China Is Ready to Rumble
Yesterday tensions between America and China rose to a higher pitch on two bits of news: one, that China responded to President Trump raising tariffs on China to 145 percent by imposing a 125 percent retaliatory tariff; and two, the revelation that China admitted to using cyberwarfare against the U.S. Our feature story in this morning’s brief, from Jeremiah Jacques, is about an infiltration that the U.S. State Department called “some of the gravest and most persistent threats to U.S. national security.”
But about those escalating tariffs:
This is quickly blowing up into a bona fide trade war: The rhetoric, scale and collateral damage check all the boxes. The U.S. and China are slapping tariffs on each other at levels not seen in decades, with no clear off-ramp.
It’s not just posturing; these moves are disrupting supply chains, spiking prices and shaking global markets. Both sides are digging in, driven by economic nationalism and geopolitical flexing. That leads us to China’s power move:
Xi called for an alliance with the EU against Trump ‘bullying’: Yesterday, President Xi Jinping hosted Spanish Prime Minister Pedro Sánchez in Beijing to address escalating global trade tensions. He called for a China-EU partnership to oppose what he described as U.S. “unilateral bullying.” He argued that a joint China-EU stance would protect their economic interests and uphold global fairness and free trade. China wants to peel the world away from a U.S.-led economy, and it looks like it’s seizing Trump’s moves as an opportunity. Shortly after the meeting, China announced its escalation in tariffs against the U.S.
The Trumpet closely watches the development of this Eurasian trade alliance, labeled in Bible prophecy “the mart of nations.”
What does this mean for the U.S.? There are worrying signs.
De-dollarization: Xi’s retaliation caused the U.S. dollar to drop against other currencies after an already bad week of fallout over trade tensions. Today’s Telegraph headline: “Dollar Plunges as China Hits Back in Trump Trade War.” The U.S. Dollar Index, which tracks its value against major currencies, dropped about 2 percent after Trump’s tariff announcements, and it is especially volatile today. The pound is surging, and the euro has climbed 4.5 percent in a week.
This article quotes Francesco Pesole of ING saying: “The question of a potential dollar confidence crisis has now been definitively answered—we are experiencing one in full force.”
The dollar has enjoyed unique status for decades as the world’s reserve currency. Hence, investors were willing to overlook huge federal budget deficits and continue to buy U.S. assets.
Now that confidence has been shaken. The Telegraph quotes Jane Foley, an analyst at Rabobank, saying, “The focus has now shifted. The inability of the U.S. treasury market and the U.S. dollar to function as safe havens over the past week has upended market norms and undermined the benefits to the U.S. of ‘exceptionalism.’ If the cost of borrowing for the U.S. Treasury continues to rise, the huge size of the budget deficit could start to matter in a way that it has not before.”
“George Saravelos of Deutsche Bank said the market was reassessing how much the historical premium for U.S. assets stemming from American exceptionalism is still justified under the Trump administration’s radical and volatile trade policy,” the Telegraph wrote. It quoted Saravelos saying, “The market is reassessing the structural attractiveness of the dollar as the world’s global reserve currency and is undergoing a process of rapid de-dollarization. Nowhere is this more evident than the continued and combined collapse in the currency and U.S. bond market as this week comes to a close.”
Gerald Flurry called it: The Trumpet has warned for years about the fallout from the dollar losing its reserve currency status. Trumpet publisher Gerald Flurry wrote back in 2005:
[Herbert W.] Armstrong always believed the Holy Roman Empire would develop because of a crisis—mainly the failure of the dollar. When the United States became the world’s leading creditor nation after World War I, the U.S. dollar became the world’s ruling currency. But now the U.S. is the world’s leading debtor nation. Nations are working to find an alternative to the dollar and are starting to dump their dollar holdings and buy gold, euros, yuan and other currencies. Once the demand for the dollar declines, U.S. creditors will demand higher interest rates, which will make America’s already staggering debt far worse.
Politicians may implement policies to delay economic collapse, but they are doing nothing to reverse this nation-destroying trend. The massively debt-burdened American economy simply cannot continue indefinitely.
Our new Trumpet issue includes “Eliminating the Need for the Dollar,” about the rise of digital money as a currency alternative. At this point, the only thing preventing a currency collapse is the fact that there is no single viable alternative. But all this market volatility shows how desperate investors are to find one. And the day they do find one lurched closer this week.
EU leaders are planning a summit in Beijing in July to meet with President Xi, marking 50 years of EU-China diplomatic ties. The meeting has fresh urgency in light of trade concerns. With America imposing steep levies on China, EU leaders are worried about Chinese goods flooding its markets. The EU also wants to discuss long-standing issues like market access, subsidies and fair competition, especially in sectors like electric vehicles and steel. It needs China’s massive market and supply chains.
But Europe is walking a tightrope, also trying to balance its relationship with America. Europe relies heavily on the U.S. as a key ally and trading partner. Yesterday the EU suspended planned countermeasures on U.S. steel and aluminum tariffs and signaled its openness to talks. The EU is also exploring concessions, like increased U.S. energy imports or reduced tariffs on American goods, but these are politically tricky.
Europe needs a strongman. The Telegraph hopes it’s Friedrich Merz: The paper is calling him “the man Europe has been waiting for,” arguing that Germany’s presumptive next chancellor will be the strong, decisive German leader that all Europe needs. After all:
- He finalized coalition negotiations in just six weeks by “banning alcohol at working dinners and imposing strict schoolmaster-style timetables for the negotiations.”
- He promises major migration reforms, tax breaks for the struggling car industry and major militarization.
- “The pace of his work so far is sure to please allies in Europe, which has something of a leadership deficit. … EU leaders may well have been delighted by the new chancellor’s historic gambit on defense. But it means many are looking to Germany as the piggy bank for what Mr. Merz himself described as a ‘new European defense community.’”
When he announced the new coalition agreement on Wednesday, Merz stated, “It is a clear, strong and clear signal to our citizens, and to Europe, that Germany is getting a strong and capable government.” In the past such a statement would have frightened Europeans. Now it delights them.
A European envoy in Berlin said approvingly, “Both Paris and London should realize Berlin is now ready to move; it will no longer make itself dependent on D.C., but also not on Paris or London.”
The Telegraph wrote, “There are hopes that an assertive German chancellor at the helm of what is still the Continent’s richest economy can be the game changer Europe needs. Mr. Merz has potential to be potentially the most impressive German leader on defense in decades ….”
Merz is certainly a dramatic change from reluctant Chancellor Angela Merkel and weak-willed Chancellor Olaf Scholz.
It is likely that Merz will help catapult Germany to absolutely dominate the Continent. However, political opposition and constraints imposed by the coalition will slow him down. For Europe to truly transform, it needs a leader free of those hurdles who can make decisions that apply to all of Europe. The Bible reveals that a union of 10 kings, or authoritarian leaders, will rise and give their power to an overarching leader. Mr. Merz may be that leader; however, we believe another man will rise to fulfill that role.
Iran nuclear threat: The Institute of Science and Security says Iran’s nuclear program has reached a level of “extreme danger,” Ezekiel Malone reports.
Sudanese Army takes capital: The Iran-backed Sudanese Armed Forces drove out the Rapid Support Forces from the capital on April 7. This could allow Iran to take over this strategic country on the Red Sea.
Japan seeks military action: Japan met with NATO to discuss participation in a NATO mission to Ukraine. This would allow Japanese military leaders and soldiers, who haven’t seen real combat since World War II, to acquire invaluable know-how about modern battlefield tactics and warfare.
Time-traveling fraudsters: Elon Musk says an audit of unemployment insurance claims since 2020 uncovered “fake people not yet born” filing for benefits. The Department of Government Efficiency found 9,700 claims, totaling $69 million, filed by individuals with birth dates over 15 years in the future. One claimant supposedly born in 2154 received $41,000. Never underestimate the ingenuity of cheats and frauds!
His incredible revelation.
