Control of raw materials is China's trump card

 Control of raw materials is the most important bargaining chip to hold, in the face of the expectation of a trade war. China had known this was going to happen and it acted with foresight and due diligence, seeking out what is important to control during the last three decades. The USA had been caught sleeping and thinking China has no leverage whatsoever to speak of. Shall we just say that the USA, like Trump, forever thinks that China has no hand to play in global manufacturing? That was a fatal mistake.

Every manufacturing activity starts with having the basic raw materials, which is the most important input in any industry. No use building a factory, knowing production cannot go ahead without the input of raw materials.

What comes to mind in importance is that the basic materials like iron, steel, copper and aluminum are needed in almost anything made, be it cars, planes, solar panels, wind turbines, power generators, electricity transformers, lifts, weapons, household consumer products, building structures and even mobile phones. And we are not even talking about rare earth elements.

China has almost a total grip on all these raw materials, including the refining facilities. How is the USA going to win a trade war with China, knowing China has the upper hand.

China will surely retaliate against the 20% tariffs coming into force in March 4. And it will be a targeted retaliation that is going to hurt the USA in the groin. In fact, an unsolicited retaliation movement will also come from Canada, Mexico and EU. There will be a beautiful sight to behold moving forward. 2025 may see the end of USA's hegemonic power, either an economic collapse or a civil war or revolution when inflation spirals out of control.

Anonymous