The main battlefield of the Sino-US game has been determined, that is, the hegemony of the dollar, and electric vehicles and international trade are the two aspects of China's breaking the hegemony of the dollar. Because of this, Biden plans to impose 4 times more tariffs on Chinese electric vehicles, and the American media even clamored that the real king bombing measures are still to come, but the mainland's counterattack also hit the United States, and Tesla's chances of being used are getting bigger and bigger.
A kick to the nail?
According to reports, U.S. President Joe Biden will announce new tariffs on May 14 covering China's strategic industries such as electric vehicles, solar equipment and batteries.
Biden has threatened to increase China's import tariffs on electric vehicles from the current 25% to 100% to protect the "legitimate rights and interests" of American companies and workers.
Recently, U.S. Commerce Secretary Raimondo stressed that the Biden administration may take "extreme measures" to impose restrictions on Chinese electric vehicles that can be connected to the Internet to prevent threats to U.S. national security.
This move is expected to influence the 2024 presidential election. Recently, President Joe Biden's approval rating in some key states has lagged behind former President Trump, and the overall polling data has no obvious advantage.
In recent years, Biden has repeatedly made public noises that have heightened public concern, and he has used advertising campaigns to gain support from young people, but this advantage has gradually disappeared as the new round of Palestinian-Israeli conflict has intensified in the United States.
Therefore, in order to ensure the success of his re-election, Biden had to point the finger at China, and in fact, as early as February this year, Biden began to put pressure on Chinese electric vehicles.
Speaking of the Biden administration's desire to block China in these industries, mainly because they are closely related to our country's economic recovery, he hopes that such a strategy can bring down our economy
Judging from the current situation, Biden's bold approach is "basically useless" and cannot have a substantial impact on our economic growth, but rather seems to be overexerting force, which may only be self-defeating.
For China, the real danger is not necessarily the actions of the United States, but it is more likely that after the United States makes such a fuss, other countries, especially the bigwigs like the European Union, see that the United States dares to do this, and they will follow suit.
In fact, our Chinese-made electric vehicles have been suppressed in the United States, and the treatment is unfair, but they are selling hot in Europe and South America.
In order to suppress the German auto industry, France even came up with a way to push the EU to sanction our Chinese electric vehicle industry, trying to force us to fight back against the EU, so that Germany, which has the largest auto industry in the EU and has the best relationship with us, will suffer.
In other words, the tariffs imposed by the United States on us actually have no effect on us, and the real problem is that it sets a very bad precedent.
The battery, among the three green energy products, is the most vulnerable one, because now the United States' own companies are not very good in this area, and many of them rely on importing batteries from us, so our batteries occupy a large share of the American market.
If the U.S. does impose tariffs on us, it will definitely have a big impact on the relevant trade.
However, trade between China and the United States has been significantly reduced over the past five years, with only 15% of our exports in 2023 being sold directly to the United States, the lowest level we have since joining the World Trade Organization.
The U.S. accounted for only 7 percent, less than the 10 percent before the pandemic.
This means that even if the United States has been making small moves in terms of trade, constantly imposing tariffs and introducing new sanctions on us, the actual effect is getting worse and worse, and the marginal benefit is getting lower and lower.
For us, the development of electric vehicles has actually shaken the foundation of petrodollar hegemony, after all, we rely on imports for 73% of our oil, once the world realizes the electrification of cars.
China, as an oil-poor country, naturally gains the most, and we are the world's largest oil importer, but with the development of electric vehicles, more oil is imported from Russia.
And our oil transactions with Russia are basically settled in yuan, accounting for more than 92%, so we are less and less dependent on the dollar.
Coupled with the fact that the United States launched a trade war against China and restricted China's trade exports, and China's goods themselves are a huge sponge that absorbs excess dollars, the current approach of the United States is basically a divine assistance, and more and more countries are using the renminbi.
In fact, the financial war has developed to the present stage, and for the dollar, no matter how the situation goes in the future, it has already lost a mess.
The showdown in China is approaching
Why is it said that the dollar loses in a mess?
Because now or in half a year, no matter whether the United States cuts or raises interest rates, how much it cuts or increases, the dollar will not be able to return to its international status before 2022.
After that, the U.S. dollar will be transformed from a global currency to a regional currency, and will only flow in a few countries such as the three North American countries, Australia, Japan and South Korea.
Because Europe has the euro, the renminbi has a circle of renminbi, and the de-dollarization of the world's second-largest economy has not hit the dollar ordinarily.
The previous circulation of the US dollar was such a closed loop:
The dollars are paid to China first to buy our products; We use dollars to buy oil from Saudi Arabia, the United Arab Emirates, and Russia, and various mines in Australia and South America; Then Saudi Arabia and Australia exchanged dollars for U.S. bonds to obtain income, and each took what it needed, and the dollar was strong.
In this way, a closed loop of the dollar is completed, and global interests are closely integrated.
Now this closed loop has been completely interrupted, first of all, the United States has reduced the purchase of Chinese products, we can't get more dollars, and we directly trade with Saudi Arabia and Russia in yuan.
It is no exaggeration to say that the United States itself has ruined its own future.
After China's high-quality and low-cost daily necessities began to be slowly replaced by Southeast Asian countries, China began to export new three items to the West, namely electric vehicles, photovoltaics and lithium batteries.
But it is this link of Sino-US transactions that is blocked by the United States, especially new energy vehicles, because the rise and fall of automobile products can be said to be related to the fate of a country.
The United States has only one Tesla, and it is heavily dependent on China, with more than 60% of its components linked to Chinese companies.
Now Tesla is also in big trouble, and even Wall Street is shorting Tesla, if China does not support Tesla, then Tesla's future is not very good.
Many analysts believe that it was the United States that lured China into the new energy market and then withdrew on its own, but my view is better, on the contrary, the United States is the one who realizes it later.
The two presidents of the United States have operated for personal gain, and now that the hegemony of the dollar is gone, the foundation of the United States' financial establishment has been shaken, and no one has bought US bonds, and the United States itself is the biggest reason.
Europe does not buy US bonds, Russia, China, and Saudi Arabia do not buy them, and now Japan and the United Kingdom are left, the yen can't hold back, and the proportion of international payments for the pound is almost the same as China.
More importantly, the economies of these two countries are too small to satisfy the appetite of the United States, and the Ponzi scheme of the dollar and US bonds, and the continuation method of drinking water to quench thirst, are likely to fall into a state of semi-disintegration after this monetary cycle.
Breaking the hegemony of the dollar by electric cars?
The traditional view of winning the petrodollar hegemony is that we should rely on strong currencies such as the renminbi, but this view lacks a global perspective, and in fact, from the dollar gold to the dollar oil, the equivalent of the dollar endorsement is more important.
The development of electric vehicles has actually destroyed the irreplaceable position of oil in the international energy system, and has also shaken the foundation of the dollar, and the huge influence of strategy in major events has been fully reflected here.
Since the formation of the petrodollar hegemony, the United States has used the dollar tide and oil price manipulation to maximize its own interests.
The United States has adopted different measures for different targets, such as suppressing oil prices to hit Russia and lowering oil prices to contain China. Recently, the United States has imposed sanctions and suppression, and launched a dual-track system for oil prices.
Faced with the oppression of petrodollar hegemony, countries around the world have sought ways to resist.
For example, the euro system was created to fight for monetary autonomy; However, efforts to challenge the hegemony of the dollar appear to have failed to bear fruit.
The power of misplaced competition cannot be ignored, and many cases in recent decades have shown that it is not Lekai that beats Kodak, but digital imaging technology; It was not JD.com that defeated Taobao, but Douyin; It is not Nokia that beats BlackBerry with more and more buttons, but Apple without buttons.
In the future, it is likely that it will not be the traditional lithography machine that will beat the diode chip production machine, but quantum technology.
In the same way, China's layout in the field of new energy vehicles is like tearing a hole in the iron curtain of petrodollar hegemony.
Although new energy vehicles play an irreplaceable role in meeting the needs of driving experience, their cruising range still needs to be further improved.
However, with the decline in battery costs and the increase in pure electric range, new energy vehicles have been able to meet people's higher requirements for power.
Judging from some of the West's partial abandonment of electric vehicles, this may be just a strategy to put pressure on China's auto industry system, and the wheels of history are always moving forward, and there may be serious consequences if they go against the current.
China's new energy vehicle industry has made great achievements, mastering the core technology, getting rid of the shackles of Europe and the United States, the bottleneck of solid-state battery technology has been successfully broken, and the cruising range is expected to reach more than 1,000 kilometers, and the future of traditional fuel family cars is becoming more and more slim.
Even the always arrogant "Wall Street Journal" said that China's electric vehicles shocked the world twice, one is that the quality, function and price of China's electric vehicles directly shocked Western competitors, who are completely unable to compete with China under normal conditions.
The second is that China's auto exports will surpass Japan's in 2023 and become the world's largest auto exporter.
Japan, South Korea, Germany, and the United States are nervous because the economic contribution of automobiles in their countries is too high, with Japan 20%, South Korea 10%, Germany 10%, and the United States less about 3%, which just proves that the impact of new energy vehicles is not American fuel vehicles, but the hegemony of the dollar.
If the production capacity of fuel vehicles is all converted into new energy vehicles, then the global automobile industry will be almost "monopolized" by China, and the GDP of these countries will be reduced to China, so either you die or I live, and the United States will naturally not back down.
For Chinese electric vehicles, the United States is frightened, overcapacity is just the rhetoric of the United States, even if it is a fact, it is also to completely defeat European and American cars from the competitive advantage, dare to fight a price war, and must be cleaned up and obeyed by China.
Therefore, from the current point of view, the United States has become a loser, no matter how new energy vehicles develop in the future, whether the dollar raises interest rates, the marginal benefits of the impact on China are becoming more and more negligible, and we, experienced the darkest and trough, there is only one way to go in the future---- that is, uphill.
Information sources:
"Not ready to compete with China yet"! The chairman of the American car company personally admitted! Said that China's electric vehicle industry is very remarkable" National Business Daily
"China Automobile Association responds to the United States or imposes new tariffs on China's electric vehicles: typical trade protectionism" CCTV News on May 13
"German transport minister rejects EU tariffs on Chinese automakers: does not want to block the market" Global Times
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