NIMA ALKHORSHID: Hi everybody. Today is Thursday, October 30, 2025, and our dear friends, Richard Wolf and Michael Hudson, are back with us. Welcome back.
MICHAEL HUDSON: It’s good to be back.
NIMA ALKHORSHID: Let me start, Michael, with you. What is your understanding of the meeting between the two presidents, Xi Jinping and Donald Trump? Before going to that, let me play a clip in which they’re just getting together, handshaking between the two presidents. It shows the tone and the atmosphere there.
NIMA ALKHORSHID: You see in the eyes of Donald Trump some sort of, I don’t know, disappointment, like he isn’t received the way that he wants to be by Xi. But what’s your understanding, Michael, when it comes to the meeting? And how do you find it? Was it positive, negative, something between the two?
MICHAEL HUDSON: What is positive? It’s positive that China resisted giving up, unlike Japan and Korea, which totally surrendered to Trump’s demands. You’ll notice in that clip you just showed, once Trump put his hand on Xi’s back, Xi straightened sort of and put on his frozen smile. So you could see that sort of told the picture right now. The buildup to all of this was that it was going to be a positive meeting.
And I think that China orchestrated the whole meeting to enable Trump not to get angry and to do what he usually does and says the meeting is a great success. And in fact, after the meeting, Trump said, on a scale of one to 10, this was a 12. Well, as I look at what seems to have come out, it wasn’t a 12 at all. It didn’t really move forward. And indeed, the U.S. plans were turned down.
But Xi had sort of enabled Trump to get what he really wants, a nice picture for public relations of increased soybean purchases. Okay, so this is not Brazil’s harvest season. This is America’s harvest season. Three big ships are going to be carrying soybeans. So Trump can say, look, farmers, I’ve done something for you.
And there are a couple of other things: modest concessions that China made that are very marginal. They’re concessions that weren’t a sacrifice. But what Trump had wanted was what America essentially has insisted from Russia; let’s have a ceasefire, let’s roll back everything to the way it was before the tariffs.
They haven’t worked. We see, instead of isolating China, Trump’s tariffs have isolated himself from China. And he said, well, let’s go back. I’ll get rid of the tariffs and we’ll make things the way they were.
Well, China’s response is: a lot of things have happened since you did the tariffs. For instance, we’ve done a mirror image. We’ve adopted your policy that national security really has to play a role in our trade policy. And we’ve imposed national security constraints on our exports of raw materials and other gallium and other elements so that we’re not going to export anything that can be used by your military at all.
Nothing was discussed about that. Trump says, well, they are going to relax some of their rare earth exports. But it turns out that what China, according to the reports here from Bloomberg and others, said is: yes, we will relax our exports of what you need for rare earths, but you’ll have to relax your controls.
Number one, you’ll have to remove your constraints on designated companies in China, your list of companies that Americans can’t deal with and cannot import any products with products of these companies, like Nexperia in Holland, that the Dutch government confiscated from China at U.S. demands, which has paralyzed the automobile car battery industry from Germany all the way to the rest of Europe. And the U.S. will have to remove its constraints on exporting high-end computer chips from NVIDIA, the very high-end. It can only export the low, uncompetitive computer chips that the Chinese are now already cutting the NVIDIA market for, by I think, 75%, by producing their own.
So the conditions for all of these nice agreements that Trump has talked about are not going to be met by the United States because Trump has surrounded himself with anti-China hawks. They’re not going to agree to anything. So Trump did most of the talking. And Xi just had his usual enigmatic smile. And afterwards, there’s no mention of any TikTok deal, no mention at all, except that the U.S. would roll back tariffs in exchange for China not selling drugs that could be used to make fentanyl.
But the U.S. pharmaceutical industry is dependent on China for its exports of chemicals and pharmaceuticals, as the U.S. computer industry is dependent on rare earth. So it’s really unlikely that China had to really give up anything at all. There may be just one or two chemicals, and it’ll continue to completely dominate the U.S. market, and the U.S. dependency on China will continue. So China has not given anything.
And usually there’s a memorandum of agreement. And the memorandum of agreement isn’t really a promise because agreements have to be signed and approved by Congress and go through a long political process. No agreement at all, nothing, only Trump saying the meeting was great. Well, he always says the meeting is great. And when there is a press release of any meeting, the U.S. press release is very different from the press release of the other side of the meeting, whether it’s Russia or China or whoever.
So China has been closed-mouthed, and there’s no indication that it’s given up anything at all. So that’s sort of a common denominator of Trump’s meetings. The Dow Jones is up, as it’s been up every single day. Nvidia says, oh, that’s great. Our shares are up. We’re going to sell more to China.
But it also said, we need the Chinese market. If Trump does not allow us to sell the very highest, most productive rare chips to China, then we won’t have the money to engage in research and development to stay ahead and we’ll fall behind. That was what the head of NVIDIA said yesterday at the meeting. So it looks like China has maintained its control. It really hasn’t given anything except a few marginal twists that look good, like the soybeans and the drugs.
I don’t think the U.S. or Europe is going to remove the sanctions against Chinese purchase of the Dutch chip engraving machinery. And it probably won’t even do anything about Nexperia. The Germans have said they’re willing to close down their auto industry and just live with it, as Germans do. So that’s basically the situation. I think it was a win for China in resisting the giveaway and the surrender that Korea and Japan gave.
NIMA ALKHORSHID: Richard, your take.
RICHARD WOLFF: Well, as I read the history of these sorts of agreements and memos, even when they do go through the political process and become so-called legitimate, binding, and all the rest, that they always have two qualities that people forget. The first quality is that the world is finite and everything changes. And whatever you agree to today can be unagreed to one way or another tomorrow. The second thing is that there are always unspoken agreements that coexist with whatever is spoken or written about in press releases.
The two of them, for example, may have come to some agreement about TikTok, but that includes an agreement not to talk about it for the next three months or the next six months, or God knows what they might have done. They might have changed what the balance will be between the portion that basically China holds on to and the portion that the Americans have some say in because that was being negotiated. And, obviously, that wasn’t easy to resolve, since they’ve been at it for at least six months, if not longer, and can’t reach a resolution, which is why, as each deadline for a resolution approaches, Mr. Trump says, we’re going to extend it another three months and stuff like that. Those are signs, not that you need them, but those are signs that, beneath the surface, other things are going on.
So I’m a little nervous. I understand what Michael just did, and it makes perfect sense. I’m just, I don’t want to hang too much on how things appear in the moment of the meeting. Michael is absolutely right. I’ve never seen Mr. Trump come out of a meeting in which he doesn’t think he’s just done the greatest job imaginable and won the greatest results one could hope for. I mean, it’s clearly pathological. It had nothing to do with what actually happened.
Now, having said that, I want to go back and quote Michael last week, back to all of us. Last week, or it might have been two weeks ago, Michael went through a very, very good rendition with humor of what had happened with the deals made between the United States and South Korea, on the one hand, and Japan on the other, in which the flimflam that we’ve been watching for the last eight months was exercised. Remember, you hit them with a high tariff, and then you offer in return for lowering the high tariff to something less, a deal, but that requires the commitment of hundreds of billions of dollars, say over the next five or ten years, to be invested in the United States. A deal quite similar to what was done with Ursula von der Leyen, you know, from Europe.
The same deal will lower the tariffs a little bit from what we had said, but you have to promise. In the case of Europe, the promise was larger: $750 billion in energy purchases plus $700 billion in investment. Okay. That was outrageous. And it was so outrageous that one had to ask the question that one normally kind of puts aside: what’s really going on here? Did they really commit?
How in the world? Just between you and me and the lamppost, how do European politicians commit to stand in front of their own people and explain that they can’t sustain their free education or their free transport or their subsidized housing or their national health service because they don’t have the money, since they’re spending a fortune on American liquefied natural gas and investing in America? This is political suicide. Even the Europeans, who seem to be very good at that particular activity, even they wouldn’t go that far.
So my suspicion, listening to Michael lay it all out, was that these people are making agreements having absolutely no intention whatsoever of doing this. They have figured out, and I’m going to quote Michael again, they have figured out what Michael just said about Xi Jinping. He stands there, and he has, if I may quote him, an enigmatic smile. And, you know, he lets Mr. Trump do what he likes to do, which is: appear to be in charge, appear to be having a great time, and appear to be successful at whatever he set out to do.
Let him do it. Who cares? It doesn’t matter anymore. Mr. Trump won’t be there three years from now, and a lot of things can happen in those three years, not to speak of what happens later. Sure, we’ll do this; we’ll do that. And then, when it comes to doing it, there’ll be a delay, there’ll be a problem, and there’ll be an unforeseen aspect to it that requires new negotiations, and on and on. That’s what you do when it is not polite to say right in his face, no, because you don’t know what Mr. Trump may do when he’s pressed into a corner.
So you don’t. You don’t. You’ve discovered this is the best way. It’s very important not to aggravate the fellow. And if you need an object lesson, just watch the interactions between Mr. Trump and the Canadians.
There you’ll see a nice example of why it is wiser not to push back very much because you’re going to get hurt in that process. That’s my reading: that the South Koreans thank ICE because that absurd raid by ICE of the South Korean factory in Georgia allowed the South Koreans to back away from what they had agreed to.
The Japanese must be fuming as they watch South Korea, on the one hand, and China on the other not give Mr. Trump even what they’ve been willing to give. You know, it puts Japan in a very, very bad light, along with Europe. So that’s my take.
My take is because it isn’t working real well, and because if I’m informed correctly, there is actually a serious chance that the Supreme Court will somehow invalidate some of the tariff business of Mr. Trump’s. He has to prepare for the very bad look that will give everything he’s done. So he needs some successes. And so he has to go to Asia because the great success he had a few weeks ago has unraveled on him. And now he’s going to shore it up with a visit and lots of photo ops. Other than that, I don’t think much has changed.
MICHAEL HUDSON: Well, Richard, you and I have a forecasting problem. It’s our materialist approach to history. We always expect the most logical thing for other countries to do is to act in their own self-interest. Obviously, that would not help us forecast what Germany has done or what a lot of other countries will have done. And as I look at the agreements that Korea announced after the meetings with Trump, they said, well, we are going to give up the $350 billion.
Remember, the prime minister of Korea said there’s no way Korea can possibly pay this amount of money without essentially imposing austerity on its economy, as you pointed out. And it’s not Japan, it doesn’t have anywhere near that much money. But they said: we agree to the $350 billion. And Trump spelled out that $150 billion of this, that’s a big chunk, is going to be in building a nuclear power submarine. Okay, Korea expects to make a profit, just like the military industrial complex in the U.S. will make on the submarine.
So I can understand it’s giving $150 billion to invest in this huge shipbuilding because it has a shipbuilding industry and America doesn’t. Okay, mutual gain. I don’t know about the $200 billion remaining on equity investments because, as you’ve just pointed out, it didn’t go very well in Georgia. And the loan guarantees, I would not want to guarantee something in which Trump is in charge of deciding who gets the money.
But it looks like they promised it. They’ve also promised to buy more U.S. oil. Well, okay, I think they will. Does that mean that they won’t buy Russian oil? Does that mean that they’ll end up looking like German industry? Well, maybe that’s the case. But at the end, you made the all-important point. What if the Supreme Court says that it invalidates the tariffs that Trump has done? It says only Congress can pass the tariffs according to the Constitution.
Well, is this going to enable other countries to negate the deal they’ve made? Can other countries say: oh, we made all of this deal in exchange for cutting the tariffs? And now that there aren’t any tariffs, we don’t have to give any give back that Trump has been demanding. So there’s no give back. Trump has no leverage over us by threatening to wreck the U.S. market for us. So that will somehow give them an out. Do they have the backbone to do this?
And the same thing with Japan. Does Japan have the backbone to do this? Well, just before you had the meeting in Korea, you had the ASEAN countries of Asia making a free trade agreement among themselves. And that will include trade with China. So it looks like before the meetings begin, the Asian countries were already looking at: how can we replace the U.S. market that we were dependent on so that the United States cannot weaponize its foreign trade and hurt us like they did in 1998 with the Asia crisis when they smashed our economies financially through the International Monetary Fund and forced us to privatize and to sell the commanding heights of our industry to American investors, where only Malaysia was able to avoid all of this crisis?
Will they remember that experience? And is this what has been guiding them? We have no way of knowing. Nobody’s mentioned it at all, but obviously, when they’ve made an agreement, they’re thinking that way.
But I want to go back to China. Let’s look at what China’s real interest is in all of this. There are a number of things that it wants. For instance, if China was to say, here is what we want: one of the things that it wants is to reduce all of the constraints on China. For instance, one of the main things it’s developed is its own airplane industry to compete with that of Boeing, Airbus, and the Brazilian aircraft industry.
Well, the International Transport Authority that’s controlled by the United States has refused to authorize Chinese airplanes. It just won’t sign off on the airplanes. And that means that the Chinese airplanes are not allowed to arrive in other world airports. This is obviously a block. Nobody mentioned that at the meeting, but certainly it’s been a big discussion in China.
I thought that perhaps China would agree to buy more Boeings in exchange for the U.S. blocking this, but apparently the problem is that as long as the Western air companies export and control the market for airplanes, they control the repairs and replacement parts. And they can essentially paralyze other countries’ air transport by simply not repairing and not providing replacement parts. They could do that.
The Chinese did focus on the fact that the U.S. has imposed sanctions on the purchase of Dutch engraving machinery and the whole fight over computer chips. I think the small print when it all comes out of the agreement will mean that, well, you haven’t complied with the United States. Essentially, I think when Xi said the ship of international diplomacy requires two captains in order to work, what he meant is that, tit for tat, what the United States has designed as a rules-based order is exactly the weaponization of trade and investment, and the constraints and the ability to impose sanctions and the ability to withhold exports that the United States has done.
So I think China said: we’ve agreed with you. And Mr. Trump, we’re going to apply the same logic to you that you’ve been doing to us. And if you want us to relax the constraints on our exports to you, you have to relax all of the American constraints and the constraints of your satellites in Europe on your exports to us. So we can buy the most sophisticated NVIDIA chips. We can buy the chip-making machinery from Holland. You will not be able to simply grab our investments in Europe or the United States like you’ve grabbed Russia’s $300 billion in deposits in Belgium. It has to be a quid pro quo, the same rules for us that apply to you. And if you have that symmetry, then we can go along with it.
And it looks to me from the preliminary reports that came out of these meetings that everything was a quid pro quo and a rollback. And that means that the entire last decade of edifice, of specific limits to try to cripple China’s industry, computer industry, airplane industry, and other industries will have to be removed. I don’t see Congress doing that. Mr. Trump may say he’d love to do it and try to blame Congress. I’m sure he’ll blame the Democrats and the left-wing communists like he likes to do.
But I just don’t see anything concrete coming out of these meetings, except for China buying soybeans, as it always does, and a few other U.S. products that it can use productively and that benefits China. I don’t think China is going to do anything unless it benefits China, unlike Korea and Japan, which, as you say, don’t do anything that doesn’t benefit the United States.
RICHARD WOLFF: I want to add: I don’t mean to be hard-nosed about this, but I think it’s a reasonable reading of the history that this is always what happened. Each side gives up what matters least and then proceeds to maneuver in every way it can to evade, to avoid, to water down. And then when even those things don’t work, then there’s the whole illegal, covert activity.
I want to remind people, a big item standing in the way of fighting that war in Ukraine was the dependence of Europe on Russian oil and gas, which the Europeans did not want to give up. So someone blew up the pipeline. All right. That was another solution: you didn’t need an agreement by Angela Merkel or anybody else to make a decision politically. You forced the issue in that way. That’s what I think is happening. And I don’t think we should be surprised.
I think they have decided that the strategy with Mr. Trump, it took them six or seven months to kind of see how up and down, how uncertain, how herky-jerky it all is. When I brought up this stuff about the Supreme Court, I just wanted to use it as an example of the many things that can happen that change the terrain on which all of this is fought.
But, even if the Supreme Court says it has to be Congress in a moment of emergency, Mr. Trump will get the Congress to vote for whatever it is. In other words, he’ll immediately reinstate all of the tariffs that he has going as acts of Congress because he can control at least for another year the votes of the Congress. There’ll be close votes, but he has a good chance of winning them. So he’ll try that. Then the question will be in the interim, while that works out: do they apply? Do they not apply? And then there’ll be a dispute and there’ll be another meeting in some global capital to work on that.
It never stops. This stuff never stops. And while I am impressed, Michael is quite right to be impressed by what the Europeans are willing to do to destroy themselves. And I’m assuming it’s because they think that any other choice they make is even worse. But, if you’re any good as a political leader, you know that the name of the game is not to make the right choice in that moment of extreme, but never to let it get to that point.
That’s your job as a politician. Don’t get to the point where you have to choose between something that’s horrible and something that’s even more horrible. If that’s the choice you have, you have already failed. And yes, you will congratulate yourself for making the choice that isn’t the worst one. But anyone with half a brain knows that your mistake was letting it get to that point, which the Europeans, that’s what they did. That’s why they’re so desperate in their dead end that they have allowed themselves to be maneuvered into, that they have to have a cataclysmic external scapegoat enemy.
And that’s the role of Russia. Mr. Putin has become Stalin all over again, only hyped up even further because you have to hype your dangerous enemy because you’ve done such a terrible job of coping with your existential problems. That’s what happens. It’s really partly what happened in the United States as well.
We overdid the neoliberal period. We wiped out large sections of the American working class’s well-being. And then we’re surprised that, in reaction, that working class brings Donald Trump into power. You know, you’ve let this happen. The ruling class in this country, let this happen. It’s on their watch. They’re the ones who were gung-ho. They’re the ones who must be, at least the few of them who are smart, must be wondering over the last few years when Xi Jinping leads the world in advocating multilateralism, multinationalism, free trade, an open economy in the world, and the United States is closing itself quickly into economic nationalism.
And yes, the end result of that dichotomy is one or the other will give. And if Michael is right, and I think he is, then Mr. Xi Jinping has announced, okay, if that’s the way you want to play this game, we will play the nationalist game, and we’re in a better position to do that than you are, which is correct. The ASEAN agreement, look at that. That is a momentous evasion of what the United States is trying to do: close free trade.
No, they’re opening a free trade. They’re doing it regionally. They’re doing it step by step. They’re doing, but they are creating markets for themselves, all of them, so they don’t have to rely on the United States. It seems to me straightforward and obvious that they should be doing that and that China should take the lead, and that the South Koreans and the Japanese, wink, wink, are looking to make China more of their customers because the United States is too unreliable.
NIMA ALKHORSHID: Michael, do you think that Japan is on the path of becoming the Germany of Asia? Before going to your comment, here is what Pete Hegseth had said before the meeting between Xi and Donald Trump.
[clip starts]
PETE HEGSETH (CLIP): “The [Japanese Defense] Minister and I discussed today the security situation around Japan and in the region remains, as he said, and we agree, severe. The threats we face are real and they are urgent. China’s unprecedented military buildup and its aggressive military actions speak for themselves. That’s why President Trump’s peace-through-strength agenda is so important.
[clip ends]
NIMA ALKHORSHID: The plan, Michael, today for Germany is militarizing Germany. The economy of Germany has suffered a lot during the conflict in Ukraine, and they’re talking about militarizing Germany. It seems that they want to put the money, the budget, in the military-industrial complex. Is that going to happen to Japan, in your opinion?
MICHAEL HUDSON: Well, remember, it’s already happened to Japan once before it happened to Germany in the 1985 Plaza Accords and Louvre Accords, where it agreed to U.S. demands that it increase its exchange rate to make its cars unsalable to the U.S. and to agree to U.S. quantitative limits on the number of cars that it could sell in the United States. Japan, since 1990, has gone into what was called the lost decade, which I guess you could call the lost generation.
Its economy shrank and its population has been shrinking. Its reproduction rates have fallen, fallen, and fallen. So it’s already gone down that route once. And it decides that it likes that route. It can live with that route. That they’re very patient people.
So they’ve already surrendered to all of this. They’ve agreed to buy more U.S. arms that don’t work. They’ve agreed to increase their purchase of 75% American-made rice that in the past they have said they don’t like. It has pesticides. It doesn’t taste as much. It costs much less in the stores than Japanese-made rice. The ruler said, we don’t care what kind of rice the Japanese like to eat. We’re going to stuff American rice down their throats because that makes America great again.
They’ve also agreed to increase the arms, even though the arms from the U.S. are just as bad as U.S. rice, from 2 trillion to 2.5 trillion yen. That’s a 25% increase in their purchase of U.S. arms. There was some worry in the U.S. that Japan might ask the U.S. to pay higher rents for its military bases there.
And instead, Trump has told Japan: you’re going to have to pay us to share the burden of fighting Russia. You’re going to have to pay more for our occupation costs so that we can continue to make sure that you don’t do anything that benefits Japan more than the United States. It’s a win-lose deal. That’s what I’ve promised my foreign policy will be.
And Japan’s going along with this. There was all of this talk before the last two weeks, before the meeting, when Japan’s new prime minister, who’s always been very, very pro-American, said that somehow, well, there may be a plan B. She’s going to increase trade with China. She’s going to open it up.
And I think all of this was a threat by Japan saying, you know, we do have an alternative. There is a plan B. We can always trade with China. And I think that all that talk was just to try to minimize the demands that the United States will make.
But the United States tariffs are still being imposed pretty heavily on Japan’s car exports. But the important thing is that the whole automobile industry is changing to electronic vehicles. And that’s where China has such a vast price advantage in low-cost, battery-driven electronic cars that it threatens not only the U.S. and German and European car industry, but the Japanese and Korean car industries. That’s what somehow nobody was talking about in all of this.
But this is the real thing: if Japan cannot export its cars to the U.S., and Trump is imposing, I think, a 15% charge on them, which still gives Japan enough of a competition for gasoline-powered automobiles, the question is, what’s going to happen to the electronic vehicles, especially now that Trump has fought with Elon Musk over the electronic cars. And if he really does get in a fight with Musk, he can say, okay, I’m going to let in the Chinese automobiles. And, you know, so much for you.
Japan also agreed to continue to rely on U.S. oil, and not try to continue its talks with Russia to formally end World War II and the dispute over who’s going to control which [Kuril] Islands, by agreeing not to buy more Russian oil. And we should realize that one of the things not discussed after the meetings between the U.S. and China was the set of U.S. rules restricting Russia’s oil exports–the sanctions that were meant to punish countries, banks, industries, and shipping companies that bought Russian oil.
Well, apparently, the United States is not going to enforce these rules against China. It is going to enforce them against India, but not against China. So what was not said about the meetings and what was not talked about discussions were the most important results of Trump’s recent sanctions. And it looks, to me, as if China said, we’re not going to go with any of your sanctions. If you really try to sanction, to prevent us from buying oil wherever we want for free trade, then we’re going to avoid our free trade agreements with the United States. And I think you’ll be the loser on that.
There’s one other thing I want to say about what Richard said about the ruling class in the United States, which he reasonably says are not acting in their interest. Well, whose interest are they acting in? And I think if you look at whose interests are not being so damaged, it’s not the industrialists that seem to be running the policy. It’s the financial sector, the rentier sector, finance and real estate, the fire sector, the Silicon Valley monopolies and the oil industry.
Their industries and their interests have all been supported and the military-industrial complex [has been supported].
So it looks like the ruling class in the United States is not industry, it’s the military-industrial complex, which is not exactly a capitalist industry. It’s a cost-plus Keynesian or corrupt giveaway. The oil industry, natural resource rent, and finance and real estate are a rentier society. It’s a finance capital ruling class, not really the industrialist ruling class.
And I think that’s how you can explain how the U.S. sanctions have backfired so much from the point of view of American industrial development and its labor force. And why isn’t the United States supporting industry in favor of the finance capital industries? Because industry does something that the other industries don’t. They employ labor. And if you employ labor, its wages are going to go up. And there’s still a class war against labor here that’s shared by the Democrats and Republicans alike.
I think that if you look at the agreements and who benefits and who suffers from them, if you look at it from the point of view of this domestic class war here, as I’m sure you have a lot to say about, it’s more explanatory about just who has the power by being the donor class over Trump.
NIMA ALKHORSHID: Richard, let me ask a question from our audience here. Here is the question: Should China trust the safety of the soybeans it receives from the United States?
What’s your understanding of China and the behavior of China so far? Because, as we know, the Chinese President Xi was talking as if [they] want to cooperate with the United States. But is the United States willing to build trust in terms of the trades?
RICHARD WOLFF: Well, my assumption is they will test those soybeans very carefully. Most countries do a certain amount of that kind of testing when they import for all kinds of reasons. So my assumption is they will. If they complain and say that there’s something inadequate about them, well, then you know something.
Not necessarily that there’s anything inadequate about them, but that they have a reason they don’t want to buy them. I mean, I’m not going to quarrel with the Japanese; they have every right to prefer whatever rice they want. But the statement that it doesn’t taste as good is, you know, okay, that’s a government that wants to push back. And I understand why the Japanese would want to push back.
You know, for years there’s been a fight between the United States and Europe. The Europeans claim they do not want to allow the United States to export chickens. Because, in the United States, chickens are farmed in an industrial manner, which, if you have any shred of sympathy for the animal kingdom, would horrify you. If you’ve never visited one of these chicken factories, it is beyond a horror story that you could ever develop.
But they couldn’t do that until they developed the following argument: it turns out that one of the normal chemical procedures done on a dead chicken is to douse it in chlorine. So in Europe, it is referred to as chlorinated chicken. And they have all kinds of health concerns about ingesting chlorine when you eat your chicken.
You know, I find this amusing. It may all be true, I don’t know. But I know that the authorities in these countries don’t do that unless there’s a good reason. And whoever makes money by processing chickens in Europe that are bought from the United States just lost a fight with whoever profits by keeping those chickens out.
And the government made the decision which way to go and then called in the bullshit artists who come up with the argument about chlorine, which may be true. I know, I’m no chemist, I have no idea. You could go on and on and on. These kinds of arguments are an old, established part of international negotiations over trade. Because, in every quote-unquote free trade period of time, interests were always at work trying to carve out exemptions.
For example, throughout the whole neoliberal period of the United States, if you want to call it that, in the 1960s, when the United States was at the top of the pile in the world economy, the United States carved out an exemption for pickup trucks. I think we’ve talked about this before. Starting in the early 60s, the United States negotiated a tariff and imposed it on everyone else. And the tariff applied to pickup trucks made outside the United States and brought in.
In fact, I believe that was connected even to the chicken business. But in any case, the important point is a tariff was put on the pickup truck, giving American automobile producers a profit bonanza because they could block competition from Volkswagen and all the other Europeans who were able to produce a better, cheaper pickup truck. But now they couldn’t bring them in because with the tariff, it was too expensive.
And so suddenly, Ford and General Motors, in the period when already they were facing competition and could see they were going to lose–had salvation. What did they need to do? They needed to convince the young American male that his masculinity was wrapped up in having and driving a pickup truck. Whether he needed it or not, had nothing to do with it. You were manly.
It was the way Marlborough sold its cigarettes and that’s how the car companies did it too. You got off your horse smoking your Marlboro and climbed into your pickup truck to finish your Marlborough. You are now a real man.
The culture of America, everything–it had to do with a tariff imposed in the middle of an anti-tariff-free trade regime. You’re now seeing politicians agree with the United States. Michael may be right. They may be really caving in.
But I’m not so sure. I think that’s their short-term strategy, for sure. But they may be assuming, I think they are, that there will be ways to minimize, to postpone, to evade, and eventually to undo whatever it is they’re agreeing to with this gentleman, and he too will pass. And that’s what they’re going to focus on.
MICHAEL HUDSON: Well, that’s certainly the logical thing for them to do, Richard. You’re quite right. I guess the equivalent to the auto trade a half-century ago is the computer trade today. And just before the Trump meeting with President Xi, you had the NVIDIA meeting, where its head, Mr. Huang said that he told the reporters in this press conference that NVIDIA continues to be shut out of the Chinese market because of the U.S. constraints, and that that’s going to hurt America more than it hurts China.
And he delivered his big speech, and he said that without exporting more to China, even though NVIDIA just became, I think, a $4 trillion company yesterday and its shares were soaring on the New York Stock Exchange and Asian markets, that Chinese chip makers would soar even more. They’ve jumped significantly with NVIDIA leaving the country.
And so, certainly, the investors in China and investors in the Chinese stock market believe that the United States is not going to release its constraints on NVIDIA’s advanced computer chip exports. And so all of that happy talk about if you do this, we’ll do this and everybody will be happy, those big “ifs” are not going to actually materialize. So, I can say more convincingly that this is going to happen for the computer chip market and America’s agreements with China than I can say with Korea and Japan.
But of course, each of these countries has minority parties. And you may see, and the way to make your forecast come true, Richard, is for Korean and Japanese voters to react just as European voters have done. They want to throw the rascals out of the current government. Korean voters say: we want to put Korea first, not America first. The Korean War is over.
And the Japanese voters will say World War II is over. Although it won’t be over until we sign an agreement with Japan to officially end World War II, which is still officially on. We want to end the war and by ending the war, end the U.S. occupation and reorient our trade to what’s best for Japan, not for the U.S.
So, this domestic political challenge in Korea and Japan may reflect the same kind of nationalistic voter reaction that we’re seeing in America’s satellites in Europe, from Germany to France to England. That’s the interesting thing. That’s the political dynamic at work.
NIMA ALKHORSHID: Richard, Looking at what has happened between the two presidents, how do the Europeans feel, in your opinion?
RICHARD WOLFF: Well, I think the Europeans continue to strike me as being the proverbial deer in the woods caught in the headlights of an oncoming car and frozen in a position that is extremely vulnerable and dangerous, but transfixed in some way that they cannot get out of it. I was struck by the results of the Dutch election. I’m no expert on Holland, but the right-wing anti-immigrant specialist was defeated in Holland over the last few days, and the kind of center-left opponent was coming in.
There will be a coalition government. The Dutch have this notion of freedom of political choice. They had 15 parties contesting, most of whom got one or more seats in the parliament. They run their democracy differently. They actually believe that there ought to be differences that negotiate with one another, and not just for the votes.
It’s proportional representation, so if you get a certain number of votes, then you get that number of seats in the parliament. And so the negotiation is continuous, and you have to work out your differences.
Unfortunately, here in the United States, we don’t allow anything like that. It’s a winner-take-all. So there’s no negotiation once the election is over. And we call that democracy only because we don’t know what the word means.
In any case, the Europeans are in terrible, terrible, terrible shape. There’s no other way to describe it. The statistics, if you look at it from a macro-perspective, are very bad. England is very bad, and Germany is very bad. France is not good. Italy is strange. Spain is too small. And then the rest of them are tiny.
Nothing is being resolved. Everything is being given away to the United States. Their overly expensive energy is being locked in for the next five or ten years if I understand what they’re doing. They continue to denounce Russia, which gives them nothing that I can see. And they continue to fight the war in Ukraine, which they are losing.
So when you add it all up, it is an awful, awful situation. They are sniping away at their social safety net. That is pissing off the people of those countries. Some of them are going to the right, some of them are going to the left. But either way, the middle that was so comfortable in Europe for so long is now resorting to pretend politics, not real politics.
They notice the growth of the left, they notice the growth of the right, and they don’t see any salvation. And there is none. There is no salvation unless they break one or another of the chains holding them down at this point.
And the right wing really doesn’t offer much. And if I were the right wing, I would have to come up with something new because beating the drum of immigrants doesn’t work. After a while, it looks as ugly as it usually is, and it doesn’t solve your problem.
That’s going to be a problem in the United States also. Exporting the poorest people in your country, the undocumented immigrants, is not going to solve the economic problems of the United States. Just isn’t. There are not enough of them. They don’t hold the position. And the secondary troubling effects of even doing that are going to outweigh any benefits you could get from it.
So, yes, it may be a clever political ploy. For a while, the people might believe that treating immigrants the way ICE treats them is a necessity, but it will not solve the problem. And after a while, that problem being unsolved is going to drive people in new and different directions. Next Tuesday, the people of New York City look as if they are about to show everybody what that new direction is.
MICHAEL HUDSON: Well Richard, I think we’re both in agreement that we hope that Japan and Korea will not be as subservient as Europe has shown itself to be. And if its parties call themselves, or if any party calls itself center-left, it means it’s not the left. Center means we are not the left. And that means we’re on the right. That’s my view, and that’s the political problem.
RICHARD WOLFF: Well, the guy who the one who came in first calls himself in Holland, Netherlands, a center-left. But in order to govern, he has said he’s going to make a coalition with the actual left. So that’s the question: what that might mean.
NIMA ALKHORSHID: Thank you so much, Richard and Michael. Great pleasure, as always.
RICHARD WOLFF: Okay. Thank you.
NIMA ALKHORSHID: See you next week. Bye-bye.
Transcription and Diarization: https://scripthub.dev
Editing: Harrison Betts
Review: ced
