As we discussed last week, with Trump's two top economic cabinet members through the Senate confirmation hearing process (Bessent now on the job, Lutnick to be confirmed in the coming days), the economic and geopolitical agenda is ramping up.
The tariff roll out has started.
While concessions from Mexico and Canada dominated the news today, surprisingly less attention was given to the blanket 10% tariff on China (or 10% addition to any existing tariff). In addition to being broad-based, it closes a loophole that has allowed small shipments from China (less than $800) to avoid any applicable tariffs.
And as Trump said, this is the "opening salvo."
The question is, will Trump be as receptive to concessions from China, as he has with Mexico and Canada?
Keep in mind, China is at the core of many of the geopolitical moves being made by Trump. Mexico and Canada are targeted for allowing fentanyl, from China, to enter the U.S. For Panama and Greenland, it's about national and economic security, keeping shipping lanes out of the hands of China.
And perhaps a more explicit clue on what this is all about, after a visit from the U.S. Secretary of State today, Panama says it will exit China's Belt and Road project.
This is about regaining U.S. influence over the world.
If we had any question about whether or not Trump would take a hard line on China in his second term, it seems that we're getting the answer.
Dealing with China is priority number one.
China has staged a multi-decade economic war (driven by its currency manipulation). And in the process they have extracted from the world, the largest pile of foreign currency reserves, which they have wielded to exert influence, and expand their economic warfare into hybrid warfare (economic, psychological, biological, information, political and cyber).
But the stakes have gotten even higher recently. As we discovered last week, with the DeepSeek news, we are in an AI arms race with China.
And as the Chief Technology Officer at Palantir said today (one of most important AI and defense companies in the world), "we are at war with China," and "the AI race is a winner takes all."
And it's a tight timeline.
