ESW Eurasia Editor Stas Krapivnik: Russia Profits as US-China Trade

The preacher man says its the end of time

and the Mississippi River she's a going dry.

The interest is up and the stock market's down

and you only get mugged if you go downtown.

I live back in the woods you see,

my woman and the kids and the dogs and me.

I got a shotgun and a rifle and a four wheel drive

and a country boy can survive. Country folks can survive.

I can plow a field all day long,

I can catch catfish from dusk til' dawn.

Make our own whiskey and our own smoke too

ain't too many things these boys can't do.

We grow good old tomatoes and homemade wine

and country boy can survive, country folk can survive.

-- Hank Williams Jr. Country Boys Can Survive (1982)

Is Russia the country boy who can survive?

See also Stas recent articles: Tariffs, Friend or Fiend? Part 1 and Part 2

Forget Trump's 'Liberation Day' Tariffs, It's Russia That is Turning Hardcore Mercantilist

In a video recently posted to TikTok, our buddy Tim Kirby talked about the barges full of Russian soybean exports to China that he saw floating down the Amur River through the border city of Blagoveshchensk. It's definitely going to take more than record Chinese commitments to purchase American soybeans to cancel the trade war that's now raging, with China slapping an 84% retaliatory tariff on the 104% tariff the US placed on Chinese goods at midnight Eastern Time Wednesday, April 9, 2025.

Stas explains that as one of the most autarchic countries on Earth in terms of raw materials, Russia has also become a full cycle manufacturer, meaning it can complete complex systems such as nuclear reactors and increasingly short and medium haul airliners via domestically sourced parts and electronics. Or the Russians can source any electronic components they may need for both civilian and military uses from China.

As for Russia-China trade, Stas believes the US-China trade war is massively BULLISH for Russian exports, especially in AGRICULTURE (a sector affluent Western immigrants can enter via Russian farmland leasing) as well as OIL, GAS AND COAL. As Stas believes Beijing will begin ordering Chinese banks that had timidly feared American secondary sanctions to CLEAR transactions with Russian firms, which should further boost Chinese purchases of Russian crude oil in defiance of Washington's threats to slap massive tariffs on countries that still buy Russian energy--as China will already be tariffed by the US anyway!

The domestic problem for Trump's fragile MAGA coalition, Stanislav said, is that China's refusal to buy any US soybeans, wheat, corn or oil, coal and LNG will HAMMER exporters in Trump's electoral base, from Wyoming through the Dakotas and farm belt Midwest, all the way down to Texas. Another knock-on effect Stas says, will be China dumping many goods that Americans won't be buying into the European Union. The result will be further impoverishment of many European manufacturing workers who will not be able to compete with the surge of cheap Chinese goods. The EU will likely respond by accelerating its push toward becoming Fortress Europe, that is, trying to soak up some unemployed via militarized Keynesianism--basically, going back to the 1933-1938 future for the Germans. Unlike many other Russians, Stas is not dismissive of the potential for the EU to turn into an authoritarian 4th Reich fueled by German rearmament and suppression of dissent against war with Russia.

Stas also said in his presentation that Donald Trump Jr. tweeting about potential Ukrainian government complicity in the attempt on his father's life by a supposed lone wolf pro-Ukraine assassin Ryan Routh could be a sign that Volodymyr Zelenskyy's days in powered are numbered. Stas adds that EURCOM commanding four-star General Christopher G. Cavoli could very well be the next senior flag officer on the Trump White House chopping block, as Cavoli's recent presentation to Congress pushed ludicrous numbers of alleged Russian losses. Cavoli himself is likely trying to sabotage the peace negotiations over Ukraine, hence his highly likely imminent firing.

Stas concluded with an update on the war in Ukraine, and by stating that the US war with Yemen's Houthis is far from over. The US bombing campaign and defense of Israel from Houthi ballistic missile and drone attacks is already proving a serious drain on American Patriot missile interceptors (which were already in short supply for Ukraine) as well as cruise missile stocks from the Pacific.

– Belisarius

April 9, 2024

ADDENDUM: from our friends at MovetoRussia.com, which does a great job of concisely explaining WHY the Trump Administration 2.0 is blowing up the post WW2 global trading system and possibly the dollar's world reserve currency status NOW--the urgency of rolling over the short-term portion of the USA's unpayable national debt:

The US federal budget is currently spending $7 trillion, of which $2 trillion is borrowed, and $1 trillion already goes to interest payments — meaning only $6 trillion is spent on actual needs.

The cost of servicing US debt is going up — so the US desperately needs to balance the budget. It will need to spend only $3.5 trillion while paying $1.5 trillion in interest (after refinancing the $9 trillion this year).

The US government would have to spend 42% less — imagine suddenly having to live on 40% less income.

Economically, pulling out $2.5 trillion in spending would translate to an 8.6% drop in GDP. That’s a depression if they succeed. If they don´t they will print themselves out - running inflation amok.

The US has no way out — it’s heading for the economic cliff, and everyone sees it.

Desperately, it tries to raise funds through tariffs to extract extra revenue from the rest of the world based on its "hegemon" status — the problem is, that status is no longer holding. If the hegemon position were strong, US Treasury rates would be going down — as the whole world would want to lend to the US. But the reverse is happening right now. The debt market is playing a requiem for the US empire. Full speed - off the cliff...