Transcript: Empires Colliding – Full Breakdown of the USA-China Power Struggle

You have a society where there’s 1.3 billion people. And as a result of that, you have to work incredibly hard in China. It’s not an easy society to become rich in because the competition is so fierce.

I often use this example, Jay, where you look at, for example, accounting. Let’s say that you go to a four year degree in China, you get an accounting degree. Well, because of the sheer size of that, every year when there’s a graduation, there’s hundreds of thousands if not millions of new accountants. The people that have graduated with a four year degree in accounting, very highly skilled. But the competition is so cutthroat because you have literally millions of new people every single year entering that job space. So in order for you to really rise to the top and become one of the best accountants in China, you’ve got to be able to hustle, you’ve got to have that drive, that ambition.

And so again, this is something that we’ve seen actually very interesting in China. I’ll give you another example. You know, why is China leading the world in EVs right now? Well, what happens is you have this, what we call this local economy in China, for example, we’ll have maybe 100 companies start out, we’ll have 100 EV companies. And the competition amongst Chinese cities is so intense. You’ve got Beijing inventing, Shanghai is inventing, Guangzhou is inventing. You’ve got 100 EV companies and out of those hundred, 90 of them will fail because they just can’t actually survive against the domestic competition.

But what happens is that you get the 10 EV companies that are left over, they’re battle tested, they’ve already risen to the top of one of the most competitive and largest markets in the world. Again, with 1.3 billion people, you don’t even need to export cars around the world. You have a huge domestic market that you can cater to.

But when you look at BYD, which is absolutely the top of the top as far as Chinese EVs, they’re making an incredible amount of vehicles every single year. They’re now distributing around the world. The reason why they’re able to go worldwide and have that success is because they’ve been battle tested domestically inside of China and it’s a huge competitive advantage.

So again, these are the insights that we don’t really hear in Western media as to why these Chinese companies are successful, why Chinese people are built different, why they’re much harder workers than we have in the United States. And so that’s again, a huge competitive advantage of China of actually relocating your manufacturing and going overseas.

The Empire Cycle and Work Ethic

JAY MARTIN: And how much of that hard work ethic do you think is a symptom of, again, the cycle within which your empire currently sits? Because if we all start from zero, we’re poor and we know we’re poor and we need to work hard in order to get wealthy. And if we work hard, we become wealthy. But since we were recently poor, we still think and act like we’re poor. And that’s a great spot to be. But as a country becomes more abundant, more wealthy, you start to act like you’re wealthy as well and spend accordingly. Right, this is when people become complacent and it’s usually the sunset years of an empire. Right. This is Ray Dalio’s framework.

CYRUS JANSSEN: Right, for sure it is, yeah.

JAY MARTIN: So, you know, I was chatting with Jeffrey Sachs yesterday on the show and he pointed out, he’s like, I was in China in 1991, this is a country of rice fields. That’s what it was. But in the collective memory, they remember greatness because 100 years, 150 years earlier, they were the celestial kingdom, the most advanced country in the world, nation in the world, most innovative, all of this stuff. And so there’s a collective memory of greatness, but a present day scenario of poverty. And that’s the motivation that a country needs to come out of this. And so those different stages of empire, how much of that you think contributes to that work ethic and that drive and therefore the competitive nature of the economy to innovate and grow in all of this?

The Entrepreneurial Revolution in China

CYRUS JANSSEN: You know, I think it contributes a lot. And I’ll go back with an interesting story here, because when I was living in China for 10 years, I had an opportunity to meet a tremendous amount of entrepreneurs. One of the consistent stories I saw was about people born in the 1970s who had a very interesting timeline. There was basically a golden opportunity if you were born in the late 60s to late 70s – this 10-year span.

When Deng Xiaoping started opening up China and really started reforming China, you have to remember before that time there was the Communist Party. You were either in one of two camps: a poor farmer that didn’t have much money or a member of the Communist Party. If you were a member of the Communist Party, you basically had a better quality of life. You got access to meat, food ration coupons for more food, a nice pension, and maybe some housing provided to you. Compared to the poor farmer, working for the Communist Party was great – you had stability.

What happened is Deng Xiaoping said, “We’re going to open this up a little bit. We’re going to allow entrepreneurship. We’re going to allow you to go out there and start your own business.” And an interesting thing started to materialize, Jay. The people in the Communist Party thought, “I’m already sitting pretty good. I’ve got my pension, more food coupons, a nice housing allowance. I could take a risk, but I could also just choose the status quo where there’s no risk and stability.”

But if you’re a poor farmer, what do you have to lose? I would meet entrepreneurs who would say, “I grew up in rural China, had no money, and I loved motorbikes. So I started working with my buddies on motorbikes. Then we started building engines. Then I said we should build a factory, and we started borrowing money.”

Long story short, 20 years later, he built an electronics company that manufactures household appliances. The company was called Povos (P-O-V-O-S). I met the CEO and had an amazing chat with him. Within 20 years, he built this up to where he’s making toasters, electric shavers, and all the stuff in your household. He ended up selling it to Philips, the big European company, for $500 million – a tremendous rags-to-riches story.

This is what happened in China – this entrepreneurial opportunity where poor farmers and poor people thought, “Let’s go start a factory. Let’s do something. We have a chance now.” China started opening up, you could start investing, traveling around the world, trading in the stock market – all these things we enjoy in Western countries. That’s how China revolutionized and became more prosperous. Obviously, real estate investment was very lucrative, especially if you were buying in China in the 90s. You would have made tens of millions of dollars just flipping properties and seeing tremendous capital appreciation.

That’s the backstory that many people don’t know in Western media – how China opened up and created amazing entrepreneurs who built incredible companies.

JAY MARTIN: Now, earlier in the conversation, you referenced the trade war, and what you said is this trade war didn’t need to happen. But it’s happening. So I’m curious about your take on that. Do you think it’s a misunderstanding within the White House and the current administration? Do you think there’s a deeper motivation that is just unclear at this point? How do you validate that?

The US-China Trade War and Its Global Impact

CYRUS JANSSEN: Well, what’s really interesting about this, Jay, is that in many ways, I don’t agree with Donald Trump’s policy right now. I don’t agree with the direction he’s taking the United States. I don’t agree with this trade war. But interestingly enough, this is exactly what he campaigned for. So in reality, this is democracy at work in the United States because Donald Trump basically said, “I’m going to start a trade war. I want everything made in America, and we are going to revert back to a period of time where we just depend on ourselves.”

This is really a very old-school way of thinking. This is the United States hundreds of years ago when trading across countries meant loading stuff on a boat, shipping it across the ocean, and hoping it gets there in a few months without being destroyed by a weather storm or pirates.

What’s really interesting is when we go back in American history, the Boston Tea Party was a protest against tariffs on tea. Americans forget that. We were upset that we had to pay these taxes on British tea. We said, “We’re going to take that tea and throw it in the harbor. We’re having a Boston Tea Party. We’re going to have a revolution against the British because of these ridiculous tariffs.” We didn’t want to pay tariffs back to the UK, and that’s why we got our independence and became a sovereign nation.

What’s really interesting here is that we’ve seen an amazing shift in the United States. The Republicans have absolutely dominated social media. I’m absolutely convinced that Donald Trump won the election based on social media. With Elon Musk and Twitter, the Republicans have a much stronger social media presence than the Democrats, and they were able to frame the narrative that China’s ripping us off.

For me, Jay, I live in the United States and do a lot of business between the US and China. I’ve always been an advocate for an improved US-China relationship because I know that this relationship is the most important geopolitical relationship on the entire planet, and it affects every other country in the world.

Even if you’re Portugal and don’t want anything to do with the US and China, you’re affected by it because you’re exporting and importing with both countries. When the US-China relationship is struggling, it affects many other countries around the world.

I think with Trump, getting back to your question, it was a false narrative. When he famously came out in the White House with that board showing all the tariffs, the way they calculated that was completely incorrect. Vietnam doesn’t have a 90% tariff. What he’s looking at is the difference in trade and putting that as a percentage, saying, “Look, Vietnam is charging us a 90% tariff.” No, they’re not. It’s just the difference in trade.

Of course, you’re going to have a trade difference between Vietnam and the United States because we cannot export so many goods to Vietnam. Why? Because they’re not as rich as the United States. They can’t be buying iPhones and Teslas at a massive scale. There’s going to be a trade deficit, but as the United States, we can certainly buy a lot of products from Vietnam.

What’s fascinating about this, Jay, is that if you talk to any economist – we are talking basic Economics 101 – it looks like Donald Trump and the White House don’t understand it. That tariff board is complete propaganda. But unfortunately, living in this world of social media where we just see clips and images, many uninformed people think, “Wow, Vietnam is ripping us off. We need to tariff them.”

Trump tried to spin it by saying, “Vietnam’s charging us 90%, but I’m going to be the good guy. We’re only going to hit them back with 45%. I’m just going to do half.” Again, they’re not hitting us with a 90% tariff. That’s completely fabricated. Real economists see this as a nightmare that makes no logical sense, but that’s unfortunately what the United States voted for.

In my opinion, the United States is reverting to a period where we think we don’t need anybody else in the world. This isn’t the 1600s anymore. We have benefited tremendously from globalization. I’m a bridge builder – I like to work with every country in the world. I’m not pro-China or pro-America. I’m pro every country in the world. I want every country to get better and be more prosperous.

J.D. Vance came out and said globalization has failed because the richer countries were supposed to get rich while the poorer countries stayed poor to manufacture the goods. That’s absolutely toxic in my playbook. So what, you wanted China to just stay poor forever? The problem is that China got smarter. Not only are they manufacturing, but now they’re innovating and moving the needle.

Look at the EV industry. China’s not just manufacturing EVs, they’re innovating EVs. They’re dominating the future and doing something that no other country in the world can do. That’s why you have a very jealous J.D. Vance and Trump administration saying, “We need to tariff them, sanction them, stop them.”

This was a consistent policy we saw with Biden as well, who said, “We don’t want to see a world where China’s number one, so we’re going to stop their growth.” We call that the Tonya Harding approach – let’s just try to hit that person in the knee and stop their growth.

You and I both know that doesn’t lead to innovation. The United States is an amazing country filled with incredible companies and entrepreneurs. We can invent anything. When we had a space race against Russia to get to the moon, we didn’t say, “How can we stop Russia?” We got to work with NASA and outworked them. We put a man on the moon – space race over.

You need someone to challenge you. Competition’s a good thing. Michael Jordan didn’t go on the basketball court hoping his opponent would get injured. He said, “I hope you’re at full strength because I want to beat you. You bring out the best of me. Let’s go battle.”

The USA-China Power Struggle

JAY MARTIN: Yeah, fully. So when you see these tariff numbers that were completely fictitious – you know, weird math. I think that’s sort of well known at this point. But it doesn’t matter. You just have to fool the masses that aren’t going to look beyond the headline, and that’s relatively easy to do.

So then what would the motivation be? I think of two scenarios I’ve heard most frequently. I’d love to know your thoughts on this, Cyrus. The first would be, the real intention here isn’t to inspire more American buying of American goods by tariffing other countries. Because the population that you unlock from a consumer base there is just the population of the United States, 340 million people. It’s not enough.

But if you could unlock a few billion from the global market by threatening them with reciprocal, very aggressive tariffs with the intention of them reducing any trade barriers with the United States to zero, so their consumers can now buy American made goods without any barriers, is that the bigger fish to land? What’s your take on that theory?

The Reality of Global Trade and Manufacturing

CYRUS JANSSEN: Yeah, I mean, all of this works in theory, right? It’s the same thing with the tariff war. In theory it’d be great – let’s cut off all production in China, let’s move them all back to America. We could have huge factories everywhere. There’s going to be millions of new jobs made. Everything’s going to be made in America. Like on paper it works great.

But what happens on paper and what happens in real life are two different things. It’s absolutely preposterous for the first scenario, because it’s taken China 50 years of development to get to the point of where they are today. And we think within a year, two years, 10 years, we can just snap our fingers and relocate all this? It doesn’t make sense.

You’re not going to find one economist or really anybody that understands global supply chains and manufacturing who agrees with that. This is impossible. This is just complete nonsense.

Now to the second part where you’re saying, okay, we’re going to open up the market so other countries can buy American goods. I think that this is, again, countries are already buying American goods and they’re already incredibly popular.

I’ll give you some examples. I was a longtime shareholder in Starbucks for many years. And Starbucks’ number one growth market that was driving that stock and company was China. China was opening up a tremendous amount of Starbucks for many years and it was an incredible cash cow. Starbucks was an investable stock because of that.

I would say the same thing would be true for Apple. I would say the same thing would be true for Nike, where they already are exporting a tremendous amount of products around the world.

America’s Soft Power and Changing Global Dynamics

And that’s kind of one of these interesting battles where we talk about the United States and China rising. And we don’t want to see a world where China is the number one. Well, the simple reality is United States has incredible soft power.

What I always say to Americans is, when you go to China – this is not the case anymore, by the way, it has changed – but for many years, when you went to China, people were wearing Nikes, they were using iPhones, they’re drinking Starbucks, they’re eating at McDonald’s. They loved all these American products, and that’s kind of everywhere.

Around the world, everybody kind of has an American dream. You go down to Australia, people love the United States. You go throughout Europe, people love American products. Nike’s been an incredible brand for so many years because it’s American. So it’s almost this soft power that we have with our products that have done super well already.

But now what you’re seeing is, in China specifically, you’re not seeing people wanting to buy American goods anymore. You’re seeing a very big pivot from that, a complete 180 degrees where it’s like, no, we’re going to buy made in China products now because not only has the quality been increased so much, now you’re targeting us and you’re really trying to bully us.

So why would I be buying a Starbucks coffee anymore, knowing that that goes back to an American company? By the way, coffee is booming throughout China. There’s dozens of amazing coffee brands in China. And that’s why I got out of Starbucks stock, because the story’s not there anymore.

When I was there from 2007 to 2013, Starbucks was king. People wanted to walk around with the Starbucks logo out because, like, “Hey, I’m drinking something that cost me five bucks, and I want you to know I’m drinking Starbucks.” Now you have a tremendous amount of local Chinese competitors, and Starbucks is not what it was anymore.

The Shift in Chinese Consumer Preferences

You look at Li Ning, who was the first big gymnast that won a gold medal for China. He’s created one of the most popular sporting brands. Li Ning is on the same level as Nike now. Very popular throughout China.

What’s interesting, Jay, is when I’m back in China now, I’m seeing stores with Chinese flags everywhere. People are really embracing that. This is a tremendous shift. In 2007, one of the most popular car brands in China was Buick. People loved Buick. People were buying Buicks because it meant American-made. They were going in with duffel bags of cash because most Chinese people love to buy things in cash.

They were buying American cars, and it was a thing of face, like, “I just bought an American Buick. I just bought a Buick minivan because I have a family.” This was a status symbol. No one is doing that now.

Within the next five years, all Western manufacturers will be out of China because China’s leading in that direction. As far as EVs and what China’s producing is better than anything the West is producing. So it’s like, why would I want to buy a Buick? That’s an inferior car. That’s how much has shifted.

America’s Declining Global Relationships

When you look at the greater scenario here, Jay, you’ve got to look at Europe and look at Canada and how they’re looking at the United States. The United States is alienating itself. It’s isolating itself on the international stage.

You’re in Canada, right? Canadians are not looking at the United States the same way. We have been brothers for 150 years. We share the largest land border in the entire world. And I was just in Toronto two weeks ago for business. I was in an airport duty-free, buying stuff with an American passport. And even the girls there were like, “Why do you guys have that trade war with us? I thought you guys liked us.” I’m like, “Hey, I apologize. I love Canada. Actually, I’m a naturalized Canadian citizen. I have dual citizenship. I just wish that we could work together.”

But look at the attitudes. And this is why I think where a lot of these Trump loyalists are really failing to see the big picture. Let’s take China out of the situation right now. European tourism to the United States has plummeted off a cliff, down 40% across every single country in Europe.

Greenland has now said that they’re going to move closer to China in an effort to spite Donald Trump because of his hostile takeover talk. The way that Donald Trump is acting is completely unprecedented and completely unprofessional.

Last time I checked, Greenland is part of Denmark, which is a NATO member, but yet we’re just going to go in, we’re going to annex Greenland, we’re going to take it? That goes against the whole NATO alliance. You can’t just go in and take a piece of a sovereign country.

And then you have this propaganda from the United States. You have a senator who goes on CNBC saying, “Well, I’m talking to the people in Greenland. They love America. They all want to be American. They love this plan.” Literally every single politician in Greenland voted against it. The vast majority, over 80% of Greenlanders said, “No, we don’t want to be part of America. We don’t want to have anything to do with that.”

But yet Americans are watching CNBC thinking, “Oh cool, we’re going to get Greenland.” You have a very uneducated population, and this is how someone like Donald Trump got elected. Because you’re going off of fear, you’re going off of emotions.

The Destruction of Trust

This is the big takeaway. This is the one thing I want your viewers and anybody listening to this podcast to understand. What Trump has done in the first hundred days here is he’s destroyed trust. That’s the one thing that you cannot change very quickly.

I’ll give you an analogy – think about marriage, where one of the partners steps out on that marriage and has an affair. How do you come back? The trust is a massive problem. It’s not going to be fixed with, “Oh, I forgive you. We’re back to normal. Everything’s great.” No, you’ve committed this thing that is very detrimental to our marriage, and it’s going to take years to work through that.

Can it be done? Yeah, but it’s going to be a lot of work. And right now, unfortunately for the United States, they have lost a lot of trust with our allies. The entire European Union has come out and said that they’re not happy with the United States. European officials have said this week the transatlantic partnership with the United States is dead.

I think what we’re probably going to look at is at least a stalemate for the next few years as long as Trump is in office, and then hopefully a reset with a new president in 2028. Already, Donald Trump is saying, though, we’re going to work on amending that Constitution so I can get that third term. It’s insane what’s coming out of his mouth. And honestly, it just makes the United States look very bad on the international stage.

JAY MARTIN: Yeah. And I think they’ll find legal grounds to run that third term. If I were to make an assumption or a prediction about the next election, they could look back through American history and say FDR won four elections. Like, term limits are anti-democratic. If you want to keep the same president for 12 years, shouldn’t the people be entitled to it? And if he’s a loser, then run somebody else and beat him. You know what I mean?

CYRUS JANSSEN: Yeah.

JAY MARTIN: But when we get to that moment of time, oh, my gosh, the response is going to be explosive. I’m not looking forward to that.

The Irony of Term Limits Criticism

CYRUS JANSSEN: No. Well, the other thing that’s funny with that is, the United States is very critical of China. Why? Because Xi Jinping has essentially gotten rid of term limits and has cemented himself in for life.

I’ve been very vocal on my channel that I’m for term limits. I think that term limits are a great thing. I don’t think it’s a great thing that China has gotten rid of term limits. That was something that they actually changed after Mao Zedong, who ruled for life. After he passed away, they said, “You know what, probably a good idea that we have some term limits.” Let’s go ahead and put that in there. They had two five-year term limits that would limit it to a ten-year reign. Obviously Xi Jinping did get rid of that.

So it’s kind of interesting to hear that perspective, where it’s like we’re critical of China, but yet actually we just want to emulate China. Deep down inside, Trump actually really loves Xi Jinping and he loves the fact that Xi Jinping got rid of term limits and that Xi Jinping is ruling for life. Deep down inside, you know darn well that Trump, if he could control it, he would immediately get rid of term limits and he would run for life as well. He absolutely would want to do that.

JAY MARTIN: Yeah, right. Well, no term limits in Canada. Pros and cons to that, right?

CYRUS JANSSEN: Yeah, there’s been a tough run with Trudeau, but glad he’s got.

The Art of the Deal vs. Reality

JAY MARTIN: Yeah, that’s the thing. Once you end up with the 10th year of any leader, you’re like, okay, enough’s enough in most scenarios. So then let me ask you, because it strikes me as odd that so MAGA supporters would say this tariff announcement and then the pause and then the new announcement and then the pause. That’s just the art of the deal. That’s what we’re doing here. We’re trying to throw the world off balance so that we can sneak in our real demands, which will be so moderate from where we started, but we’ll get everything we want.

CYRUS JANSSEN: Right.

JAY MARTIN: What I’m hearing you say is the destruction done as a consequence of this policy, whether implemented or not, is trust. And we’ve lost trust. It’s very hard to rebuild that. So I got to get back to my first question here. What is the motivation then? Do you think it’s incompetence? Is it that simple? Which very well could be. Or do you think it’s the fact that American politicians back to the election cycle only really need to think and should be thinking if they want to stay in power in two year increments because they just need to appease the public in a very short term time horizon and so giving them what Tough on America first. You know, all this stuff like people love hearing that, even if it doesn’t make any sense in long term, has no logic at all. But what’s your take Cyrus?

The Real Impact of Tariffs on American Businesses

CYRUS JANSSEN: Yeah, I mean, going back to the beginning, Trump has been very clear on what he wants to do. He wants factories to relocate back to America. One of his advisors went on CNBC and said, look, we’re going to be building iPhones in America. We are going to have new factory jobs for Americans. They’re going to be assembling iPhones. This is what he said. So in his mind, he still wants that first option of actually relocating factories to the United States.

Now, are you going to have some factories built here? Sure, there’s definitely going to be some. But it’s going to be so minimal compared to what the effects of this trade war is costing Americans right now. Look at a stock that I like to follow – Target. Target is now trading at a lower level than it was during the pandemic. Massive sell off. Why? Because so much of Target’s goods are coming from China.

As of today that we’re recording this, there’s a 245% tariff that is now levied against China. Let’s just imagine that you’re Target. It wouldn’t be inconceivable for Target to have containers coming from China with a million dollars worth of products. As that container enters a US Port, Target has one of two options. Do you decline the container and just lose a million dollars or do you pay $2.45 million in taxes to the US government? Now it costs you $3.45 million.

What you’re going to see really quickly is Target will decline it and just take a million dollar loss. Either they’re taking a million dollar loss or $3.45 million. If they take the goods, well, that Stanley cup that costs $39.99 will now be $89.99 because of these absolutely insane tariffs. And that’s what’s going to be passed on to the American consumer that people just don’t really understand. Tariffs are a tax.

The Manufacturing Reality

I think in Trump’s mind, he really wants to build more factories in America. But let’s be honest, Chinese people don’t want to work in factories anymore. Chinese entrepreneurs are offshoring their factories to Cambodia and Vietnam because the new generation of Chinese don’t want to work in factories. You honestly think Americans are going to want to work in a factory making iPhones? Americans want to wear Nikes. They don’t want to make them. It’s just totally illogical.

But what you’re going to see is Trump is “the art of the deal.” He wants to get a deal. And we have to remember Trump is a narcissist. He has a tremendous ego and he has to always be right. This is why in 2020, it was so embarrassing, because he undermined what a democracy is. Democracy is the ability to enter a political race and realize that there will be a winner and a loser. The point of a democracy is that you shake that person’s hand and say, that was a great race. I wish you the best.

But when Donald Trump denied the election results, then basically tried to stage a coup on January 6, then refused to show up and do that transition of power – this is a massive smack to the face of democracy. The United States is supposed to be the leader of the world. The entire world is watching Donald Trump and how his actions go. So the way that he handled that in 2020 was already a stain on United States democracy.

Inconsistent Policy Damages Trust

Look at the messages to Canadians. We’re doing a 25% tariff. Okay, I’m going to give you a 30-day pause. Okay, we’re back to 25% tariffs. Okay, we’re going to pause that again. Going off and on like this just screams, “I have no idea what I’m doing.” And again, it just burns that trust.

But at the end of the day, the Trump loyalists right now are saying, “We’re winning this tariff war. 130 countries are now wanting to talk to us.” Well, 130 countries are wanting to talk to you because you’ve whammied them with tariffs out of the blue! Vietnam and Cambodia are doing their thing, no problem at all. And all of a sudden, bam, 45% tariffs. Yeah, you’re darn right Cambodia is going to get on the phone call like, “Hey, buddy, we need to have a chat.” But Trump’s like, “See, Cambodia wants to talk to me. Told you. I’m the master negotiator. The Art of the Deal.”

I have a couple of photos here from an article on Bloomberg yesterday: “Trump presses China to make tariff offer to calm the trade war.” So now you have Donald Trump reaching out to China, saying, “Hey, guys, you need to talk to me. You need to make a deal, because we need to calm this down a little bit.” And then here’s a quote from The Art of the Deal: “The worst thing you can possibly do in a deal is seem desperate to make it.”

Look at the messaging that’s going to China. In my mind, Donald Trump is acting like the ex-girlfriend trying to text the old ex and saying, “Hey, you haven’t messaged me. You should message me.” China’s not going to message you when you’re acting like this.

The United States is not looking like it’s in a position of power. Donald Trump passed 145% tariffs against China last week. Two days later, we’re going to give an exemption on computers, on cell phones, on monitors, on solar panels. Why? Because I bet Tim Cook, the Apple CEO, called the White House and said, “Look, we can’t survive. Apple’s going to get decimated with 145% tariffs on every iPhone.”

So you already had to see Trump walk away from this big, bold move. Now it’s another escalation. There’s no consistency. The messaging from Donald Trump to the world is that we don’t really have a plan. We’re just going by the actions of one man who has no idea what he’s doing and unfortunately, he’s just destroying trust for the United States.

JAY MARTIN: I like how you framed that. “130 countries have come to talk” because that’s an event that occurred and an amazing headline was spun out of it that reads a certain way and convinces people of a certain thing. You can pump your chest and say, “130 countries have already come to negotiate. Clearly we’ve got their attention. What we’re doing is working.” Whereas if any of my suppliers or any of my clients sent me an email that said we’re actually going to have to charge you 35% more or we’re going to have to pay you 35% less, the next thing I do is call them and say, “What’s going on?”

CYRUS JANSSEN: Right.

JAY MARTIN: Let’s just talk about this. Right?

CYRUS JANSSEN: 100%.

JAY MARTIN: That’s the obvious next step. But framed under a certain headline, it appears from a position of massive strength when it’s… I really appreciate how you did that because I haven’t heard that take. It’s so obvious, but it’s not been talked about that I’ve seen.

So when you think through this, where is the center of power gravitating to right now? Because if you have 130 countries come to the table to negotiate, and I’m sure the narrative spinning out of these meetings will be we’re going to emphasize we need to be their bigger trading partner. They need to align with the west, not the east, whatever. But a lot of it’s illogical. If you look at the ASEAN countries, the 10 countries that make up Southeast Asia, collectively, 800 million people seems like a big prize. But to ask a country like Vietnam or any of the 10 ASEAN countries to side with the United States in a trade war between the United States and China just defies the laws of proximity.

CYRUS JANSSEN: Right.

JAY MARTIN: Like, you’re never going to actually make that choice. It’s the same as people who say, we should replace in Canada, we should replace the United States with China. It’s like, well, we should diversify. We’re never going to beat the economics of trading with the USA because of our border. Let’s just proximity.

CYRUS JANSSEN: Right.

JAY MARTIN: So talking about that a little bit, Cyrus.

China’s Global Influence Through the Belt and Road Initiative

CYRUS JANSSEN: Yeah, absolutely. Well, I mean, Trump came out yesterday and he said, “I want people, I want countries around the world to choose between. You have to choose USA or China.” That’s what it is. I sent out a tweet, I said, all right, so Trump wants the world to choose between US and China. Let’s see.

150 countries around the world have already joined China’s Belt and Road Initiative. China has signed new deals with Japan, Korea, Vietnam and Malaysia this past week as a result of this trade war. European officials announced this week that the transatlantic partnership with the USA is now dead. Greenland announces that it will seek a partnership with China despite Trump’s hostile takeover bid.

European tourism to the USA has fallen off a cliff, down over 40% across every country in Europe. And as we know better than anybody, Canadians are boycotting U.S. products. They’re canceling summer holidays. Even the cross border visits from Canada going into the United States is down 30% already this month alone.

So, you know, you’re looking at a situation here, Jay, where Trump is really pissing off every US Ally. And I challenge, I was talking to somebody that took the pro chair of tariff point and I said, I challenge you. Find me a country right now in the western society, our G7 allies. Find me a country that is supportive of Donald Trump signing. A country that thinks that this tariff war is a great thing.

Again, we’re alienating and isolating ourselves on the international stage in an unprecedented way that we’ve never seen before. I mean, you talk about Malaysia. I’ve actually announced yesterday on my YouTube channel, I’m actually going to Malaysia in September. I’m giving a keynote speech over there, big conference, super excited, because Kuala Lumpur is one of the most underrated cities in the world.

For many years, Malaysia always had a very favorable opinion about the United States. But remember, Malaysia is a Muslim country. And as soon as that war between Israel and Palestine broke off and you saw what the United States is really supporting, importing and doing in Gaza, that went from maybe 50% down to 20%. Now you have a tariff war and you have the same thing. You know, you need to choose.

Well, guess what? Xi Jinping is down in Malaysia this week alone and signing all of these new trade deals and is investing. Malaysia has been a tremendous beneficiary of this Belt and Road initiative. And I had somebody argue with me on Twitter. They said, big deal. So China built a road. If you’re a member of China’s Belt and Road initiative, that means China built your road. And I’m like, oh, see, you don’t even know what it means. Right. That’s actually just the name of it. Doesn’t mean that they’re just building roads.

China’s Investment in Malaysia

Actually, China has invested in one of the biggest industrial parks, spending over $2 billion building this whole science and technology park in Kuala Lumpur. We’re going to go there and make a video about that because it’s incredible what they’ve done. They’ve also built the whole high speed rail that is connected Kuala Lumpur with the entire east coast. This is like a $4 billion project that China has invested.

So again, you’re seeing these tangible assets. And I mean, very simple. Jay, let’s go to Kuala Lumpur and let’s go ask local Malaysians what they think of China. Better yet, why don’t we go on the Chinese built high speed rail and be like, “Hey, what do you think of China? Are they doing good things in your country?” “Yeah, I’m riding high speed rail now. Yeah. We have this new tech park that’s providing tens of thousands of jobs and it’s become an incubator for new startups and we’re seeking better partnerships and better trade.”

At the end of the day, this is what China does better than anybody else. 150 members on the Belt and Road Initiative, top trading partner for 140 countries around the world. So again, unfortunately, United States, we kind of live in this bubble where we look at the world as the U.S., Canada, European Union, Japan and Australia, New Zealand. That’s kind of what we look at the world. We forget about all these other countries and continents that are undeveloped.

China’s Growing Influence in Africa

One of the biggest bullish places that I’m bullish in for the future is Africa. The continent of Africa is home to a tremendous amount of growth. Some of the fastest growing economies, some of the fastest growing nations in the world. By 2100, Nigeria will be the third most populous country in the world. Average Nigerian woman, 5.2 kids on average. I mean, it’s absolutely going through a population explosion.

And you know, it’s often said that the future of Africa is China and that the future of China is Africa. And so you look at a tremendous amount of deals and just incredible investment from China over Africa over the last 20 years. China has a very favorable opinion in Africa. They’re genuinely very popular in Africa across the board because it’s the one country that’s actually doing investments in Africa. It’s actually providing them a roadmap on how to get out of this poverty cycle.

And, we all know that Africa is probably the most wealthy continent, just with its vast number of resources. But what is the United States and European colonies, like France, what have they wanted to do? They just wanted to colonize Africa and basically rip them off and strip them of their resources and not really give a damn about the local population. But China has actually come in and done a significant amount for that.

It’s incredible what China has done. And it’s in a position right now where the United States really can’t catch up because we’re spending so much money on all these wars. We’re spending money on a lot of unnecessary things. And let’s just be frank. That’s just not what the United States does. We don’t go around the world investing in projects. We go around the world and unfortunately spend a lot of money on war.

JAY MARTIN: I’m glad you brought up the Belt and Road Initiative and I want to maybe dig into that a little bit and I’ll want to give you the opportunity to speak to the opposition. So just generally speaking, two perspectives on the Belt and Road Initiative.

One would be that this is an economic lifeline to countries who aren’t really participating in the global economy in a meaningful way. China invests in key infrastructure that allows them to do so. Whether that’s maybe a road, but more likely a port, refinery, bridges, things like this.

The counterpoint would say yes, but if you look at the details of those deals, China is investing tons of cash, but the money’s not free. It comes with predatory terms. And if these receiving companies default on those terms, what ends up happening is that China, and this is probably going to end up happening, is that China will just own tons of key infrastructure in 150 countries around the world. It’s just colonization under a different name. And we’re looking at it with rose colored glasses if we think this is an economic lifeline.

So, those are the two perspectives I hear most frequently. What’s your take? I think I know, but what’s your answer to that?

China’s Belt and Road Initiative: Debunking the Debt Trap Narrative

CYRUS JANSSEN: Yeah, well, I absolutely love this question because there is so much data that actually supports the point that I’m about to make here. When we hear Western media talk about China’s Belt and Road Initiative, what we hear is “debt trap diplomacy.” The theory is that China is going in, giving these predatory loans – astronomical loans that there’s no chance these countries are going to be able to repay. Then China’s going to sweep right in, take all of these assets, and basically control the world.

Now, here’s the interesting thing, Jay. Let’s just go down to the basic facts. Since the Belt and Road Initiative launched in 2013, how many projects has China actually taken over after countries defaulted on their loans?

JAY MARTIN: No idea.

CYRUS JANSSEN: Zero. There’s not a single case in the last 12 years where anybody can find that a country has defaulted on their loan and China has come in and taken that over. We’ve actually seen the opposite. We’ve seen countries say, “Hey, look, we are in a position where we are not able to repay this,” and we’ve seen China forgive a lot of loans and completely write them off.

You have to imagine it from an investment perspective. We always talk about a diversified portfolio, right? We’re not going to put all of our money in Apple stock because it’s too risky. We teach a diversified portfolio – you’re going to have some speculative investments, some money in cash, spread it out over 10 to 15 stocks. China’s in a similar position. They’ve invested in over 1,200 Belt and Road Initiative projects around the world. Some of them are going to be great, some are going to be bad, some average.

But what’s interesting here is that again, there’s not been a single case where a country has defaulted on a loan and China has then seized that asset.

Now, many people point to Sri Lanka. There’s a port in Sri Lanka that did default. What happened is the Sri Lankan government reached out to China and said, “We can’t manage this port. You guys are pretty good at managing ports. Can you please come in and take over?” So China does control that port, but it wasn’t a predatory takeover. It was the Sri Lankan government who requested it. By the way, they reached out to other governments as well, including the United States, Canada, and European Union. Nobody wanted it.

I also want to address this question of “predatory loans.” If you actually look at the loans, they’re anywhere from 30 to 40 years at 2 to 3% interest. Honestly, tell me where I can get a 30 to 40 year loan at 2%. Sign me up! I would love to be able to access cash at that quality rate because I could make a ton of money with it.

It’s not like China is a credit card company saying, “Here’s a shiny new credit card. Just sign on the dotted line, don’t read the fine print – oh my gosh, your interest rate is 29.5%!” Go look at the loan terms – they’re very favorable. I would challenge you to find anywhere that you can get money at that rate.

When we look at the Belt and Road Initiative, there’s been a tremendous amount of success. There have been projects that have failed – obviously when you’re doing 1,200 projects in over 150 countries around the world, some are going to fail. But many have been a tremendous success. I’m in Malaysia, in Kuala Lumpur, and you can see the tangible benefits of what’s happening there.

China’s Business-First Approach to International Relations

China has positioned itself as a trade leader. Let’s be honest, Chinese people love doing business. That’s what China’s about. China doesn’t go around the world spreading their political ideology. I don’t see China going anywhere saying, “Hey, by the way, you need to be communist if you want to work with us.” They don’t care about that. What do they care about? Making money. It’s very simple: you give me A, I give you B. We make money.

When you spend time in China, it’s actually really interesting. One of the most common questions I get is, “Cyrus, you lived in China for 10 years. What’s it like having the government over you every single day?” The government’s really not involved that much in daily life. It’s very different than the political parties in America where we have an election every two years with constant barrage of advertising. The US and politics is very much in your face every day.

Whereas in China, it’s very simple. People go about their business, they’re doing trade, they’re hardworking and want to prosper and have a better society. Look at the cities they’re building in China – they’re some of the most livable, incredible cities you can find. My family and I go back for two months every summer to base in China and just enjoy that. We’re looking to move full time to Asia within the next couple of years as well.

JAY MARTIN: Really? Okay. You know, it’s interesting perspective that you hear your American friends say, “Cyrus, you lived in China for 10 years. What was it like to have the government breathing down your neck?” And you’re like, “What? That was not at all my lived experience.” But that’s the perception.

Twice in the last year I’ve been in the US visiting family and had somebody ask me, “What’s going on up there, you guys okay? I thought Canada was more like the US but I guess it’s more like China.” And I’m thinking, “What? Just unpack that for me. I don’t even know how to answer that.”

CYRUS JANSSEN: Right. Yeah, totally.

JAY MARTIN: You know, where do you begin? I might see you in Kuala Lumpur. We’ll be back in Indonesia in September. You’re speaking at the Nomad Capitalist show, which I’ve never been to, but heard very good things about.

Looking to the Future: Living Abroad and US Politics

CYRUS JANSSEN: Yeah, I’m really excited. I was a speaker there last year. We had a great time with over 800 people from around the world flying into KL. I think this year’s event is going to be even bigger because of this trade war. I think you’re going to see a lot of Americans wanting to leave.

I know you spend a lot of time in Indonesia as well, splitting between Indonesia and Canada. This is becoming more prevalent on people’s radar. People are realizing the cost of living in Western society is high, and for me, I love going abroad with my children because that’s the best education we can give them.

Our kids speak Chinese and are learning to live in both cultures. We always tell them, “You’re half Caucasian, you’re half Chinese. You are what the world is right now. The world is a mix and a blending of cultures, and it’s about learning to work together.”

I find it very sad because I’ve been working between the US and China for almost 20 years now. My mission has always been that if the United States and China can work together, the entire world can prosper. Unfortunately, we’re at a decline right now in the United States. We’re at a dark period with Donald Trump as our president.

I think the Republicans are going to lose the midterms next year because as the escalation continues, taxes increase, cost of living increases, there will be fewer jobs and higher inflation. Mortgage rates are already back up to seven and a half percent here in the United States. You’re going to find harder times for Americans, and I think a lot of Republicans who voted for Trump are starting to have regrets.

JAY MARTIN: Can I ask you, Cyrus, you mentioned you’ll probably find yourself back in Asia with your family over the next few years. We chose Indonesia, and people always ask about tax advantages. Honestly, that’s not why we chose Indonesia. We chose it for the culture and the lifestyle – it’s a beautiful country and easy to live there. Where will you look and how will you make that decision? Or maybe you already know this? If you’re looking at different locations, what’s driving the decision making?

Future Plans and International Living Options

CYRUS JANSSEN: Yeah. I do want to also say one thing, because a lot of people do give some pushback to me because I do live in the United States, and they’re like, “Why don’t you just go live in China?” I lived 15 years abroad. I’ve come back, really, to be with my parents as they’re getting older and having some health issues. I really want to spend their final years with them.

But what I think is really what we’re looking for in the future – there’s a few places on our radar. I think Hong Kong would definitely be a big opportunity for us. We did live in Hong Kong. Our daughter was born in Hong Kong. She’s a Hong Kong citizen. We’ve always enjoyed the city. The proximity to China is obviously great for the business that I do.

I think Kuala Lumpur is on our radar because it’s almost like Singapore, but just a little bit more affordable, with almost similar quality of life. I think KL would definitely be on our list.

And I wouldn’t even be opposed to going back to China. My wife’s family is from Guangzhou. We actually really love the city there. It’s a beautiful city. We actually really enjoy our time there. So I wouldn’t be opposed to going back to China. That’s not really a tax advantage – China has higher taxes than other countries there. But it’s more about the education that we can give our children, the quality of life, the experience. You only get to live one life. And if we have the opportunity to go to Asia, that would be amazing.

There’s a reason why the Nomad Capitalist event is actually in Kuala Lumpur. We have the event at the Majestic Hotel, absolutely phenomenal, five-star hotel right in downtown. It’s beautiful. And you can’t find something like that good of quality for that price point really anywhere in the world.

I think that’s where, if you were to look at something like KL, you could basically kind of live for like 30 cents on the dollar. Your apartment costs, your food costs, your medical – everything would just be almost like 70% off to what you could do in America. But then you live in a part of the world where, as you know, living in Asia, it’s a very different mindset there.

We know that Asia, the 21st century is Asia’s century. I’m very bullish on these ASEAN countries. These 10 countries – Singapore, Malaysia, Thailand, Vietnam – all of these countries are moving closer to China. I think they’re going to have a tremendous amount of trade and development over the next few decades. So yeah, that’s basically what I’m looking at and looking for the future.

JAY MARTIN: Yeah. Love it. Okay. Cyrus, look, it’s been great having you on the show. Thanks for making the time, man, and I’d love to do it again.

CYRUS JANSSEN: Sounds good, Jay, always a pleasure to connect with you and thank you for your time as well.

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