Why America Will Lose Donald Trump’s Trade War


Why America Will Lose Donald Trump’s Trade War

United States President Donald Trump has declared a trade war against the rest of the world: Russia is under sanctions; China and Japan face tariffs. Now Europe, Canada and Mexico are targets too.

The tariffs affect only steel and aluminum. But the media is agog and aghast. The general consensus is that Mr. Trump has once again gone mad and is destroying the international trading system—from which the whole world benefits—for no good reason.

That’s not true. Personally, I’m as convinced of the merits of free trade as all of those outspoken Trump critics. But the U.S. has not been experiencing free trade.

As I outlined in a recent article, China and Europe have been taking advantage of America for decades. The trade war is already ongoing. America hadn’t been fighting back—now it is.

Donald Trump’s trade war is on—and he may actually win. America has a lot going for it in this war. The dollar dominates the global financial system. America’s power is so great that it looks like it could take on the entire rest of the world in a trade war and win.

But America will not win this war—and there’s an important reason why.

The most obvious reason for us here at the Trumpet is that the Bible says it will lose. The global situation brewing in response to this trade war leaps off the pages of the Bible.

“We have shown how God prophesied a virtual trade war will get underway against the United States and Britain—and how our national economies will falter, and then collapse,” wrote Herbert W. Armstrong in 1968.

In the same article, he warned that the dollar would be in “jeopardy of being devalued”—that the world would turn against the dollar.

Mr. Armstrong proclaimed this prophecy over the decades until his death in 1986—and the Trumpet has continued to proclaim it for more than 25 years—based on prophecies in the Bible.

More recently, in 2011, Trumpet editor in chief Gerald Flurry outlined Bible prophecies forecasting that Europe will form a brief trade alliance with China, Japan and other Asian nations. “Should Europe … find a way to take advantage—even for a moment—of key resources and strategic holdings of China, Russia and Japan, it would have more than enough power to besiege the Anglo-Saxon nations,” he writes in his booklet Isaiah’s End-Time Vision. You can read a more thorough explanation of how the Bible makes this prophecy in our article “Trade Wars Have Begun.”

What have we seen in the wake of Mr. Trump’s engagement in the trade war? German Chancellor Angela Merkel traveling to Russia and then China; French President Emanuel Macron visiting Russia, during which 50 new contracts were signed between French and Russian companies; Russian President Vladimir Putin visiting the European Union for the first time since his reelection, giving conciliatory tv interviews about healing the rift between Russia and the EU; even talk from Europe that it could split with the U.S. and drop its sanctions on Russia; German leaders and writers wondering if China would make a better economic partner than the U.S.

It’s also open season on the U.S. dollar. China’s government-run Global Times declared last month, “The real culprit is the monopoly of the U.S. dollar in the global market” and said the way to prevent trade war is to “allow greater use of other currencies such as the yuan and the euro.” Putin agreed. He told the Russian parliament that “the whole world sees the dollar monopoly is unreliable: It is dangerous for many, not only for us.” Even Europe is looking to move away from the dollar to diminish America’s power to impose sanctions.

The exact scenario the Bible warns of is building: a Eurasian trade bloc opposed to the U.S. Mr. Flurry described the results in the Trumpet’s December 2014 issue:

America’s enemies are going to cause economic problems and bring on destruction in many ways “until thy high and fenced walls come down, wherein thou trustedst, throughout all thy land: and he shall besiege thee in all thy gates throughout all thy land, which the Lord thy God hath given thee” [Deuteronomy 28:52]. The real pressure is coming from without. “In all thy gates” refers to a trade war. The enemies of America, Britain and the Jews will attack their currencies, their financial markets and their economic might.

But this does not fully explain why America will lose this trade war—it only tells us that it will.

There is a lot going in America’s favor. The dollar is so prevalent that when Europe and China trade with each other, they do so in dollars. Across the world, companies are desperate to expand their businesses into the enormous American market. Germany’s economy relies on exports to America so much that a reduction in sales to Americans could push the country into economic or even political collapse.

I think it’s entirely possible that Mr. Trump will be far more successful in his trade war than most in the media expect. But the Bible tells us that even if he succeeds in rolling back some of America’s economic defeats, his success will not be long term.

Part of the reason the U.S. cannot win in the long term is its debt. America’s economy is built on debt—consumer debt, corporate debt, government debt. Government debt especially is expanding at an unprecedented rate. Never before has the U.S., when not at war nor dealing with a recent financial crisis, ever borrowed so much. There are no real plans to contain it.

Much of this debt is owed to foreign countries. China and Japan together own more than 10 percent of it. This gives them considerable leverage. More importantly, these countries know that if the dollar loses its place at the heart of the global financial system, investor willingness to loan money to the U.S. will disappear overnight.

Ending the dollar’s hegemony is not easy. What could replace the dollar? There are currently no good candidates. The euro threatens to collapse with each new election. China has been caught manipulating its currency too many times for investors to fully trust it. But the desire to end dollar dominance is growing. It will take time—another reason to suspect Mr. Trump may have some temporary success—but once foreign powers displace the dollar, it will be hard for the U.S. government to remain solvent. The nation has lost the ability to remain solvent, even in good times, without borrowing hundreds of billions of dollars each year.

This gets us closer to the root cause of why America cannot win this trade war. As Trumpet executive editor Stephen Flurry wrote in the April 2018 issue, debt is a moral issue:

We are a nation focused on instant gratification, selfishness and greed. This explains why the wealthiest nation in history is still borrowing astronomical amounts of money. If you want something you can’t afford, you charge it on your credit card. If you want government benefits the nation can’t afford, you vote for the politician who promises to borrow money to give you what you want. President Washington was deeply concerned about imposing a financial burden on the next generation. But who even considers what kind of burden we are placing on our future generations?

Living according to the spiritual principle of giving produces prosperity. Borrowing is about getting for self, regardless of the consequences. God says in Acts 20:35 that it is more blessed to give than receive. If you are giving, God says you will be blessed. If you are living within your means, saving, managing and preparing for the future and thinking about your children, then you will be blessed!

Psalm 37:21 says, “The wicked borrows, and cannot pay back, but the righteous is generous and gives” (Revised Standard Version).

As a nation, we have dug ourselves into a pit from which we will not escape, purely because of selfishness and greed.

America has a lot of economic strength—strength it could use to fight and even win a trade war. But it is undermined by its moral weakness.

Debt is not the only moral factor weakening the nation. There’s division, corruption in leadership, the breakdown of the family, etc. Each one of these weakens the nation in tangible, practical ways.

Which leads to the most important moral failing—and the core reason why America will not win this trade war. God says He is actively punishing the nation for its moral failings. In Deuteronomy 28, God tells America that He will bless it if it obeys Him, and He will curse it if it disobeys Him. These include economic curses—and even trade sieges.

This is why America cannot win Trump’s trade war in the long run. The only real route to long-term victory is repentance—solving the deep, underlying moral problems by turning to God.

I’m afraid my quick explanation of why America cannot win raises yet more questions. Why does Deuteronomy 28—a passage given to ancient Israel—apply to the U.S.? Why is God so interested in the morals of this nation? If terrible economic collapse is coming, what can I do?

These are important questions. While I cannot answer them in this brief article, I can point you to a book that does. The United States and Britain in Prophecy, by Herbert W. Armstrong, was his “bestselling” book (we give it away completely free). It gets to the real cause of America’s problems and the solutions—solutions that apply to the nation and to your own life. If you haven’t already read it, I urge you to request your free copy.