I try not to listen too much to President Trump because he clearly changes his message depending on who he is talking to. Plainly his objective is always to win over who ever he is talking to rather than present a coherent message to everyone. I think a better way of working out his game plan is too look at what he does, and then try and piece together some logic from that to help guide future forecasts.
President Trump came to power promising to keep the US out of foreign entanglements - a policy very popular with his base, and was seen a driver of pushing Ukraine to do deal with Russia. But then this year, we have seen the US capture Venezuelan President Maduro, and claim the US will run Venezuela for the foreseeable future. Intellectually, this seems very inconsistent. But what we see in Venezuela is that Trump is not really concerned with restoring democracy, but in getting access to Venezuela oil. But why? The US in a energy exporter now, why should it worry about Venezuelan oil? And why is Trump doing this in his second term and not his first term?
My best guess is that the Trump plan is about stopping or slowing China, the only nation with the economic, military and technological muscle to compete with the US. I am sure Team Trump assumed export controls and tariffs would reverse Chinese exports. They have been proven wrong. Chinese exports have remained strong.
This is despite Chinese exports to the US falling but nearly a third. I suspect Team Trump assumed tariffs would give them leverage over the Chinese, but this has not proven to be the case.
On the contrary, China has proven it has leverage over the US with its rare earth exports. China has dominant market share in this product and has proven effective in controlling supply.
Trump seems to have leverage over Europe, Japan, Latin America and the rest of Asia, either through trade or defence policies, but China remains outside of his control. If anything the rare earth trade seems to give China the leverage it needs. So what can President Trump do? Well China is the largest crude oil importer.
Sanctions on oil exporters like Venezuela, Iran, and Russia have actually benefitted China as they have been able to negotiate discounts on pricing in buying oil from these sanctioned nations. So if sanctions don’t benefit the US, what can be done? Gaining (political) control over the oil output could give the US the leverage it needs with China (just as OPEC had leverage over the US in the 1970s). This would make the political logic of trying to deal with Russia, while arresting Maduro make sense. All about securing control over China’s access to oil. If the current protests in Iran can lead to regime change, and US political control of Iranian oil, then Trump will have succeeded in gaining leverage over China. Looking at 2024 data, if Venezuelan, Russian and Iran exports were subject to US influence, it it hard to see where China could make up the short fall.
If the US can offer a deal on Ukraine that gets Russia to limit oil supply to China, then the US will have leverage to offset China’s rare earth control. It also explains the idea of annexing Canada. Its a Big Bold Play. Lets see if it works.
