and the US has really done it this time you know once you see the CP cup here it means that I don't care anymore and things are really going down so sit back P yourself a stiff one this is going to be a new segment going forward where I just talk I just Ramble On You can just leave this on on on play go do your stuff vacuum the floor exercise drive your car and let's get on it right you guys nothing nothing's going to stop the February tariffs coming we got to understand what's coming
for the world economy you know we never thought that Trump would do it we all speculated that he might but he has really pulled the trigger this time and he's not going after traditional adversaries like China or Russia they are going after their own G7 airlin right we have literally smashed into the iceberg with this one and it's really indicative of how countries especially the G7 they're just too relying on trade with the US and seriously what do you think was going to happen the moment Trump figured out that hey 60 70 or 80% of
your trade is relying on my economy on the US consumer Market he's going to weaponize it right and Canada should really have known better about it they have faced Trump's ter back in 2016 2016 all the way to 2020 there was a lot of volatility there was a lot of trade threads and Canada should have really taken a time back then to diversify their supply chains diversify the customer base away from the United States and now what do we see here they're getting hit with a 25% tariff and this is very damaging to the entire
economy a lot of trade a lot of car a lot of a lot of uh materials a lot of oil flows from Canada all the way to the US so 25% tariff is enough to actually stop the flow of goods right because it's not just the US consumer who have to pay uh the additional tax they might actually move away from buying from Canada itself the Canadians they exporters might be forced to eat the Tariff they might be forced to pull back and lower their pricing which is going to damage a lot of jobs a
lot of Industries back there we have to understand that oil exports most of it from Canada goes to the United States as well the infrastructure the pipelines uh uh the refineries they all set up with the main purpose of exporting oil selling oil to the US at a big discount so even at this moment Canada they're not getting the most amount of money the most amount of Revenue that they can get and because the whole system is not geared to export to other countries that need oil and gas more they're getting a very raw deal
I me look around the countries who really needs energy right now it's Europe uh because their economies as we all know is the void of Russian gas and their Industries are the industrializing so they definitely need the energy and for China their economy is growing so they need the oil exports but Canada well they trapped with the US for quite some time now you think about it what's Canada going to do at this point of time you know they're threatening dollar for dooll tariffs but the most damaging thing they can do is to cut off
oil and energy oil and gas power to the United States now if they do this we can just imagine one can imagine that effects are going to be extremely horrible for both sides you know for one 90% of Canadian Oil goes to the United States I think it's maybe even 95 or 98% and the effects will be tremendous oil and gas Industries in Canada where they're going to get de decimated and in the United States what's going to happen well around 20 to 30% of their refining capacity is dependent on Canadian Oil so you can
just imagine when you walk to the pumps to pump your gasoline your diesel if you're American well your costs are going to go up you know we all heard that Trump you he's going to pump out oil right but here's the fact even if he wants to go after cheap Shell Oil it's going to take anywhere from 6 months to a few years at the earliest for it to happen and Industries big oil companies they're going to do it under Fire this time they'll be drilling for oil as interest rates stay high and as inflation
stays high as well and do you think they can really accomplish it so this state of affairs this tariff war between the United States and Canada they're going to destroy both economies here now for Mexico it gets a little nuanced now as we know that Mexico is basically uh the southern manufactur h of the United States right they manufactur a lot of things for the us a lot of gear a lot of tractors for John Deere for example comes from Mexico they build it there and they they ship it to the United States now Trump
of course is unhappy with this deal right he has been threatening John Deere you know got to make your stuff back in the United States or else we'll slap a big tariff with you and now with the 25% tariff what Trump just declared to Mexico what Trump just declared to the world is that we one we really want to resore our Industries back to United States and we don't care about your economy and how is this going to evolve right is Trump really going to continue a 25% tariff for the next four years because if
it does it's going to jack up the cost of cars it's going to check up the cost of manufactured goods in United States for the next four years or is he going to use this as a bargaining chip to Mexico telling him hey you know we'll drop terorist but we want you not to accept Chinese trade we want you not to accept uh factories like byd coming in and if that happens it's a very big question right will the Mexicans fall will they bow down to United States because one cannot underestimate the influence the US
has in the Western Hemisphere they're just above the Americans um I mean they're just above the Mexicans and because of this they have a lot of influence that goes all the way back hundreds of years and what of the Mexicans really going to do with this are they going to consolidate with China which I think is the smarter move but if they do it they have to prepare for the industries their economy to take a very big temporary hit right Chinese companies they can always come in they can always build more factories and Export to
the world from Mexico and then Mexico more or less will become hand in hand with China to export to places like Latin America right let's not forget that countries including Brazil Argentina all these economies they are growing very very fast and a lot of Chinese Goods a lot of byd cars they are being pushed out to Latin America so it it is very conceivable that Mexico rebounds the United States and joins hand with China to push back against the Americans but will they this is the very big question and at this point of time at
least to me it's really a big coin toss but let's talk about the big fish here what is China going to do because China they export a ton of goods to the United States over half a trillion dollars and this will undoubtedly drop you know a 10% tariff it really sounds small but in certain Goods the margins are razor so a 10% tariff is enough to eliminate the incentive of shipping Goods to the United States now obviously the first order effects is going to be Americans consumers the US consumer paying much more for their everyday
lives now there's a meme which is not really a meme it's a fact that 70 to 90% of stuff in Walmart are made in China so when you grow grocery shopping right when you buy your new furniture when you go buy even some food stuffs when you go buy plastic toys the cost of all these are going to go up you know even Trump himself understands that you can't Hammer China without severe repercussions or else he wouldn't have just increased the Tariff by additional 10% would have gone all the way to 60% who have gone
all the way to 100% it doesn't make sense unless you factor in this Fear Factor if not Trump would have at least imposed a 25% tariff on China as well but by far the worst effect for the United States is China building back their domestic consumption this is just going to saw over time and understand what this means guys if China decides to boost their own domestic consumption a few things will need to happen well firstly China will need to stimulate their economy and where do you think the money is going to come from right
well China they can always issue bonds they can always borrow money from their own C citizens and the world but more likely than not China they're going to use their enormous amount of Trade Surplus that they' have gained with trade from the United States from the world know China earns around $1 trillion of Trade Surplus every single year now with the 10% Tariff of course this additional tax is going to drop the trade surplus from the United States so maybe not 1 trillion is going to come next year in the years to come maybe it's
800 billion maybe it's 900 billion but that's a lot of money that China will use to grow their own domestic consumption China's really giving out a lot of vouchers to the citizens to spend they already having a lot of programs that you trade in your old staff will give you a new car A new EV and they're subsidizing a lot of the cost some it's even 5 to 20% of the entire EV cost in some cases so the United States they've effectively just shot themselves in the food and it's so bizarre that Trump can't really
see the second order effects of this now if China decides yes I'm going to use all my US dollars to boost the domestic consumption what do you think is going to happen to the United States bond market what do you think is going to happen to us bonds us treasuries China is definitely not going to fund their own containment they're not going to take their money their heart earn money at the trade surplus and push it into US Assets Now even if we take away the threat of the assets getting confiscated like in Russia's case
China knows two things is going to happen right now firstly the United States they are going to debase their currency because this move of trying to resure your industri tariff is not going to work Trump is going to debase the currency even more so China by holding a lot of us bonds they'll be losing a lot of purchasing power and on the other hand China is going to use this bonds this money that they have they're not going to us bonds going to push it to the beltro projects they're going to fund their own consumption
they're going to help raise the living standards of their own citizens so what the United States just confirmed is making China into a bigger consumption power and if China controls the supply chains of the world and if they are growing Market a growing consumer Market what does that do it makes China into a even bigger global economic power now for us me and you people like me living in Singapore people like you I don't I don't know where you're from maybe you're living Argentina Brazil Europe maybe you're in Japan maybe you're in Australia what do
you have to prepare for a global currency crisis your the value of your currency is going to drop and we need to understand why this is why a US dollar shortage is probably going to come thanks to the tariffs now we have to understand the mechanism the black box of how everything works every country in the world today yes they conduct bilateral trade with each other you know China conducts a lot of bilateral trade with Australia Singapore XYZ country but that is not the majority of trade flows around the US dollar today is still the
dominant currency and whether you like it or not whether you think it's fair or not it is the system that's happening today now if the United States decides to impose a 10% 20% 60% tariff on uh Imports coming in from other countries one mean it means that the United States will be spending less dollars outright not buying any products from this countries so the flow of dollars from the US consumer is going to stop flowing to Global economies out there exporters still get in less dollar revenue and what does that do in effect that impoverishes
countries around the world not just of tax revenue but of dollars as well and when that happens we are going to get a situation like what we are seeing for example in Europe where the Euro has been plunging you can see it in Brazil where the Brazilian real has been plunging Australian dollar is also under enormous pressure as well the yen is also collapsing we could see this whole currency crisis in 2022 happen once again which means local inflation is going to saw now the entire system is built in such a way that every country
today they owe each other a lot of debt that is denominated in USD so they will have to find a way to get the money to pay off their bond holders to pay off people their own citizens who hold US dollar denominated debt and the only way they can do it realistically is to sell up their own currency go to the open market to buy a bunch of US Dollars and this will just send the dollar flying higher and weaken their currency so it's a doom Loop and Trump has just triggered that now the long-term
consequences of this going forward is extremely horrible for Trump it's horrible for United States they might win this tariff war in the short term in the next few months years maybe over the next four years as well but what we're going to see is a big diversification with breaks they're going to go and band together with countries like China who are the fastest growing economies the bricks Nation and where Supply chains are concerned China is very isolated compared to the United States so they're not really that affected by tariffs at all which will bring us
to more dollarization you know in the past it used to be China going to other countries telling them hey you know something's going to happen to you uh it's best that you ditch dollars and you trade reverse using your local currency we'll take Singapore dollars we'll take Australian dollars and will pay or we'll buy in the Chinese Yuan whatever the case of the arrangement is and now what Trump just did is to confirm the Chinese alarm Bells right Trump just told the world that hey China is Right China is right about that and if we
could do things to people our neighbors like Mexico and Canada what do you think we are going to do to you so I think going forward we are going to live in a world that's extremely bated guys I mean especially when it comes to investing we could really see less incentive to buy us Assets in the long term now shortterm a lot of people might actually pile into the US markets because they're all scrambling for dollars right and once you get a big pile of dollars what do you do you buy into US assets but
in the long term as countries decide to decouple more from the United States the consumer Market they'll build up their own consumer base they'll build up their own stock markets especially when it comes to China so what Trump just did is really crippled the future of the US economy now it sounds strong I get it make America greater game build America back better whatever uh symol whatever catchphrase you want to use but going forward I don't think this is a very good idea so I wish everyone here really uh happy end to the Luna New
Year season and as February start don't really be surprised if things gets worse right I mean it's four years of the Trump Administration but it could last for much longer than that
