The Taiwan Embargo: Cuban Missile Crisis 2.0

We said in our last article that Trump was going to poke China in the eye, and he clearly did: since we published that article yesterday, the Chinese have:

  • Hacked US Customs computers, shutting-down our immigration services and forcing Customs officers to process paperwork by hand

  • Released a threatening and humiliating announcement that the Chinese Rocket Forces almost launched a barrage of anti-ship at the USS Ronald Reagan during its patrol of the South China Sea in July of 2016

  • Encouraged the North Koreans to pursue an ICBM program with which to blackmail and threaten the Trump administration's Kissinger Plan to break-up the Russian-Chinese alliance and reduce China back to a regional and not global power

China vs Kissinger(Trump): Taiwan

Recall Trump's famous phone call with the Taiwanese President? This was part of his effort to push the Chinese away from Russia, provoking them to become more anti-American while giving Russia cover to repair her relationship with the West, well out of sync with China. Trump's call was the decision of Kissinger, not Trump.

In response to Kissinger's Taiwan provocation, there is talk in China now about imposing an embargo on Taiwan and collapsing the economy, forcing them to accept a pro-Chinese dictator.

The theory is that once Taiwan falls under a Chinese embargo, Hong Kong resistance to Beijing's authority will lose morale and collapse, allowing Beijing to finally consolidate Hong Kong without risking a costly massacre.

China Willing to Lose Millions, Americans Thousands

China plans to defeat the US Navy in a sea battle, not merely to stalemate. The Chinese understand American psychology and know that if they can kill a US carrier or otherwise shock the American public with catastrophic naval losses, the US will have to either escalate to a possible nuclear war or withdraw. A drawn-out Imperial conflict risking 50,000+ dead for some obscure Asians islands will prove politically intolerable for a country so divided as America is, today.

Taiwan the Goal, the Islands the Distraction

As Taiwan suffers under embargo, China forces the US to make the first move, giving the Chinese the initiative. Even worse, by establishing bases in the South China Sea and also forcing a fight at Taiwan, the Chinese force the US Navy to DIVIDE ITS FORCES: if the Americans do not strike the South China Sea, then those bases can launch attacks on US forces, but if they do attack the South China Sea, they may not relieve the embargo of Taiwan.

Chinese Bases versus American Ships

While China does have a Navy, the Chinese prefer to keep its battles with the US as close to its land-based missile bases, giving them a much less vulnerable platform with which to attack US ships. By forcing the US to relieve Taiwan or sail through the South China Sea, the Chinese can have their cheap and expendable land-based missile forces target and confront priceless American battlegroups, saving their Navy for pitch battles or attacks outside the range of the land-based forces.

Will China's Strategy Work?

War is chaos, and so it's hard to say if China can succeed in executing her plan. However, that China is willing to squeeze Taiwan through an embargo, considered an act of war, suggests that the Chinese leadership believes that they can defeat the US Navy in a regional conflict.

This plausible Chinese defence strategy will make discussions with Trump very dangerous and difficult as we transition from Obama's pro-China policy to Trump's China-skeptic policy, and we expect more Chinese provocations against the US, including hacking, North Korean nuclear threats, and other Chinese proxies menacing US interests.

Trump Means China When he Says Mexico

Kissinger prepared Trump to counter a Chinese response to any economic embargo of Taiwan by having Trump adopt a publicly protectionist economic policy: this gives Trump a mandate to impose, with minimal domestic political cost, an embargo against China in retaliation for any embargo China would impose against Taiwan.

Any big news about tariffs or protectionism from Trump will be coordinated in response to Chinese pressure on Taiwan's independence. In the end, Mexico will get a slap on the wrist compared to what China would suffer if she insists on punishing Taiwan.

However, embargoing China will result in serious economic disruptions to the US economy and would result in a short-term shock to American consumers, and so by coupling China with Mexico under Trump's protectionism, he gains the necessary political buffer to out-wait China during this period of siege.

Brinksmanship & Endgame

The goal of this engineered crisis is to force Russia, at the moment of truth, to betray China. Once that happens, the Chinese government will lose confidence in going it alone, and the US will regain her possession of exclusive global hegemony.

The risk is that the US risks a regional war with the Chinese rocket forces and navy, but it is more likely to end in a compromise with a face-saving exit for the Chinese with some token concessions from the US: specifically, the US will allow China to keep a few bases in the South China Sea but not maintain exclusivity on sea and air rights.