries against caving into US tariff demands. Bowing to a bully is like drinking poison to quench thirst. The US once accused Japan of dumping semiconductors and crushed companies like Toshiba. Later, it forced Japan to sign the Plaza Accord, pushing the economy into decades of anemic growth. The US also used long armed jurisdiction as a weapon, breaking up France's industrial giant Alston, robbing the country of a national champion. History has proven compromise won't earn you mercy. Kneeling only invites more bullying. China won't kneel down. Okay, so China won't kneel down. This was not the response we were looking for. We

2:18 were really looking for them to just come crawling back to us. But in the video, China is referencing historical scenarios where the US applied tariffs to Japan and France. And then once that was applied, they increased the pressure, forcing them to sign other agreements and compromises. Ultimately, this caused Japan's last decade. So if you ask rock about what happened here in the 1980s, the US imposed tariffs and trade restrictions on Japanese imports, including Panasonic. So the US applied 100% tariffs in 1987 on certain Japanese electronics including computers, TVs, power tools. This caused economic weakness and with that the US led additional pressure on Japan with the Plaza Accord which depreciated the US dollar relative to the yen and other currencies causing Japanese exports to

3:03 skyrocket in price. And in the end, Japan collapsed as we all know with the US having accounted for 35% of Japan's total exports in 1985. So next I asked Grock, well what about in 2025 with China? Will the US tariff strategy work? And Grock basically responded, basically it's no. So reducing the trade deficit likelihood low to moderate. China's goods may be rerouted through other countries like Mexico evading tariffs. Well, what about for protecting US industries? Grock also says likelihood is low. Building domestic capacity can take years. Other countries may also fill the gap being more competitive than the US. What about pressuring China for concessions? Likelihood here is also very low. And the reason is China already diversified

3:50 their export markets. The US share fell from around 20% to just around 13% in 2023. And Beijing's non-tariff retaliation, including the rare earth restrictions, strengthens its position in critically strategic ways. They are also building trade ties with Southeast Asia, the EU, Japan, countering US's isolation efforts. And so the conclusion here according to Grog is the tariff strategy is unlikely to fully succeed. Now what happens if there's failure? We have no significant reduction in the trade deficit, no boost to US manufacturing or job creation, no concessions on trade fentinel or anything. And we have negative economic, political and geopolitical fallout and ddollarization with reduced global dollar demand with a projected dollar

4:35 index range of around 90 to 100. Our current dollar index is about 99. So that would be maybe 10% lower from where it is today. And I was thinking it's very possible not a single nation is going to sign a trade deal because they're waiting for China to sign the first deal. Fact of the matter is, why give up any concessions if China is going to be there and say they're not going to give the US anything? And that alone can cause the US to back down for every nation. China won't back down. So the voices of the weak will be heard. Bullying will be stopped and justice will not disappear from the world. The US does not represent the entire world. Trade makes up less than a fifth of the world's power to push back. The rest of the world stands together in solidarity. The US is just a small stranded boat.

5:22 Someone has to step forward, torch in hand, to shatter the fog and illuminate the path ahead. When every nation stands tall, the world will break through the walls of the Gemini. For China, for the world, we must rise and fight on. Wow. Who they've imagined? China looking like the hero here. torch in hand, standing up for other nations, lighting the way for the free trade world. Of course, arguably it's all propaganda, but I want to tell you how I'm dealing with the tariffs. To be clear, we need to understand that this is a consumer tax. Amazon even wanted to show every consumer they want to list next to every item the import tax and how much the markup's going to be. Although later the White House warned Amazon, uh, this is a hostile and

6:09 political act by Amazon and Jeff Bezos later backed down saying they're not going to put this on the main site. They were only considering it for the cheaper Amazon hall site. But in either case, whether they list the import prices or not, you're going to be the one paying for it. And I have decided personally, I'm just not going to pay a single tariff. It's really because Treasur Terry Scott Besson said that this is unsustainable and they're going to be lowering it. So, it is 145% now and you would be a fool to be paying such ridiculous prices when you could probably wait a month or two and then it would probably come down. So, it's a better idea to just stock up on supplies you need or to just stop spending altogether and tighten your belt. And there were also reports the other day shipping containers could be down 30 to 40% in the months of May or June as

6:55 tariff impacts hit. Maybe a good idea to stock up on supplies anyway as we could be seeing empty store shelves. But if I'm not spending and you're not spending and the markets crashed, so everybody's poor and nobody's really spending. And we see the tourists arriving to the US has cratered, right? Travel is down. The number of visitors to the US sinks 11%, the US will be missing out on billions of tourist spending. Then the economy may be going into a recession. And there's this article recently, foreign investors dumped $63 billion in US equities. So people are getting out of tech stocks, S&P 500, Apple, Amazon stocks, hardware manufacturers, global tech. World central banks are diversifying their reserves as well, getting out of US assets. So foreign

7:42 holdings of treasuries as a percent of US government debt have fallen to 23%, the lowest in 22 years. And at the same time, they're starting to pick up other assets, non US assets basically, like Bitcoin or gold. But the US could be in trouble here. You see, Quen 3 was just announced by Alibaba. So this is their DeepSeek model. But this model basically outperforms DeepSeek R1, which outperformed Open AI's 01. You know, China's got this technology, too. And plus, Huawei is also developing a new AI chip, a competitor to Nvidia's H100, the Ascend 910D. And so, when we began this whole trade war thing, we had a few aces up our sleeve. We had the Nvidia H100s, we had the Chachi BT OpenAI technology,

8:28 and these two cars that we had are basically gone now, right? China's got that technology. So, what leverage do we really have here? Plus, they're are making good inroads here. They have a robo taxi firm Pony AI which is now going to be doing autonomous driving taxis for 70% less than before. So this is taking on Tesla's robo taxis. Basically they are collaborating with Toyota. So what Japan and China are cooperating now behind our backs. I thought we told them not to do that. And in addition they are taking on Starlink and SpaceX. They launched their first satellites with the Gu Wang constellation of secrecy surrounds their purpose and capability. So, we don't even know what they're doing. And they also launched earlier this year a fourth batch of the thousand sales mega constellation of satellites. So, they've

9:14 got low Earth orbit internet services as well. Hopefully, we'll get a chance to see this in action in the upcoming uh drone wars. And all the meanwhile, the US economy continues to crater. UPS is laying off another 20,000 jobs here. With the reduction in Amazon shipments, you know, the shipping companies are going to see 30 to 40% less business basically, and the layoffs are going to start hitting. Expedia is also laying off 3% of their workforce, which they announced yesterday. And US farmers are in full-blown crisis as Chinese orders for pork and soybeans are plunging over the Trump tariffs. So, China dropped its soybean orders by 97%. Sounds like a big deal. Plus, they've been cancelling Boeing airplane shipments. And it just goes on like this. So, let's pause here and think

10:01 about how this is all going to play out. Well, first of all, the American consumer, the great American consumer, is basically poor now. I mean, I'm not spending. And if you don't spend, then businesses are basically going to start going out of businesses. And we're going to see a full-blown US recession with bankruptcies, layoffs, and skyrocketing inflationary prices caused not only by tariffs, but simply by other predatory businesses like we saw with COVID once prices went up, they just stayed up. They kept them up. And all the meanwhile, the dollar rather than strengthening continues to weaken. Okay, so this is critical. The dollar index touched 98.9 just yesterday. So it has not been strengthening at all really here and this limits our ability to print. So we are not able to stimulate our economy. I have here a chart of the

10:48 S&P 500 versus the dollar index actually over 5 years. You can see that typically whenever the S&P starts coming down the dollar index goes up right? S&P goes down the dollar index goes up. However, the difference here is in this crash, the S&P 500 has crashed, but the dollar index is crashing as well. And this was probably unexpected. It is a fundamental shift of the world order. Speaking of which, Ray Dalio posted here, "It is too late. Changes are coming. Whatever happens with tariffs, the problems won't go away. We are on the brink of a monetary order." Then he continues rambling on here. Look, he's not going to spell this whole thing out for you, but basically, the dollar is done. the US is done. That's what he's saying. And to get into Bitcoin and gold. So, what

11:34 we could be seeing here is inflation, not only from the tariffs, but overall from just everybody feeling poor and not having enough money. Everybody needs to charge more. And it is a persistent inflation that just hangs around. People are poor. You combine that with a collapsing dollar limiting the ability for the Fed to print or stimulate the economy any further and then you have a recession where nobody's spending money and businesses are basically laying off other people and this is a downward spiral and this could cause a systemic collapse wiping out most American wealth and we could see a lost decade and what's unsettling here is that we have initiated a trade war in which we are sitting around waiting for a call and that call may never come and we're just sitting around like ducks. All the meanwhile, our competitors are

12:21 hypermobilizing into trade war mode and they are out there making deals, building more manufacturing plants, reinvesting in their own economies, all the while we're sitting around waiting for a call. And if the US actually loses the trade war, then we will see the emergence of a multi-olar world where the US has lost trade dominance and leverage. And our imagined position as the great American consumer would be revealed to not be a position of strength, but one of weakness. And without leverage, we will not be getting better trade deals, but actually worse ones. And this will cause all US assets to devalue from stocks to the dollar itself. It's very possible this has already begun. collapses and hyperinflation happen fast. We have to put on the table the possibility that we will lose the trade war and in that

13:08 situation it will be disastrous and we will see massive amounts of American wealth simply wiped out. We already saw this happen once before in Japan in the 1980s. That was the last decade and we could be facing a lost decade for America itself if we become the one isolated out. So, all to say, get some Bitcoin. Pick up some Bitcoin, some gold, get some non US correlated assets. You know, Bitcoin currently at 95,000. The projected target is about 1 million, surpassing the price of gold. And you know what? I think the whole tariff thing, maybe we just dropped the whole thing. You know, it was a good try and there are trade issues and other countries are taking advantage of us. But maybe the better way to make any trade negotiation or deal is to find win-win scenarios and to make sure we're

13:54 winning more perhaps. And we don't really need the revenue from the trade tariffs anyway. You know what we should do is just fill the strategic Bitcoin reserve and that is going to pay off our whole entire debt. So here's what you do. You get the US government to buy up all the Bitcoin sending the price to like a million dollars per coin. And then you don't sell it just yet. rather you deposit it into like a and you take out a collateral loan against it and you can take out like a massive loan more than there's liquidity for this stuff and you just pay off your debt with that. Now at some point maybe long in the future maybe not ever somebody's going to start selling Bitcoin. the price could actually crater and there's going to be a lot of bad debt, but that's going to be left with a or the lending defy protocol, but it's not

14:39 going to be left with the US classic low liquidity margin loan, leaving the protocol with bad debt. We can pay off our US debt that way. And you know what? In the most optimal case, there won't even be bad debt. If Bitcoin grows to become the most liquid valuable asset in the world, which it very well may become the whole tariff thing, you know, just it's fine, just lose, right? You win some, you lose some. We don't have to win every single battle. And this whole reassuring manufacturing stuff and dealing with physical products and shipping containers, just forget it, you know? Let's get into the metaverse. Let's build digital assets, NFTts, digital services, digital products. No borders, no tariffs on the digital internet. We build out stable coins establishing the dollar as the global reserve currency

15:25 with Bitcoin as the global reserve asset. And that is all you need to win the tariff saying you can do it or not, whatever. But that's my take. Let me know your thoughts in the comments below and see you in the next one.