Hey everyone. Yeah, thanks for being here today.
So, um, look, the world’s kind of weird right now, right? I mean, geopolitics in the 21st century, it’s like this giant super complicated chess board. And yeah, one of the biggest, most consequential, and honestly most tense relationships on that board is between the United States and uh, the People’s Republic of China.
So, imagine this. the price you’re paying for, say your next smartphone. Yeah, that’s not just about supply and demand curves or whatever. It’s basically being set by this, you know, geopolitical chess match between Washington and Beijing and this trade thing. It’s not just tariffs or trade deficits. It’s like the first chapter in a totally new kind of cold war and it’s going to define the entire century. This isn’t just two superpowers kind of competing. It’s it’s a collision like fundamental clash of different economic philosophies, national strategies and you know visions for how the future world’s supposed to run. For years they kind of coexisted, right? Like trading partners who didn’t totally trust each other but still made money together, symbiotic. But that’s over now. It’s boiling over like full-on economic conflict. We’re seeing something wild here. It’s like a war without missiles, without soldiers. Yeah, it’s fought with supply chains and uh with market psychology. It’s tariffs and tweets instead of tanks and trenches. So, what I want to do here is kind of zoom out and uh take you through what’s actually happening. We’ll look at the playbooks, what Washington’s doing, what Beijing’s doing, and where the cracks really are, and you’ll see a pattern.
China’s, you know, very patient, long-term planning like chess. the US right now it’s more like playing poker with an unstable deck more reactive more political and so yeah you you get these moments that look absurd like Beijing weaponizing rare earth minerals which are you know super critical for tech and defense while Washington uh counters with threats about Chinese cooking oil it’s not even close to symmetrical that asymmetry tells you everything and it’s not just trade it’s structural the US economy’s got these hidden fragilities too much dependence on stock markets really split consumer base and diplomacy that alienates allies right when they’re needed most.
So yeah, that’s what we’re unpacking. How tariffs, industrial strategy, and geopolitical posturing all collide and what it means not just for the US or China, but basically everyone. Let’s start with where things stand right now because the whole quiet maneuvering phase that’s done. We’re in the open conflict era now. Both sides, they’re done pretending. It’s not negotiation anymore. It’s economic warfare. The US and China are both rolling out heavy economic weapons, tariffs, export controls, public rhetoric. It’s all escalating. Markets hate uncertainty, and right now we’ve got volatility on steroids.
So yeah, on the American side, under
Trump’s team, the signal was pretty
clear. Hardline stance, no subtlety.
They floated something wild, a 100%
tariff on all Chinese goods. Like
imagine that. Everything totally
unprecedented. Would basically tax
almost every product from China and say,
„Look, we’re fine cutting you off
entirely. It’s a break, not a balance.“
And yeah, they even talked about maybe
ending business with China altogether.
That’s that’s not small talk. They
brought up weirdly specific things, too,
like blocking imports of Chinese cooking
oil is a kind of symbolic retaliation.
It’s like, okay, sure, oil, whatever.
But it’s also a signal we’re willing to
hit anything. They didn’t stop there.
Port fees on ships supposedly for
everyone, but everyone knows who that’s
aimed at. It adds friction and cost
across the Pacific, right? Makes the
whole supply chain just a little more
painful. Now, Beijing, they don’t scare
easy. And uh they came back swinging but
smartly. Their counter punches are like
calculated strategic pressure on exactly
the places that hurt. Their biggest card
rare earth minerals. So these 17
elements, yeah, they’re not that rare in
the ground, but refining them is messy,
expensive, and you know, environmentally
brutal. China basically owns that
process. They’ve spent decades locking
it down. And these minerals, they’re in
everything. your smartphone, EVs,
missile systems, satellites, all of it.
So, China tightens exports and uh that’s
a chokeold on the global tech and
defense industries. It’s like saying,
„You want to build stuff, you need us.“
That’s not subtle. That’s power
projection through the periodic table.
And then, yeah, they go straight for the
political jugular. They stop buying
American soybeans. Huge hit to US
farmers, right? That’s Trump’s base.
It’s psychological warfare through
agriculture. And it works because it’s
visible. People notice when crops pile
up. Then there’s the sanctions. China
hits US- linked South Korean shipping
companies, ripples through logistics
worldwide. The message is pretty clear.
No supply chain is safe. And while all
that’s going on, the rhetoric shifts,
too. Like the old diplomatic language,
mutual interest, cooperation, that’s
gone. Now it’s we’re in a trade war.
Trump literally said that we’re already
in it. Not a dispute, not a disagreement
war. And his people double down. You’ve
got officials like Secretary Scott
Passent. Yeah. Going full attack mode,
calling out China for bad faith
negotiation, basically nuking the chance
of a deal. Meanwhile, the US Trade Rep’s
office puts out a whole narrative
saying, „Hey, we’re the good guys.
China’s the predator here. We’re
defending the free world.“ They’re
framing it as moral defense, like
America protecting the system from
manipulation. So yeah, both sides now
convince they’re righteous. They see
aggression as necessity. That’s why
there’s no exit ramp. And look, when you
peel back the politics, it’s fascinating
like two completely different strategic
operating systems. China’s approach,
it’s patient, technocratic, long game
thinking. America’s it’s aggressive,
improvisational, short-term. China
believes America’s fragile, dependent on
confidence, on markets, on, you know,
people feeling like the Dow’s doing
fine. They think if you shake that, if
you make Wall Street nervous, you shake
the White House. And that’s actually not
wrong. They’re betting that the US can’t
handle sustained pain. Their analysis is
detailed. They’ve seen how American
politics reacts to every little stock
market blip. When the Dow dips 2%, the
whole media goes crazy. So yeah, Beijing
figures, let’s make volatility the
weapon. Push uncertainty until markets
panic. And once the Dow drops enough,
political pressure inside Washington
explodes. The White House gets cornered
by its own voters and investors. That’s
the core idea. Use Wall Street as
leverage. The threat of a market
meltdown becomes the real bargaining
chip. But this isn’t random. They’ve
planned it for years. China plays like a
chess grandmaster, thinking 10 moves
out. They watch their vulnerabilities,
too. For example, they used to rely on
US helium critical gas for a bunch of
industries. So what they do? They built
their own capacity, diversified
suppliers, and now that leverage points
gone. Meanwhile, the US is like
scrambling to rebuild rare earth
refining capability. That’s the
contrast. Proactive versus reactive. And
China’s system, yeah, it’s state
capitalism. So it’s like insanely fast.
They don’t need Congress. They can just,
you know, make a policy overnight. If
tariffs hit, they spin up government
funds, subsidies for producers, direct
support for factories. They can tell
Alibaba or JD.com, „Hey, discount
everything domestic. Keep people
buying.“ Boom. Domestic demand
sustained. And it’s not random chaos.
It’s planned. They’ve got entire
bureaucracies doing 1-year, 5year,
10-year plans for every critical sector.
Technocrats everywhere, all synced up.
US in contrast has uh a very different
read. They see China as brittle, a paper
tiger. They look at stuff like China’s
youth unemployment over 20% and say,
„Okay, that’s social instability waiting
to happen.“ They see overcapacity
factories built for export markets now
struggling for domestic buyers. They
think China’s running out of steam on
infrastructure-led growth. And yeah, US
officials don’t buy China’s data either.
They think those GDP numbers four or 5%
growth are basically fiction. So the
American bet is apply enough external
pressure and the cracks show. Tariffs,
uncertainty, financial squeeze, it’ll
break the system eventually. So both
sides think the other’s weak. That’s why
it’s escalating. It’s a confidence duel
as much as an economic one. And nowhere
is that clearer than uh the fight over
critical resources, rare earths again
versus like cooking oil. It’s almost
comical. China controls the building
blocks of modern tech. The US threatens
restaurant waste products. The
asymmetries absurd. See, China’s rare
earth dominance isn’t an accident. It’s
decades of policy deliberate. These
minerals exist elsewhere, including in
the US. But refining them, super toxic,
super expensive. So, China leaned in
when everyone else leaned out. Now, they
own the bottleneck. And these materials,
they’re in everything modern. EV motors,
wind turbines, screens, missiles,
satellites, you name it. So when China
says we might cut off exports, that’s
not a bluff. That’s leverage over entire
global industries. Even America’s allies
can’t easily side against that. They’re
dependent, too. The US is now, you know,
racing to catch up. Reopening the
Mountain Pass mine in California,
investing in infrastructure like
Alaska’s Amler Road to reach new
deposits, creating public private
partnerships. There’s even that $1.5
trillion fund from JP Morgan to rebuild
manufacturing. That’s massive. It’s what
they’re calling monetizing the balance
sheet. Basically, the government buying
into national security industries
directly. It’s a a huge philosophical
shift away from decades of free market
thinking. They’re trying to rebuild
domestic production, stabilize supply,
and ideally cut China out. They’re also
looping in allies, Australia, Canada,
Europe to form non-Chinese processing
networks. But yeah, those are 5 to
10year projects. Not fast. So
short-term, the US doesn’t have many
plays. That’s why when you hear the
White House threaten to cut off Chinese
cooking oil imports, it’s kind of
laughable. Like seriously, those imports
are 0.07% of China’s GDP. Rounding
error. And most of that isn’t even new
oil. It’s used cooking oil recycled as
bofuel feed stock. So the US is
basically threatening to stop buying
waste grease. It’s not exactly a master
stroke of leverage. And that contrast,
it’s the perfect metaphor for the whole
thing. China’s control of a critical
resource versus America’s symbolic
ineffective counter punches. It’s not
just uneven, it’s structurally lopsided.
And when you zoom out, you realize this
asymmetry is actually pointing to deeper
systemic issues in the US financial,
social, diplomatic fragility. You can’t
fight a long economic war if your own
base is shaky. So yeah, America is
fighting from a weirdly fragile
position, over reliant on its stock
market, divided consumer base, and
lacking allies. It’s a tough
combination. That stock market thing,
it’s big. Some people call it an AI
bubble. You’ve got huge investment
pouring into AI making tech look
explosive. But under that surface, a lot
of the traditional sectors,
manufacturing, retail, they’re flat or
shrinking. And here’s the irony. The AI
boom depends on hardware and chips that
are uh tied into Chinese supply chains.
Escalate the trade war enough and you
risk imploding your own boom. So if
Beijing rattles the tech chain, stock
valuations fall, market sentiment tanks,
and suddenly you expose a lot of hollow
parts of the economy, could even trigger
recession. It’s uh like self-sabotage
through overconfidence and uh yeah,
consumer spending, another fragile
pillar. Half of all US consumption comes
from the top 10% of earners. That’s
insane concentration. Their spending is
tied to portfolio performance. So if the
market dips, their wallets snap shut.
And when that happens, you get a ripple
effect. Less retail, less production,
layoffs. It cascades. Teaming’s bad,
too. The trade escalations landing right
before Q4, the holiday season. November,
December, critical for retail. So
imagine a market correction hitting then
the wealthy freak out, pull back,
consumption drops, and suddenly, yeah,
you’re in recession territory. But maybe
the biggest own goal here is diplomatic.
The US keeps saying it’s China versus
the world, right? Like global freedom
versus authoritarianism. But then
America’s alienating the very allies it
needs. America first doesn’t exactly
build coalitions. Look at India. They
should be a natural partner. big
democracy wary of China. Instead,
they’re mad over trade disputes and
skipping IMF and World Bank meetings.
Europe’s frustrated, too. The US can’t
fight China and everyone else at the
same time. You need a team. Without
allies, it’s a one-on-one slugfest
instead of a coordinated campaign.
That’s like showing up to a chess
tournament and realizing you left your
queen at home, right? You can still
play, but every move’s defensive. So
yeah, you’ve got this environment where
both sides are convinced they’re
winning, but neither’s actually
stabilizing. Each action triggers
another escalation loop. It’s like a
feedback resonance in a rocket engine.
If you don’t dampen it, it just
amplifies until something blows. And you
know, the markets, they’re smart, but
also super emotional. They price in fear
faster than reason. Every tariff tweet
becomes a volatility spike, and every
Chinese export control becomes a panic
headline. That’s not sustainable.
Eventually, confidence fatigue sets in.
So, what happens next?
Well, you get a bifurcated world, two
parallel systems developing at the same
time. On one side, a US-led block trying
to rebuild independence, reshore
manufacturing, realign with democratic
allies. On the other, a China- centered
ecosystem, self-sufficient supply
chains, digital currencies, and uh
parallel financial institutions. It’s
decoupling in real time. And once you
decouple, you can’t just glue it back
together easily. The world economy
doesn’t reboot like software. It’s more
like tearing a neural network in half
and hoping both halves still function.
Let’s be clear, this isn’t just about
economics. It’s a race for technological
dominance. Whoever leads in AI, energy,
robotics, that’s who sets the rules.
That’s who defines what progress even
means. China’s betting big on
state-driven industrial policy,
centralized funding, national champions.
The US is betting on, you know, private
innovation, startups, open competition,
capital markets. Both models can work,
but they produce totally different
outcomes. One’s fast and coordinated,
the other’s chaotic but creative, and
that’s actually kind of beautiful,
right? Like chaos versus order, the
oldest story ever. It’s just that now
it’s being fought with semiconductors
and supply chains instead of swords. So
yeah, semiconductors, let’s talk chips
because that’s the new oil. Every
digital thing, cars, phones, AI servers
runs on them. And both sides know it.
The US wants to choke off China’s access
to the bleeding edge stuff like 5
nanometer and below chips. The logic is
if you slow their chip capability, AI
defense autonomy. So they cut off
exports, ban ASML lithography machines,
restrict Nvidia sales, and create export
control coalitions. China, meanwhile, is
throwing billions at domestic fabs.
They’re reverse engineering, building
local ecosystems, and yeah, they’re
behind, but they’re catching up faster
than anyone thought possible. It’s like
SpaceX in 2008. Everyone thought failure
meant doom, and then suddenly boom,
orbit. So if they pull it off, you’ve
got a world where two independent chip
networks exist. one Western, one
Chinese. That’s redundancy, but it’s
also fragmentation. You can’t have a
truly global AI if half the planet’s
hardware can’t talk to the other half
software. And that leads to something
even deeper, a philosophical divergence
about technology itself. In the West,
especially the US, we see tech as a tool
for individual empowerment, freedom,
creativity, entrepreneurship. In China,
tech’s seen more as infrastructure,
collective progress, national
resilience, coordination. Neither is
inherently evil or perfect. They’re just
built on different civilizational
assumptions. And that’s the heart of
this conflict. It’s not good guys versus
bad guys. It’s freedom versus control,
speed versus stability, innovation
versus cohesion. So yeah, what we’re
really watching is not a trade war. It’s
an identity war. A war about what kind
of world we’re going to live in. Now
look, I’m a big believer in markets, in
innovation, in people solving hard
problems because they want to, not
because someone ordered them to. That’s
how you get rockets landing themselves
in electric cars that don’t suck. But,
you know, I can also respect China’s
discipline, their capacity to plan
decades ahead to align state and
industry. It’s kind of like an
engineering marvel at the civilizational
scale. But here’s the danger. If both
sides only double down on their
strengths, America on chaos, China on
control, you get rigidity. neither
adapts. The future gets locked into
ideological inertia, and that’s when
systems fail. So maybe the real goal
shouldn’t be winning this war, but uh
surviving it intelligently, making sure
the rivalry doesn’t collapse into global
fragmentation that nobody actually
wants. Because yeah, you could totally
imagine a world split by two internets,
two standards, two currencies, two tech
ecosystems. That’s friction. It’s
inefficiency on a planetary scale. Right
now, the smart play for both sides would
be to uh compete responsibly like rival
engineers, not rival empires. You
innovate harder, but you don’t torch the
launch pad. Still, that’s not what’s
happening. Every time there’s a window
for deescalation, domestic politics
slams it shut. Leaders on both sides
sell toughness because, well, voters and
party loyalists reward it. And it’s
wild, right? Because the global economy,
supply chains, logistics, digital flows
is basically the nervous system of
humanity. If we fry it with nationalism,
that’s like giving the planet an anxiety
disorder. So, how do we fix it? Well, we
start by thinking longer term. You can’t
fight a 21st century economic war with
20th century politics. You need systems
that reward cooperation where it’s
logical and competition where it’s
necessary. For example, energy. Clean
energy tech shouldn’t be a geopolitical
hostage. We should be competing to
decarbonize faster, not to weaponize
lithium. Same with AI. We should be
racing to make it safer, more aligned
with human values, not just militarize
it. Because look, if the ultimate result
of all this posturing is just slower
innovation, and more tension, then yeah,
that’s not winning. That’s entropy. Now,
the US still has massive advantages.
Talent, creativity, capital, freedom to
fail. Those things are like oxygen for
innovation. China’s advantage is scale,
discipline, execution speed, both are
valuable. Maybe the smart civilization
of the future is the one that combines
both. Freedom plus focus. That’s why I
always talk about like making humanity
multilanetary because honestly, this
entire US China drama, it’s so
earthbound. On Mars, there’s no tariffs,
just survival, cooperation, or
extinction. And that’s a pretty useful
mindset down here, too. Yeah. Back to
Earth. If we don’t figure out how to
handle this conflict intelligently, the
economic fallout could be brutal. Think
about it. Global debt levels are already
insane. Interest rates are high.
Inflation’s sticky. And now we’re
layering on uncertainty from trade
decoupling. That’s like flying a Falcon
9 with half the sensors offline. One bad
input and the control loop overcorrects.
So maybe the right move now is to uh
focus less on who’s winning and more on
what stability looks like. Maybe we need
a new kind of diplomacy. Engineer level
diplomacy. People who actually
understand how complex systems interact
instead of just politicians playing zero
sum games. Because you know when rockets
explode, we do a failure analysis. We
don’t just yell at gravity. We fix the
design. Maybe global economics needs
that mindset. Let’s talk data for a sec.
The IMF projects that decoupling could
shave off like 2 and 3% of global GDP
long term. That’s trillions of dollars
gone. Money that could have gone to AI,
healthcare, education, colonizing Mars,
whatever. Instead, it evaporates into
inefficiency and redundancy. And
inflation’s part of that story, too. If
every region starts duplicating
manufacturing to be independent, you
lose scale efficiency. Prices rise.
Consumers pay for politics. So, the big
risk here isn’t collapse. It’s
stagnation. a slow grinding loss of
potential. And look, I get it. Both
sides are playing to domestic audiences.
But at some point, leaders have to zoom
out and realize that the US versus them
game is uh fundamentally outdated. The
real competition now is humanity versus
entropy, progress versus stagnation. So
yeah, imagine a better scenario. The US
and China both push tech progress like
crazy. But instead of walls, they build,
you know, selective bridges, joint
research on climate tech, AI safety,
pandemic prevention. You still compete
in, say, semiconductors or defense, but
you collaborate on survival stuff.
That’s like engineering modular
redundancy. You isolate failures without
losing the whole system. And honestly,
that’s what we should be optimizing for,
planetary resilience. Because this trade
war, this geopolitical drama, it’s not
destiny. It’s just a function of design
flaws in how we structure global
incentives. We can rewrite that code,
but it’s got to start with people seeing
the big picture. We can’t just measure
success by quarterly GDP or stock
indexes. We need to measure uh
existential robustness. How stable is
the system when stressed? That’s why in
my companies, we do stress tests on
everything, rockets, cars, AI models,
because the test doesn’t create the
weakness, it reveals it. Same with
nations. If the US China dynamic breaks
the global economy, it’s not the cause,
it’s the reveal. An opportunity, a
chance to build a smarter global system
that can handle shocks. Think about
energy independence. Think about digital
security. Think about redundant supply
chains. If we treat these as engineering
problems instead of ideological ones, we
can actually fix them. But yeah, that
requires humility. And politicians
aren’t usually great at that. Still,
optimism matters. Progress always looks
impossible until someone builds it. 20
years ago, reusable rockets sounded
insane. Now they land themselves. 10
years ago, electric cars were jokes. Now
they outsell gas cars in some markets.
So the idea that the world can move from
rivalry to smart competition. It’s not
crazy, it’s just hard. And look, the US
has done hard things before.
Moonlanding, internet, genome mapping.
China’s done hard things, too. Lifting
hundreds of millions out of poverty,
building massive infrastructure. So,
both have proven they can do the
impossible. The question is, can they do
it together? Or at least uh without
trying to destroy each other in the
process. If they can, humanity wins. If
they can’t, we just waste decades
fighting entropy while the universe
keeps expanding indifferently. So yeah,
my point here isn’t to like take sides.
It’s just to say this rivalry could
either break the system or evolve it. It
depends on whether we treat it as a zero
sum game or a stress test for
civilization. Because at the end of the
day, the real rare earth is wisdom.
That’s the scarce resource. Everything
else we can mine, we can manufacture, we
can innovate our way around, but wisdom
that’s hard to scale. And that’s what
the 21st century is asking for. So yeah,
if you zoom out like way out, the trade
war is not really about tariffs or
deficits. It’s about evolution. Are we
evolving toward division or toward
synthesis? History tends to favor
systems that adapt and adaptation
requires uh a little cooperation and a
lot of courage. So maybe that’s the real
takeaway. Courage to innovate under
pressure to build better systems while
everything’s shaking. It’s easy to look
at this and say the world’s falling
apart, but maybe it’s just shedding old
skin. Maybe this is what transformation
looks like. Messy, nonlinear, but
ultimately forward. And I think, yeah,
that’s something worth being optimistic
about because when you zoom out far
enough beyond the politics, beyond the
quarterly reports, you realize humanity
is still in startup mode. We’re still
figuring it out. And startups, well,
they fail a lot, but sometimes they
succeed spectacularly. And uh that’s the
bet worth making that we’ll figure this
out that we’ll build systems smarter
than our mistakes.
So yeah, that’s kind of where we are.
Trade wars, tariffs, tech races, but
just early stage turbulence in a
civilization trying to scale. And uh
like with rockets, you get a lot of
shaking right before orbit. Thanks.
