Submitted by Taps Coogan on the 11th of February 2019 to The Sounding Line.
In a wide ranging interview, Geopolitical Futures‘ founder and Chairman George Friedman recently weighed in on the ongoing Brexit and US-China trade negotiations. Mr. Friedman remarks that Brussels is being far too rigid in its negotiations with the UK and, in a contrarian fashion, China is a ‘declining economic power’ that must face new realities.
George Friedman on the EU:
“The European Union that we knew ten years ago is very different from the European Union that you have today in the way it behaves, in the relationship between nations. The basic problem is nationality and Britain is the perfect place to look. This is not a minor country. This is the second largest economy in Europe and at least half the people, those who voted from Brexit, disprove of the relationship… If you look through the rest of Europe, you find growing dissatisfaction with the EU… It cannot go on this way. There has to be a new consensus in Europe and the force that is rising is very skeptical of Europe. So with these changes taking place in the major components of Europe… the European Union, Brussels, will have to shift… Europe had the free trade zone. This worked extremely well. Why it chose to go to a very complex. intrusive system is one of the questions history will ask…”
“…The problem that the EU has, it doesn’t know how to compromise. It doesn’t know how to say ‘this is Britain, the second largest economy (in Europe), we must have it and the terms must change because of the reality of Britain.’ To me the most striking thing in the entire discussion was the rigidity of Brussels… Rather than desperately trying to find a solution, it made rigid rules that could not take into account the reality. When a political order is this rigid… they break… The most destructive element in Europe, in my point view, is Brussels and those who cannot see the need for change.”
“The crisis began well before there were tariffs. The crisis began in 2008. China was a massive exporting power and exporting powers are entirely dependent on their customers. It used to be thought ‘what a great country, China can export so much.’ And then they discovered, if my customers can’t buy then I am in trouble. So they built an industrial plant far too large for domestic consumption and assumed a permanent ability to export… While China was committed to free trade officially, it never practiced free trade. It would block American exports to China in various ways. By telling government companies not to buy American, or to manipulate the currency, or many different ways. So this (trade war) had to come and the Chinese problem is this: they export vast amounts. The United States exports only 12% of their GDP, half of that to Canada and Mexico. Less than 1% of the American GDP goes to China. So, we don’t need the Chinese. The Chinese need us and so therefore, this is less a war perhaps, than simply the imposition of a reality: the customer gets to set the price in certain situations… China now faces the deep weakness of its structure.”
There is much more to the interview so enjoy it above.
P.S. If you would like to be updated via email when we post a new article, please click here. It’s free and we won’t send any promotional materials.