The World Bank is supposed to be an organization that loans money, at low interest rates, to help developing countries. The United States have given more than $1.5 trillion to The World Bank.
China, the world’s second largest economy, is one of the top 3 recipients of loans from The World Bank.
China has so thoroughly corrupted the World Bank that it’s still defined as a “developing country” even though it’s the world’s second largest economy.
Through China’s One Belt One Road initiative, it loans billions of dollars to other countries across Asia and Africa to expand its influence and power, but it still gets low interest rate loans from the World Bank. Talk about corruption at a massive scale.
The World Bank just announced that it will loan China $1.5 billion as a developing nation. This is actually a decrease. In 2017, the World Bank loaned China $2.4 billion.
The US corporations and government leaders in power once again are using the US tax payer to fund China’s expansion and ultimately the elimination of millions of US jobs, so they can make even more money.
President Trump responded:
Why is the World Bank loaning money to China? Can this be possible? China has plenty of money, and if they don’t, they create it. STOP!— Donald J. Trump (@realDonaldTrump) December 7, 2019
The World Bank should stop lending to China and, instead, direct lending to countries that don’t have access to financing. That is what it was created to do before China corrupted it.
China Winning Trade Negotiations
After some two years of trade negotiations, the trade deficit with China will likely be north of $450 billion for 2019. According to President Trump, we’re winning. Sounds like “bi-winning” to me.
The tariffs on December 15, 2019, were a bluff by President Trump. That bluff was called by the Chinese.
On Friday, December 13, 2019, the President capitulated on new tariffs set to kick in on December 15, 2019, that would have been on $160 billion a year in Chinese-made goods, a move that would have had the US taxing virtually everything China sells to the United States.
But wait, there’s more.
Not only did China get Trump to cancel tariffs on an additional $160 billion a year of China imports, China also got Trump to broadly reduce existing tariffs already imposed on Chinese goods. Trump cut in half the tariffs on more than $100 billion a year in Chinese imports.
What did the US get in return from China? A promise to buy $50 billion over two years ($25 billion a year) of ag products. WTF?! The math on that doesn’t even make sense. No matter which way you try and spin trade negotiations, China just beat us. And don’t forget, our trade deficit with China will still be north of $450B for 2019. Doing the objective math, we just got our asses kicked.
Folks, you can’t negotiate with a country that doesn’t want to negotiate in the first place. If you try, you end up only negotiating with yourself. Trump revealed to China and the world that the US is much more needy for a trade deal than China is.
Now that Dictator Xi has called Trump’s bluff and won, there’s less likely a chance that Xi will capitulate in the future. China’s strategy of delaying until President Trump is out of the White House is a winning strategy for them. Why would they suddenly change their strategy when they are winning with the one they are currently using? They won’t. Not unless Trump hits them will tariffs so severe that it crashes their economy and ours.
Traders Are NOT Buying China US Trade Deal
I noted in the Saturday Show that traders and investors are NOT buying into the US / China trade deal hype. If they were, we would expect US ag and related stocks to be running higher. Instead, we have some upward movement in the big globalist corporations like Disney, Apple, AMD, etc. This is a luke-warm market reaction to the major trade news announced at the end of last week. Traders are figuring that “the devil is in the details.”
Whatever happened to Tariff-Man? I liked Tariff-Man. I thought China needed a trade deal more than we did. I thought we were going to tariff China into submission:
….I am a Tariff Man. When people or countries come in to raid the great wealth of our Nation, I want them to pay for the privilege of doing so. It will always be the best way to max out our economic power. We are right now taking in $billions in Tariffs. MAKE AMERICA RICH AGAIN— Donald J. Trump (@realDonaldTrump) December 4, 2018
Don’t get me wrong. It’s better to try and fail than to never try at all. President Trump is still the best president since Abraham Lincoln IMO. But let’s have eyes wide-open and not be colored by political bias when it comes to our investing and trading decisions.