China Just Banned All U.S. Chips – Ben Norton on Danny Haiphong Show (Transcript)

I’ll leave it to you.

The Tech War: From Trump to Biden and Back Again

BEN NORTON: Well, yeah, Danny, you mentioned the correct term, which is tech war. So we talk a lot about the trade war. Donald Trump started the trade war with China during his first term as president. In many ways, Biden continued it, and now Trump has massively escalated it in his second term.

However, during the Biden administration, Biden actually expanded the tech war. In particular, Trump is emphasizing more of the trade war element. At a few points, Trump was threatening tariffs of over 100% on China, which is completely absurd. It’s like a trade embargo. Biden did expand some tariffs, but they were targeted tariffs on high-tech equipment.

Really what the Biden administration was doing is focusing on the tech war element. And in particular, Biden expanded measures that started under Trump targeting semiconductors. The Biden administration prevented U.S. chip companies from exporting the most advanced chips to China. Especially we’re talking about Nvidia here.

Nvidia has basically a global monopoly on the most advanced cutting-edge chips that are needed to train AI models. And even though this is an important qualifier, Nvidia doesn’t actually manufacture those chips—it designs them. Those chips are mostly manufactured by TSMC, the Taiwan Semiconductor Manufacturing Company, which is in Taiwan, which of course, according to international law, is part of China. But the U.S. has been supporting these separatist groups in Taiwan.

And Trump has been pressuring TSMC to basically become an American company, to move over to the U.S. Biden basically did the same. Trump is doing it more with sticks. Biden was offering more carrots. And under Biden, one of the landmark pieces of legislation passed was the CHIPS Act that offered many billions of dollars of government support to develop manufacturing of chips locally in the U.S.

The CHIPS Act and Manufacturing Challenges

So, for instance, the Biden administration was pressuring TSMC to open a factory in Arizona, and they did so, but it’s been very delayed. It’s been a long and complicated process. There was a lack of skilled workers in the U.S., so TSMC had to actually take over half of their workers in the Arizona plant. They came originally from Taiwan. They traveled to the U.S. with their families.

So this has all been referred to as the chip war that has been going on, started under Trump in his first term, it was massively escalated by Biden, and now Trump in his second term is continuing to wage this chip war. And the two big players here are Nvidia and TSMC.

However, China does not want to be completely dependent on the U.S. and on Taiwan Province, which again, according to international law, is part of China. But of course, we know that there is a political conflict between the separatist forces in Taiwan and the Chinese mainland.

So the mainland China has been focusing on developing its chip capacities in the mainland. And the main Chinese company is SMIC, Semiconductor Manufacturing International Corporation, and that is partially state-owned. And China has been—the mainland has been implementing measures recently that heavily incentivize local companies in the mainland to use mainland chips, not to rely on Nvidia.

Nvidia’s Monopoly and the AI Bubble

Nvidia now has become the most highly valued company on earth by market capitalization at over $5 trillion, which is crazy because it has this global monopoly and because, you know, we’ll talk about the AI bubble in the U.S. stock market. There’s the biggest bubble in human history right now, and it’s almost entirely being driven by AI—not 100%, but mostly by AI.

And most of the companies that have invested in AI have not made money on AI. They’re actually losing money on AI. So for instance, you look at companies like Facebook, Google, Apple—they are heavily investing in AI and these are very profitable companies. But the money that they’re investing in AI has not made any significant returns.

And certainly OpenAI, which is not a publicly listed company, it doesn’t have stocks available to the public on the stock exchange—OpenAI is just hemorrhaging money, which we can talk about. They’re actually now begging the U.S. government to bail them out.

But the point is that these companies that are investing in AI are all buying tons and tons of chips from Nvidia. So the analogy people often make is that there’s this AI gold rush happening. And in order to make money in the original gold rush in the mid-19th century in California, you didn’t actually go look for gold. You probably would have lost money if you did that. You sold the tools, the picks and the shovels used by the people looking for gold. The merchants made a fortune.

And Nvidia, in this analogy, Nvidia is selling the digital version of those picks and shovels, which is these high-end chips. And it basically has a monopoly on this.

China’s Push for Self-Sufficiency

China, for its own national security reasons and for its own economic reasons out of self-sufficiency, they do not want their own companies locally to be completely dependent on this U.S. ecosystem and on these U.S. big tech corporations that are monopolies.

So for instance, Beijing has banned Chinese tech companies from buying AI chips from Nvidia. And the reason actually is because Nvidia violates China’s anti-monopoly laws. Because unlike the U.S., which on paper has antitrust legislation, which is anti-monopoly legislation, it doesn’t actually implement that. And certainly under Trump, who’s just green-lighting all of these mergers and acquisitions to allow these corporations to buy out their competitors and become larger and larger oligopolies and monopolies.

China actually takes this very seriously—its anti-monopoly legislation. And that’s one of the reasons it restricted Nvidia. But another reason, again, it’s related to national security. Because the U.S. government has made it clear that all of this technology can be weaponized. That if the U.S. doesn’t like something that China does, the U.S. can impose export restrictions and prevent China from getting access to whatever the product is.

This is what Biden did with the most advanced chips. The goal of that was to try to prevent China from being able to catch up to the U.S. in the development of AI technology.

China’s AI Breakthrough and Open Source Models

Now, clearly that has not worked. We’ve seen that China has made huge progress in developing AI, and Chinese companies like DeepSeek have surprised the world. But it’s not just DeepSeek. Many other Chinese companies are also developing their own AI models which are very competitive with U.S. AI models.

And a huge difference is that these Chinese companies are mostly releasing their models open source. So the code is publicly available, the back end is publicly available. Anyone in the world can run these models on their own computer, on their own device. They don’t need to pay rent and fees to these U.S. corporate monopolies.

Like if you get Adobe, you have to pay Adobe whatever, $30 every month for the privilege of using their software. This is the business model that many of these U.S. AI corporations wanted. They wanted to force the rest of the world to pay them these rents, these subscription fees like Netflix in order to use their AI models.

Well, China has burst that bubble and prevented these companies from having monopolies by releasing its AI models open source. So, I mean, I could go into much more detail on some of these other aspects, but the short answer to your question is that China is prioritizing the domestic production and development of chips and its own AI industry. So it’s not dependent on this U.S. technology, which Washington has shown that it’s more than willing to weaponize.

Western Seizure of Chinese Assets

DANNY HAIPHONG: Yeah, yeah. And it seems like it’s causing a lot of panic. Even Donald Trump often talks about chips, chips, chips. It doesn’t go into much detail. I don’t think he knows much detail about this entire phenomenon. But nonetheless, there is a lot of talk about national security, about chips, and just blatantly saying that this is about keeping China from being able to compete with this larger market.

Ben, what did you make of this when this happened? Because Nexperia in the Netherlands—there was this takeover of a Chinese-owned chip company last September, which is part of this. And there was actually revelations that said that the United States had a hand in pressuring the Netherlands in doing this.

Now everything seems to be easing, just like with the U.S.-China trade war. Trump had to backpedal a lot. But what about this? What about China is really fueling this fear? And even these major moves—I mean, this is an extreme move. This is what they always accuse communists and socialists of doing, right? China’s taking over all the private capital, making it all state-owned. When you just had a U.S.-backed Western government try to seize Chinese assets. I mean, what did you make of all this?

The Netherlands’ Strategic Blunder with Nexperia

BEN NORTON: Yeah, first of all, this was an insanely stupid decision on the part of the Dutch government. And it shows how these European governments, they talk about strategic autonomy and especially now that the Trump administration is so openly attacking Europe. These countries in Europe pretend that they care about being independent and maintaining their own sovereignty. And then anytime Washington asks them to take a very aggressive measure against China, they obediently do it and say, “yes, master, we’ll do whatever you want, master.”

So what happened here is Nexperia is this, the parent company is Chinese. It is based in the Netherlands and they manufacture chips. Now the Netherlands also has become an important country in this larger chip war. And this has been referred to as a chip war. There’s a famous book called “Chip War.”

So in this larger chip war, geopolitically, the Netherlands plays an important role because one of the most important companies is in the Netherlands. It’s called ASML. ASML creates the photolithography machines, the fabs that are used in the factories of TSMC in Taiwan province of China in order to manufacture the most advanced chips that are designed by Nvidia. So this is part of this kind of triangular ecosystem here.

Legacy Chips vs. Cutting-Edge Technology

Right now, Nexperia was a less important company. It’s not like ASML, it’s not the most cutting edge chips. But the thing about this chip war is that the most cutting edge chips are useful for AI technology because you want the most cutting edge, high end chips in order to have an edge over your competitor, right? In order to make the most efficient LLMs.

But for the vast majority of products, you don’t need the most cutting edge chips, right? Like if you just want a normal phone, you don’t need like the latest phone with the most advanced chip. If you’re just like in a car or a refrigerator, you know, now everything is like we talk about the Internet of things. Everyone’s like a smart fridge or whatever. I mean, so they have chips in basically everything, right? But you don’t need the most advanced chips.

Most of these chips are what is known as legacy chips. And in fact, the Chinese mainland now is responsible for producing the majority of the legacy chips, which is in most products, including cars. So Nexperia was manufacturing some of these chips that were needed, ironically for the European car industry, in particular the German car industry.

The Dutch Government’s Political Intervention

So what happened here is that Nexperia was owned by a Chinese parent company. The Chinese parent company was put on the US Entity list by the Trump administration as an escalation of the trade war against China. The entity list is basically a form of sanctions. These are companies that the US is restricting trade with. These are Chinese companies.

So what happened is that because Nexperia was owned by this basically sanctioned Chinese company, the Dutch government forced Nexperia to be taken over by the Dutch government, but not nationalized. The profits were still private, but it was being run by the German government, and they forced the resignation, basically firing the CEO who was Chinese.

So basically, what the Dutch government did is try to kick out the Chinese leadership and turn it into a European company on behalf of the United States after the Trump administration basically put sanctions on the parent company of this company. So this was the Europeans going along with this US trade war against China and tech war against China.

This obviously infuriated the Chinese government. And, you know, some people are saying, “oh, well, like, you know, this is a nationalization. This is social.” No, it wasn’t a nationalization, actually. The profits were still private. This was an entirely political decision. It was not an economic decision. It was a political decision to target this company because of its links to China, period. It had nothing to do with national security, all that nonsense. It was because the US government was threatening to sanction the parent company.

Trump’s Concessions and the Reversal

Now, because Trump had this meeting with Xi Jinping, the Chinese president, and Trump was forced to make all these concessions, and basically, to go back to square one, Trump’s obviously losing this trade war that he started because China is the only country that has been able to actually fight back against the unilateral US trade war and defend itself by implementing reciprocal measures. Whenever Trump hits China with tariffs, they respond with equal tariffs, et cetera.

So Trump, when he met with President Xi in South Korea in October, he was forced to take a step back and remove the Chinese companies that were put on the entity list, which, again, is a form of sanctions, essentially. So now Nexperia’s parent company is no longer being sanctioned or threatened with sanctions.

Therefore, the US government is allegedly reportedly working with the Dutch government to try to resolve this issue and maybe to allow the Chinese leadership to be put back in charge of this company. But clearly, the Dutch government and Europe in general have burnt many bridges with China and have continued to show their true colors to China.

The Impact on German Manufacturing

Now, in terms of the larger chip war that’s going on here, this was also devastating to Germany because German cars, like Volkswagen, for instance, these companies were not able to produce cars because they needed the chips being produced by Nexperia, which was not producing the chips because China retaliated in protest of the political sabotage of this company by restricting exports.

So this actually ended up hurting the Netherlands and its relations with China and ended up hurting German car manufacturers. And at the end of the day, we’re back to square one. Now they’re going to allegedly allow these Chinese officials to go back to this company. So they didn’t gain anything from this.

The US pushed its European so-called allies into the line of fire in this trade war, hurting their reputations, hurting their economies, and nothing came out of it. Which is a perfect example of everything that Trump has been doing since he came into office with his trade war on China.

US Allies Bear the Brunt of Trump’s Trade War

Now, Trump has forced other parts of the world to give in to this aggressive trade war, including Europe. Ironically, the regions of the world that have suffered the most from Trump’s trade war are the US allies, right? Like Europe.

Trump imposed this unequal treaty on Europe in which Trump massively increased the tariffs levied on European exports of the US and yet European countries are not allowed to impose tariffs on US exports to Europe, which means that exports of European goods to the US will be uncompetitive in the domestic US market, but US exports to Europe will not be uncompetitive in the European market. And then Trump imposed similar agreements on Japan and South Korea.

China is really the only country that was really able to defend itself. And even India, you know, a country that the US has been trying to recruit for years as part of this new cold war in China to try to divide BRICS and divide the Global South. India is facing 50% tariffs from Trump, which is one of the highest rates, along with Brazil.

And it’s not a coincidence that Brazil and India are both part of BRICS, along with of course, China and Russia. Trump has been expanding tariffs on Russia, including he put sanctions on Russia’s main oil companies. So, you know, this is part of his economic war on BRICS. And at the end of the day, you know, China is the only country that was really able to defend itself against all of this.

China’s Growing Domestic Chip Capacity

DANNY HAIPHONG: Yeah, we can definitely tie in tariffs in a bit. And I wanted to follow up on the chip side of this. You know, one of the things that’s so interesting now with the way that China has, I guess you call it retaliate, but really responded to first the whole tariff war by Trump, and then of course, this Nexperia situation was through these export controls or out and out bans like we’re seeing.

Now with the announcement of using domestic chips for all these state funded data centers. How much of this though, Ben, has to do with the fact that also China’s domestic technological capacity now is to the point where it actually could use these chips. It could use its own domestic chip industry to fuel its own tech sector. And so it just makes sense as well to have heavier regulations so that domestic businesses and the national economy can benefit from them.

When in the past 5, 10, 15 years ago the market was mainly outside of China, now there’s a huge market inside of China.

The Chip War and China’s Technological Advancement

BEN NORTON: Yeah, well look, like I said, China is not at the most cutting edge of the chip industry, which is why the government is putting a lot of money and time and energy into advancing this sector to try to catch up to the U.S.

China is leading in most technologies, most critical technologies in the world today. This has been admitted by even hawkish Western think tanks like ASPI, the Australian Security Policy Institute, which is an anti-China think tank backed by the Australian military, funded by Western governments. They churn out anti-China propaganda, but they published a report recently in which they acknowledged that China is leading in 89% of critical technologies around the world and the U.S. is only leading in a few critical technologies. One of them is semiconductors.

So China is trying to catch up and it has made a lot of progress. People might remember that two years ago Huawei, the high-end technology company in China, which makes pretty much everything by the way. You know, people know of Huawei for its phones, which are very good phones and maybe its computers, but Huawei is making cars and everything. They also design chips.

So Huawei is a major competitor with Nvidia. And by the way, fun fact, it’s not talked about a lot. Huawei is a co-op. It’s probably the most successful co-op in the world. It is owned by its workers, which reflects kind of the socialist orientation of the Chinese government.

Anyway, so Huawei is a competitor with Nvidia designing these chips. And people might remember two years ago Huawei released the Mate 60 Pro, which was this very high-end, very good phone. And in that they announced they had the 7 nanometer chip, which surprised people because this chip was designed by Huawei but manufactured by SMIC, which is this partially state-owned Chinese company, the Semiconductor Manufacturing International Co., which is a competitor with the Taiwan-based TSMC, which the U.S. is basically trying to take over and make a U.S. company.

China’s Strategic Development in Semiconductors

So China, the mainland has been really putting resources into developing SMIC to move up the value chain to be able to produce the more cutting-edge chips. And what we’ve seen in terms of AI development is that these AI companies that are not using the most cutting-edge Nvidia chips, instead what they’re using is they’re using slightly less advanced Huawei chips, but clusters, they’re clustering them together, which is a little less efficient, but it also is a way of being able to catch up to the U.S. in AI while the Chinese government is prioritizing the upgrading of its own semiconductor industry.

So basically what China is dealing with right now is this question about balance. What is more important, catching up with chips or catching up with AI? And basically what they’re saying is we need to catch up with both, but we also need to make sure that we have, that we are completely sovereign technologically and are not dependent on the U.S.

So if you look for instance at the new five-year plan, because you know China has a socialist system, it’s a socialist market economy. So there are many private companies, there are also state-owned companies and there’s a lot of market competition. But the government still engages in planning in strategic sectors. And every five years the Communist Party releases a new five-year plan.

This new plan is for 2026 to 2030 and it prioritizes the number one goal is the development of high-end technology and what China refers to as the “new quality productive forces.” These are things like AI, biotech, quantum computing, new energy vehicles, electric vehicles, and of course chips, the chip industry.

China’s Track Record with Five-Year Plans

So this has become a major priority of the Chinese government. And if you know anything about China’s past history with planning, in the past few decades, when the Chinese government makes a plan, they almost always meet their goals. And they might not meet it exactly within the five-year period, but they pretty much always meet their goals.

A good example of this is in 2015 the Chinese government announced a very ambitious industrial policy campaign that was called “Made in China 2025.” And they targeted certain sectors, high-tech sectors, and said they wanted to become globally competitive in all of these sectors. And China has basically met their goals in all of those sectors.

One of the only other sectors where China is not yet internationally competitive is in civilian airliners, which that industry is dominated by two companies. It’s a duopoly. In the U.S. you have Boeing, which has destroyed its reputation after being taken over by finance bros from Wall Street and laying off the engineers who were previously in leadership and then cutting corners and laying off unionized workers and attacking unions and hiring unskilled low-paid workers to exploit them. So Boeing has destroyed its reputation. And then of course in Europe there’s Airbus.

Now China also has COMAC, which is a state-owned airliner company that is becoming more and more competitive internationally. So China is making huge progress in all these areas. And like I said, China is not at the same level as the U.S. yet in terms of its chip industry. But I expect within 10 years China will probably reach parity.

The U.S. Strategy and Its Limitations

So I mean, this is the thing with the U.S. strategy is that it’s all a game of time, right? The U.S. knows that it’s waging this trade war and tech war against China. The idea behind the strategy is that the U.S. thinks that it can stay perpetually five to ten years ahead of China. But in reality what’s happening is the U.S. is ahead, but instead of being 10 years ahead, now it’s only five years ahead and in one year, maybe only three years ahead. So it’s still ahead, but it’s ahead less and less because China is speeding up the rate at which it’s catching up to the U.S.

So the idea with the chip war was okay, yes, we know that by restricting the export of high-end chips to China, yes, we know that this will incentivize China to develop its own local manufacturing of chips to be more self-sufficient. But the idea was, well, we will reach Artificial General Intelligence, AGI, before China, so it won’t matter because the U.S. will establish its monopoly before China.

But obviously there’s a lot of hype around this whole AGI concept. Some very skilled, very knowledgeable people who have done a lot of research on AI are very skeptical and say AGI could just be a marketing term. Maybe if it does exist, it’s further in the future than people think. And also China has made huge progress in catching up, not only in chips, but also in AI and is releasing those models open source again.

Two Competing Philosophies: Monopoly vs. Open Source

So we see two different philosophies reflected here. One is this U.S. philosophy, which is all about winner takes all, establishing a monopoly. And this is the mentality of Silicon Valley and these far-right billionaire oligarchs like Peter Thiel, who say openly, they admit they don’t want competition, they want a monopoly, they say monopolies are good. Peter Thiel, who’s a proud capitalist, he says capitalism is about monopoly and we don’t want competition, we want monopoly.

And in China you have the exact opposite. You have insane competition internally and you have the government pushing these companies, some of which are state-owned, some of which are not. But pressuring them all to release their technology open source, to share their technology with the world, and to make sure that they have their own domestic sustainability and sovereignty so they’re not completely dependent on these U.S. monopolies.

DANNY HAIPHONG: Yeah, no, I mean, that is just, I think, a really great summary, Ben. You know, in the whole chip war, in an attempt to hamper the entirety of China’s tech industry, much of China’s tech sector now is already ahead of the United States. And it’s in this area where it feels like the United States is trying desperately to hold on, because, as you said, there’s this assumption if they do, then they might be able to, it might be able to have ripple effects on the rest of China. Doesn’t look too great in that respect, though.

Trump’s Tariff Policy and the $2,000 Dividend

Ben, I wanted to now get to the tariffs because they’re very heavily related to this tech war and they are going very poorly for Donald Trump at this moment. You might have heard, Ben, that Donald Trump has essentially been forced to say that he’s going to give a $2,000 dividend to every qualifying American in many respects, because his approval rating in the United States, as he’s, you know, messing around with the rest of the world trying to figure out how many tariffs to levy and what, how big they should be, it’s down to about 40% on most polls, and it’s the highest it’s been since he started.

And he’s had some choice words with the public about this. “People are fools. We’re now the richest and most respected country in the world. People are fools for rejecting tariffs. Record stock market price. 401(k)s are higher than ever. Trillions of dollars will soon begin paying down this enormous $37 trillion debt,” as well as national debt, “as well as a dividend of at least $2,000 per person.”

And Ben, I wanted to play what he said on Fox News about this, defending his policies as they begin to receive the ire not just of the rest of the world, but Americans. Here we go.

VIDEO CLIP BEGINS:

DONALD TRUMP: No country’s ever done anywhere, even investing in America. $20 trillion. No country has ever done anywhere even near that, like a fraction of that. Biden did less than a trillion in four years. I did 20 trillion. We’re going to do over 17 trillion in eight months. By the time we end, we could do over $20 trillion. There’s never, in China, no matter where you go, there’s never been anything like it. We are building up something that’s unbelievable.

And a big part of that are the tariffs, because they don’t want to have to pay the tariffs because it’s so unsustainable that they come and build the pharmaceuticals and the chips and all the things. They’re coming into the United States and they’re building them. It’s a miracle what’s happening. We are building the greatest country in the world.

VIDEO CLIP ENDS:

DANNY HAIPHONG: So Ben, dispel this because this $2,000 dividend that he had to throw out there seems like a very random, almost act of desperation. A lot of what he says there, no context or evidence provided, how all these companies are coming back and building here. In my estimation, tariffs are mainly a foreign policy weapon. And now it’s being justified as a savior for the United States and as Scott Bessent would say, its national security. Talk about your reaction to the state of the tariffs.

Trump’s False Claims About the Economy

Trump just constantly lies. It’s pathological. I mean, obviously, pretty much all U.S. politicians lie. Democrats lie too. But in the case of Trump, it is just shocking. He has no relation to reality. It really shows that this idea that the strategy is just to repeat a lie so much until people believe that it’s true. And everything that Trump said there in that tweet or that post on his website is completely false. It’s all false.

First of all, inflation is rising. According to U.S. government data, official data, it’s not falling. He said there’s no inflation. He didn’t even say inflation’s falling. He said there’s no inflation, which is objectively false. It’s crazy.

Second of all, he says that all this money is coming in from tariffs and it’s going to pay off the debt. The exact opposite is happening. Now, we can have a more complex discussion about the debt. I don’t think the U.S. government debt is the end of the world. It’s a nuanced discussion. But he’s massively increasing the U.S. government debt, which he says he’s not. It’s false because one, some revenue is coming in through the form of tariffs, which is a form of regressive taxation against working class Americans. They’re the ones paying for those tariffs.

Who Really Pays for Tariffs?

Trump has constantly repeated another lie, saying that other countries pay for tariffs. That is not true. It is a lie. U.S. importers pay the tariffs, and according to Goldman Sachs, the majority of the cost of those tariffs has come in the form of price increases, meaning that U.S. consumers, average working people, are paying for the majority of the cost of the tariffs, which means that that money that the government is raising from tariffs is coming from consumers, from working class Americans. They’re the ones paying the tariffs.

Trump claims that money is going to pay off the debt, which is not true. And then he also says that money is going to be given back to Americans in the form of $2,000 checks. That’s their money, that’s tariff, that’s taxes. Taxes on consumption that Americans pay to the government through tariffs. China did not pay those taxes. So Trump is claiming he’s going to give back some of that money in the form of these checks. But so is he going to give it back in the form of checks or is he going to give it to pay off the debt? And within his own tweet, he’s completely contradictory. You can’t do both of those.

Furthermore, Trump did not mention that his massive tax cuts on the rich and corporations have also massively increased the U.S. government deficit and therefore the U.S. government debt, more than the increase in revenue from tariffs. So even if Trump does not give those checks, which we’ll see, I mean, he’s lied about a lot of things, so I’m skeptical about whether or not he’ll give these checks out. But even if he, let’s say he does not give these checks and all of that tariff revenue goes to trying to pay off the debt, it doesn’t matter because the debt, the deficit and debt increase caused by Trump’s tax cuts on the rich, the “big beautiful bill” will be larger than the decrease in the debt caused by the tariff revenue. So Trump’s lying about everything there.

The Myth of U.S. Re-Industrialization

Another lie is this idea that the U.S. is re-industrializing. According to official U.S. government data, the U.S. is not re-industrializing. If you look at the ISM Manufacturing Index and if you look at manufacturing employment, both of them have been falling. So in terms of manufacturing employment this year, ironically, in January and February, according to U.S. government data, there was a slight increase in manufacturing employment in the U.S. and then ever since Trump imposed his tariffs in April, manufacturing employment has fallen significantly in the U.S., which is because a lot of companies do not want to invest in the U.S. despite Trump’s claims to the contrary, because there’s so much uncertainty around tariffs.

I’ve seen so many interviews with owners of companies who say, “I’m not going to invest in the U.S. because we don’t know what the tariff rate will be next week,” yet alone in one year. Making a factory, investing in all of this fixed capital formation, this is complicated stuff. It takes many years. If a company decides it’s going to make a factory, it could probably take just two to four years. Trump will not even be president when the factories open.

This is what has happened, by the way, with TSMC. We were talking about the chip war. The Biden administration was offering billions of dollars in support and subsidies and tax breaks to TSMC, this company in Taiwan, which is part of China, according to international law, but they’re trying to bring it to the U.S. So they started opening these, they started making these factories in Arizona in the desert. And it was significantly delayed. It took them several years. There was a shortage of workers. They had major issues with infrastructure.

So, I mean, Trump says all this manufacturing is going to come back. It’s objectively not happening. Trump claims that there could maybe be potentially $20 trillion, a number he just pulled out of his hat out of nowhere. And Fox News just has on the president to just make up numbers with no pushback, of course, because Fox News is basically state media. And this is, it’s completely fake. It’s a lie. All of the independent objective data shows the exact opposite.

The Reality: Falling Manufacturing and Rising Inflation

Exact opposite is happening. Inflation is rising. Manufacturing jobs are falling. Manufacturing output is falling. The investment is not happening. Maybe there are guarantees made by foreign countries as part of these unequal treaties that Trump imposed on Japan and South Korea and Europe. And they said maybe that they’ll invest in the U.S., but saying they’ll do that is not the actual same thing as investing.

Meanwhile, remember what happened with this South Korean company car company in the U.S. that was raided by ICE, this Hyundai plant. This is a huge issue in South Korea. It’s a matter of national dignity with these South Korean workers, these engineers who were humiliated by ICE. And then the Trump administration tried to get them to stay. And almost all, I think it was only one person, one South Korean worker who decided to stay. Everyone else wanted to leave after they were humiliated by ICE like that.

So Trump’s claims are completely false. The only thing he said, I’ll give him credit, one thing he said is true. Yes, the stock market is at all time highs. He didn’t mention that it’s because there’s the biggest bubble in the history of the U.S. stock market right now, which is largely driven by the AI bubble. This is bigger than the dot-com bubble which popped in 2000. It’s bigger than the bubble that popped in 1929 that fueled the Great Depression.

So Trump is right about that. But this is, you know, always the case with the U.S. government. Its policies benefit Wall Street at the expense of Main Street, which is exactly what Trump has been doing, benefiting Wall Street at the expense of Main Street.

DANNY HAIPHONG: Yeah, great points. And even when it comes to this, Ben, I mean, as you said, there’s this major AI bubble. There’s also even to this day what the tariff war has done. It’s still causing major investors to hesitate to do exactly what you said, to invest in the United States. And then I’ll just go to this quote from…

The “Trump Dump” Phenomenon

In terms of the “Trump dump” phenomenon, as major financiers are calling it, the head of AJ Bell said, “We’ve seen a pickup in global funds that exclude the U.S. Lots of private investors will just buy global funds every month and they will just go abroad to get exposure. And now we’re seeing people are discovering these funds where you actually buy a global fund, but it doesn’t include the U.S. So it means they’re getting very broad exposure to different countries and deliberately excluding, excluding the United States.”

So I mean, excluding the U.S. came three times in a very short quotation there. That seems to be the phenomenon. And when you said earlier about the manufacturing, I mean, any ordinary person in the United States can look out their window, can ask anyone who’s looking for jobs right now whether manufacturing is up. Most people are going to say, “What does that even mean?” None of the jobs are in manufacturing and jobs are down in the United States.

So not only the tariffs were supposed to be a foreign policy weapon and they failed terribly, especially vis-à-vis China. Now they’re also failing and blowing back really hard in the United States. And we’re getting close to midterm elections. Your thoughts?

The K-Shaped Economy and Asset Bubbles

BEN NORTON: Yeah. What has happened in the U.S. is not necessarily new, but it’s become so stark that there are two different economies. Some people call this the K-shaped economy. It’s become a popular term in the financial press. So it’s like a K, like if you look at a chart, it goes up for the rich people and down for everyone else.

And now in the U.S., 50% of all consumption is carried out by the richest 10% of the population. And spending by the richest 10% of the population makes up one-third of GDP, according to Moody’s Analytics. This was reported in the Wall Street Journal, one-third of GDP.

So much depends on continuing to inflate this bubble in the stock market. Now, 90% of stocks in the U.S. are owned by the richest 10% of the population. 90%. So if you look at the bottom 50% of the U.S. population, they only own a little over 1% of stocks. 1% owned by 50%, 90% owned by the richest 10%.

So it’s clear that this bubble benefits the rich and that the U.S. government’s policies are geared toward continuing to inflate these asset bubbles, including the stock bubble, including the real estate bubble, which is Trump’s crazy policy of a 50, his proposal of a 50-year mortgage, which you can talk about, which is an insane policy that would actually benefit banks and lenders at the expense of average American families who would have to spend more than twice as much in interest compared to a 30-year mortgage, and they would be in debt until they die. This is not a pro-working class policy, it’s a pro-Wall Street policy.

Foreign Investors De-Risking from U.S. Assets

So in terms of the de-risking idea, now, there are a few reasons for this. One, what we’ve seen this year, 2025, is the most volatility in the U.S. dollar in many decades, especially in the first several months, in particular, following the declaration of a global trade war in April. The dollar fell by 10% against other major currencies.

Now, if you’re holding most of your portfolio in U.S. dollar assets and you’re not in the U.S. and you don’t have liabilities in dollars, like if you’re a pension fund or whatever, if you are a foreign, even like some kind of foreign money market fund, or you’re a foreign asset manager, like in Europe, for instance, and your liabilities, let’s say you’re a European pension fund and you have to pay pensions out every month to these retirees in euros. And yet you invested in U.S. stocks and U.S. bonds, even if the U.S. stock and bond market have not fallen significantly, but the dollar falls 10% against the euro, in fact, it actually fell more against the euro because it fell at 10% against other major currencies. But against the euro, it actually fell even more. Let’s say it fell 15% against the euro.

That means that even if you are making money on your investments in U.S. stocks and U.S. bonds, you’re actually still probably losing money. Unless those returns are over 20%, which they’re not, especially bonds, you’re not getting, you’re maybe getting 4% per year. So this means that a lot of countries, investors in foreign countries are saying just out of the currency exposure risk, they’re de-risking out of U.S. dollar assets, not 100% and certainly not out of the stock market because they can also see this massive bubble in the stock market that they’ve invested in, although a lot of them now are getting a bit worried about that as well.

So the first risk is the currency exposure risk. The second risk is the stock market risk. I mentioned how the U.S. stock market is in the biggest bubble ever and you have these insane evaluations of these big tech companies. So these stock prices are very bubbly and a lot of foreign investors are saying this is too risky. There could be a very serious fall or even potentially collapse, some kind of big correction in the stock price. So they’re de-risking because it’s too expensive.

And then add in the third risk, which is the Trump effect, and the fact that Trump could wake up tomorrow and announce some new crazy policy that could again cause the dollar to fall a bunch that could collapse the stock market. Who even knows, like whatever Trump announces next. So there are a variety of reasons why these foreign investors are de-risking. And we’re talking about people who are only concerned about making money in Western countries.

Geopolitical Risk and the Erosion of Dollar Dominance

This isn’t even to mention the geopolitical risk. If you are in China or India now, which is facing 50% tariffs or yet alone Russia or BRICS countries that are afraid they could be the next country to be sanctioned by the U.S., their de-risking is even greater because their concern, especially looking at China, China has a massive trade surplus and they have so many excess dollars. Previously a lot of those dollars went into buying U.S. government debt, U.S. Treasury securities, which was helping to sustain the U.S. Treasury market, which allowed the U.S. government to borrow cheaply and continue to have larger and larger debts.

So China now, state investors and private investors are saying, wow, well we shouldn’t buy any U.S. assets because tomorrow the U.S. government could decide to seize all of our assets like they did to Russia. So there are just so many layers of risk that it’s just not worth putting all of your eggs in the U.S. basket.

Which, if you look at the U.S. empire, one of the most powerful weapons it has is the dollar system. The U.S. military is still pretty powerful, but we’ve seen that in Ukraine in the proxy war. The U.S. military industrial complex has not been able to defeat Russia in this proxy war, flooding Ukraine with weapons produced by almost entirely U.S. military contractors. These for-profit corporations in the military industrial complex, they have not been able to defeat Russia. So yeah, the U.S. military is powerful, but has its limits.

But the biggest strength the U.S. empire has is the dollar system and the fact that the U.S. in the global economy plays this role as the kind of global banker. So capitalists around the world, they used to store much of their wealth in the form of U.S. assets and U.S. stocks and U.S. bonds, U.S. real estate, which helped to also inflate the real estate bubble in the U.S. in places like New York City, foreign oligarchs just buying up empty apartments. But it’s a way of just turning whatever your local currency is, converting those into dollars and then buying a luxurious condo in New York City or Florida or whatever.

So increasingly a lot of those, even those people, these oligarchs and foreign capitalists, even they are reconsidering that because for a variety of reasons, U.S. investments are no longer as attractive as they have been in the past. This is a huge shift. And over time, I’m not saying this will happen overnight, but this will continue to erode the power of the U.S. empire, that it has its chokehold on the international financial system as the dollar weakens. It’s not going to disappear overnight. But what we’re seeing is a more multipolar financial order in which the dollar is no longer the only game in town and many international financial institutions are de-risking from the U.S. in general.

Scott Bessent’s National Security Rhetoric

DANNY HAIPHONG: Yes, de-risking comes back to haunt the United States. Ben, well, I’m going to play this from Scott Bessent because it’s this continuous theme too of national security, national security. Essentially, Trump’s administration has very blatantly combined the economic war, the policies of economic war on tariffs, export bans, etc., the tech war, all of it, with national security very openly. And here’s Scott Bessent articulating this.

VIDEO CLIP BEGINS:

SCOTT BESSENT: Come in at the beginning, then, as we rebalance, which is the goal of this, bring back high-paid manufacturing jobs to the U.S., then it will then morph into domestic tax revenues. Now, President Trump has consistently fought for the American worker and we are seeing trillions of investments in the U.S. that would not have occurred without the tariffs.

The other thing too is the authority that he uses is called IEEPA. It is an emergency authority. And he used that emergency authority. He got the Chinese to the table to negotiate on stopping the precursors for fentanyl drugs. If fentanyl, hundreds of thousands of Americans dying every year is not an emergency, what is.

On October 8, Chinese threatened to put export controls on rare earth materials. He was able to threaten 100% tariffs, and we were able to negotiate that away. And then finally, in terms of the general tariffs, we are doing these trade deals that would not be possible. We were at a tipping point in terms of the economy, in terms of our trade balance, and we are rebalancing successfully.

VIDEO CLIP ENDS:

DANNY HAIPHONG: So again, the threat, the threat, China, fentanyl, China, rebalance, rebalance. It’s all about the security of the United States. And none of that seemed to be true, though. Everything he said there seemed to be just another rehash of everything you’ve been debunking here.

Debunking Bessent’s Claims

BEN NORTON: It’s very funny hearing that because basically the thrust of what Bessent is arguing is that the U.S. made all of these gains by waging this trade war against China. What he doesn’t mention is that all of those so-called gains were basically bringing us back to square one before Trump started this new phase of the trade war in China.

So, for instance, okay, this is Bessent’s claim one: China is restricting the export of materials that could be used to make fentanyl. Okay, China was already agreeing to do that. China was obviously not encouraging the precursor chemicals used to make fentanyl. China was already playing ball with the U.S. on that. This is part of this myth that you hear from these insane hawks in the U.S. claiming that China wants the U.S. fentanyl crisis, opioid crisis, to get worse. Completely false.

So that’s not really a gain in any way. China is just, China is saying that it’s going to do something that it was already doing. Trump constantly does this where he moves the goalposts and he says he gained a victory because another country reaffirmed something that it was already doing. Trump has done this with Mexico many times. Trump threatens Mexico and then President Claudia Sheinbaum says, okay, we’re going to restrict fentanyl, which they’re already doing. And then Trump says victory, but they were already doing that. Okay, so that’s not really a victory.

Then Bessent says that China also had threatened rare earth, threatened the restrictions on the export of rare earth to the U.S., but why did China do that? Bessent doesn’t mention that. He acts as though China was just being aggressive and just woke up one day and President Xi decided to restrict the export of rare earths to the U.S. The reason China did that is because it was a retaliation against the unilateral trade war waged by the U.S. This was China’s way of defending itself against the U.S. trade war.

So Trump massively raised tariffs on China and then what did China do? They raised tariffs to the same amount. Then Trump announced several forms of export restrictions and added Chinese companies to the entity list, which is a form of sanctions. And China responded with the rare earth restrictions.

So then when Trump, the Trump administration agreed to go back to where it was at square one and to reduce those tariffs and to take those Chinese companies off of the entity list, like the parent company of ByteDance, what did China do? It announced it would no longer restrict the export of rare earths. So we are literally back to where everything was when we started, before Trump escalated this trade war in China. He did not win anything.

But Bessent is trying to portray what China did as concessions, not mentioning that China also reverted back to where things were beforehand. I mean, it’s just like for average people who don’t follow these issues closely, I can understand why this would be convincing because people hear that and they say, oh wow, well that makes sense. China made all those concessions. But that’s because Trump and Bessent don’t mention that those so-called concessions were actually you did something in response to the U.S. attacks. The U.S. ended its attacks. So you took back the action you did in self-defense.

The Reality of the U.S. Economy

One other thing that Bessent says there, he says the economy is booming and there’s going to be all these investments. It’s objectively not true. In fact, there’s this chart that’s been going around finance Twitter, which is very revealing. And it shows that in the U.S., 80% of Americans are living in parts of the economy that are in recession. 80%.

So I’ve been talking here a lot about the AI bubble and the stock market bubble. That is really the only thing keeping the U.S. economy afloat. Because the way GDP is measured, it’s aggregate, right? It’s GDP for the entire U.S. economy for all 50 states. But in many U.S. states, the local economy is in recession. In fact, the Financial Times reported that about one-third of U.S. states are in recession or close to recession.

So yes, the AI boom is leading to a boom in places like California, where Silicon Valley is, or Texas, where they’re building a lot of these data centers. But if you’re like in the Rust Belt, if you’re in Ohio, you’re probably living in recession.

So the Trump administration talks about how great the economy is supposedly doing. But once again, the rich are doing great. If you own stocks, you’re doing great. That’s why 50% of consumption in the U.S. of that spending comes from the richest 10% of the population. But the vast majority of working class Americans are not doing great.

Trump’s Wartime Posture and Venezuela Crisis

DANNY HAIPHONG: Yeah, no, definitely true. That is definitely true. I know you’re speaking now in China, but here in the United States, there is massive, absolutely massive anger and rage about the economic situation here. As we talk about now, Ben, Donald Trump has not been quiet on the global front at all, actually. And there are many wars underway or about to begin, or shall we say escalate, depending on our definition of war.

First, I want to play the overall framework of how Donald Trump and his administration is approaching the world, which we can hear directly from Pete Hegseth. And so let’s do that first. And then we can talk about Venezuela and all of the various wars that the Trump administration is currently miring itself in.

VIDEO CLIP BEGINS:

PETE HEGSETH: We are solving life and death problems for our war fighters. We’re not building for peacetime. We are pivoting the Pentagon and our industrial base to a wartime footing, building for victory, should our adversaries f* around and find out.

VIDEO CLIP ENDS:

DANNY HAIPHONG: Hegseth loves to say “f* around and find out” in that very, very cringy way, actually. But nonetheless, Ben, we have a situation. We have on the one hand, Donald Trump is saying that he has signed all these peace deals, peace is coming, peace is here, peace is everywhere, and that he should have won the Nobel Peace Prize.

And then we have Donald Trump escalating with Venezuela directly. There have been, no matter when people watch this program, it’s likely that there is going to be more and more boats in the Caribbean just struck, murdering ordinary fishermen, which government of Colombia and Trinidad and Tobago have both confirmed.

But here’s the U.S. Southern Command right now. Ben, we have massive buildup in relation to a potential war with Venezuela, especially the Gerald Ford carrier strike group, which everyone is talking about, which is now currently stationed to essentially do what Donald Trump has been threatening, which is land strikes on Venezuela. Now, he’s had to backpedal a bit on this, but nonetheless, we have an overall world situation, Ben, where Venezuela is on the cusp of a bigger war with the United States.

And we still have the United States very much bogged down in Ukraine, threatening Nigeria. There’s not a place in the world where the Trump administration isn’t seeking to pursue a kind of full spectrum dominance policy. Talk about where we are right now.

The Venezuela War: Already Underway

BEN NORTON: Yeah, it’s so funny. It’s so surreal hearing Trump constantly say that he’s the peacemaker, he deserves a Nobel Peace Prize, which by the way, is a complete fraud of a prize. I mean, many of the people who win the so-called Nobel Peace Prize are warmongers and war criminals like Barack Obama, who bombed multiple countries, like Henry Kissinger, one of the worst war criminals in history.

Or like the most recent winner, Maria Corina Machado, who is a far-right Venezuelan coup-plotting extremist who has openly said she wants to privatize Venezuela’s oil and other natural resources and sell them off to U.S. corporations. And she has openly called for the U.S. government to invade her country, to wage a war on her country. And she won the so-called Nobel Peace Prize. A complete farce.

But anyway, it’s so funny hearing Trump constantly say that, say “I support peace” while waging war. And then at the same time, his war secretary, formerly known as Defense Secretary, War Secretary Pete Hegseth, constantly says in every speech, “We are preparing for war. We are preparing for war.” It’s just so contradictory.

Now, in terms of Venezuela, this is very dangerous. And it’s clear they are preparing for—let me take that back. They are at war. They are waging a war in Venezuela. The question is not if they are going to wage a war, they already are. The question is, will they escalate that war even further?

Because they’ve already killed dozens of Venezuelans and they’ve killed innocent fishermen from Colombia and from Trinidad and Tobago, according to reports from both of those countries. So the U.S. is killing fishermen, innocent fishermen in both the Caribbean and in the eastern Pacific.

This was admitted by, and the U.S. government, by the way, acknowledges that it has no evidence that these people are so-called drug traffickers. This was admitted in several reports. There was a good report about this in Politico. There was a good report about this in the Intercept. And they interviewed people from the U.S. government, anonymous officials who acknowledge they don’t have evidence that the people they’re killing are so-called drug traffickers.

And especially, you know, in these videos that have been released by the U.S. government, you can sometimes see, sometimes they’re very grainy, low quality videos. But in some of the videos you can see, there were many people in these boats. If you are supposedly trafficking drugs in one of these boats, you don’t want to fill your boat with people. You want as few people as possible so you can maximize the cargo. So it is highly unlikely that these were people trafficking drugs.

Moreover, even Rand Paul, you know, a U.S. Senator, has pointed out, and he on the floor of the U.S. Senate has criticized this, these lies, this propaganda claiming that this is about drugs. And he says it’s not. He pointed out that these boats don’t have enough gasoline to even reach the U.S. So even if they were full of drugs, which is highly doubtable, highly dubious, they couldn’t even reach the U.S. with those drugs.

The New WMDs: Fabricated Drug Cartel Narrative

So this is all based on lies. This is the new WMDs, weapons of mass destruction. People might remember, if you’re old enough, that when the U.S. invaded Iraq in an illegal war of aggression in 2003, we were bombarded in the propaganda with these lies that Iraq had weapons of mass destruction, WMDs. And famously Colin Powell went to the UN Security Council and he held up a little vial and said how dangerous it was that Iraq had WMDs and they had to wage war.

Now what they’re saying is that Venezuela, the new WMDs, is that Venezuela is run by drug cartels. There’s no evidence of this whatsoever. The U.S. government invented this fake drug cartel which they call the “Cartel de los Soles.” The Suns Cartel does not exist. International experts on drug cartels have investigated and have found no evidence this exists.

The first time it was ever mentioned was by the U.S. government and the far-right Venezuelan opposition, which is funded by the U.S. government. People like Maria Corina Machado, who has been funded by the U.S. government for more than 20 years. They’re the ones who invented this idea of the so-called “Cartel de los Soles.”

And if you look at the so-called members of this fake cartel, what a coincidence. All of the so-called members are the leaders of the Venezuelan government because the U.S. government fabricated this to provide the justification to wage war in Venezuela.

And this actually started in Trump’s first term during the previous coup attempt in Venezuela when in 2019, the U.S. recognized this puppet, Juan Guaidó, as the fake interim president of Venezuela, despite the fact that he never participated in a presidential election. And then the Trump administration, the Justice Department, then under Bill Barr, longtime CIA operative very close to Jeffrey Epstein, he claimed that Maduro, the constitutional president of Venezuela, is supposedly a drug trafficker.

And that was part of this strategy that the U.S. government has been carrying out for a decade now of trying to delegitimize the internationally recognized sovereign constitutional government of Venezuela. To say that Venezuela’s government is not an actual government, but reality, it’s a narco-terrorist regime in scare quotes supposedly run by a drug cartel.

It’s not true. There’s no evidence for that. It’s a lie, like on the scale of WMD lies. But this is all part of the rationale leading up to a war to overthrow the Venezuelan government. And then the U.S. will say, “Well, we didn’t overthrow their government. We overthrew a narco-terror group run by, we overthrew a drug cartel.”

And now the U.S. will recognize the puppet regime led by Edmundo González, the U.S. puppet, and his vice president will almost certainly be Maria Corina Machado, the U.S. government-funded coup plotter who won the so-called Nobel Peace Prize, while she’s calling for the U.S. to invade her country and saying she wants to privatize all of the oil and natural resources. It’s very obvious that that’s the strategy.

Three Scenarios for Escalation

And the New York Times has admitted, citing sources in the Trump administration, that they’re making several plans, plans, several different scenarios for escalating these attacks, which again, the U.S. is already waging a war.

So there are three potential scenarios. One is the U.S. just actually carries out these strikes, bombs Venezuelan territory, which is a very real possibility, and tries to launch decapitation strikes to take out President Maduro, to kill the president, the internationally recognized sovereign leader of the country, like they did with Gaddafi in Libya in 2011. And we saw how disastrous that was. Still today, 14 years later, Libya is a failed state. There is no central unified government. It had been the most prosperous country in Africa with the highest standard of living in the entire African continent. It’s now a failed state with open-air slave markets. So that’s one potential scenario, which is a very real possibility.

Another is that the U.S. military carries out covert operations. They send special forces. Trump has already authorized publicly. He admitted he authorized the CIA to carry out attacks, including assassination operations using lethal force. So the CIA and/or special operations forces could go in and try to assassinate President Maduro and other Venezuelan officials. This is terrorism, state terrorism.

And then the other scenario outlined by the New York Times is just continuing what’s happening now, which is they might not go directly into attacks on Venezuelan soil, but basically create more and more of a naval blockade. Because Trump already imposed an economic blockade on Venezuela back in 2019. The sanctions go back to Obama in 2015. And then Obama started the economic war in Venezuela. So this is bipartisan.

Trump came in in 2017 in his first term, he massively expanded the sanctions. In 2019, he launched the new coup attempt with Juan Guaidó. And then he imposed an economic embargo, a Cuba-style blockade against Venezuela. And now what he’s doing is a full-on naval blockade to try to physically cut off the country.

And the strategy, according to the New York Times, is to suffocate the country, suffocate the economy and force Maduro to flee. That’s what they think. Now, Maduro is not going to flee. There have been so many coup attempts, there’s been so much violence, so many U.S. attacks. There have been U.S. assassination attempts against Maduro.

Famously there were drone strikes against Maduro that failed, that came close to killing him. And John Bolton, Trump’s former National Security Adviser, the neoconservative war hawk who was one of the architects of the Iraq war, Bolton admitted that those drone strikes against Maduro were planned from Florida.

So the U.S. has tried to kill Maduro many times. In 2020, the U.S. backed a failed invasion of Venezuela called Operation Gideon in which these mercenaries trained in Northern Colombia by U.S. special operations forces, they tried to invade Venezuela and what people jokingly called “Bay of Piglets,” that failed. But it shows that, you know, there’s, this has been escalating more and more, and yet Maduro never resigned, he never fled like the U.S. thought he would. He’s not going to.

So that’s why I’m concerned that I think there’s a very real possibility that we could see direct U.S. military strikes inside Venezuelan territory. I think this is a very serious threat.

Every Administration’s Regime Change Operation

DANNY HAIPHONG: And every administration has, whether they succeed or not, a regime change operation that is supposed to both be, of course, about achieving the U.S.’s so-called full spectrum dominance, all of the objectives that go with that. But also politically, it’s also to look strong, to reinforce the toughness of the administration against so-called “dictators.”

We’ve seen it. Every single administration, there’s at least one attempt, if not more. Obama, you got to hand it to them, he had many, many, many attempts. Libya successful. Syria not successful at the time. We’ve seen what happened there.

BEN NORTON: Honduras in 2009, Obama-backed coup. Paraguay in 2012, Obama-backed coup. Libya 2011, war in Libya. The war in Syria started under Obama. The war in Yemen started under Obama in 2015. I mean so many, so many examples, right.

DANNY HAIPHONG: And we saw Trump struggle a little bit in his first term.

BEN NORTON: Ukraine in 2014, which set off this war that we’re still seeing today. Right, disastrous coup.

The Global Ramifications of U.S. Targeting of Venezuela

DANNY HAIPHONG: Exactly. Yeah, exactly, exactly. And then of course Biden facilitated and sparked the Ukraine conflict as it is now, which was all about bringing Russia to its knees. Even Biden himself admitted with whatever mind he had at the time that it was about removing Putin from power, failed dramatically.

But you even have been with the Venezuela situation. I want you to talk about the broader significance of the Venezuela situation because you know, anything the U.S. does, there’s major ramifications for not just the country that it is targeting, but also its overall objectives worldwide.

Here you have the Houston Chronicle, which is actually the third highest read and distributed newspaper in the United States behind the New York Times and Washington Post, I believe for Sunday papers. The editorial board came out with this statement saying that there should be no war in Venezuela. MAGA should tell Trump that it should be actually America first.

But what I found so striking about this then is the comparison to George W. Bush and as you said, the weapons of mass destruction, which we know the objective there was for there to be a major global shift for the United States to dominate, not just West Asia, but to use that as a springboard for its overall full spectrum permanent dominance. The end of history to keep that going.

Talk about the global ramifications of this targeting of Venezuela. It is an all weather partnership with China. Maduro has been talking about the partnership with Russia being ironclad, both in terms of defense, but also in terms of a strategic partnership. And of course Latin America is very strategic in and of itself for the U.S. in its attempt to get rid of any so-called adversary, or should we say peer, competitor or multipolar emerging power. So talk about the global ramifications here.

Venezuela’s Role in Building a Multipolar World

BEN NORTON: Yeah, great question. So I’ll start by saying broadly that whenever there’s a war like this, there’s never just one reason, right? So it’s not like the war, the illegal U.S. invasion of Iraq was just about oil. Now certainly oil was a factor, right. In many of these wars, there are multiple factors.

In the case of the Iraq war, the U.S. wanted to privatize Iraq’s state-owned oil and give access to foreign corporations. Iraq had an independent foreign policy. It was seen as a threat by the Gulf regimes like Saudi Arabia and certainly Kuwait. And of course Iraq was seen as a threat by Israel and refused to normalize relations with Israel.

There are so many other factors that we could throw in there. One is for instance that Iraq was selling its oil in euro and trying to get off of the U.S. dollar very early. We were talking about de-dollarization. This was a very early attempt. So there are many factors that played into the U.S. invasion of Iraq. Iraq had been a longtime ally of Russia and the former Soviet Union. And after the fall of the Soviet Union, the U.S. was going around the world with these regime change operations trying to overthrow all of the former Soviet allies and then Russian allies to create U.S. protectorates in this global empire.

Okay, now let’s talk about Venezuela. So obviously like in the case of Iraq, a significant factor is the U.S. would like to privatize Venezuela’s state-owned oil industry and sell off the oil to U.S. corporations. And Venezuela has a lot of natural gas and gold and other minerals and fresh water, which will become more important with climate change getting worse and worse.

So yes, the U.S. wants to privatize all those natural resources. And the U.S. funded leader of the far right opposition, Maria Corina Machado, has pledged to privatize all of that and to sell it off to U.S. corporations. She proudly said in an interview with Donald Trump Jr. she plans to do that. And then she also told U.S. investors, U.S. corporations you will make a lot of money. So that’s obviously a factor. A lot of people focus on that and it’s understandable.

But there are other factors as well, right? It’s not just because of that. Another very significant factor in why the U.S. has been pursuing regime change in Venezuela for so long is the fact that Venezuela under the Bolivarian Revolution initiated by Hugo Chavez in 1999, when he was democratically elected as president, is that Venezuela has played a key role in trying to build a multipolar world with an anti-imperialist foreign policy.

And Venezuela has been very close to China and Russia and Iran and Cuba and all of the boogeyman that the U.S. Empire hates and sees as major threats to its global domination.

China’s Growing Influence in Latin America

In fact, if you go back and you look at the modern history of Latin America from the 20th century till today, most countries did not really have close relations with China. China’s foreign relations were more focused on Asia and Africa. And Latin America in the first Cold War was really a victim of U.S. imperial sphere of influence strategy.

And the U.S. pressured these countries in the region, most of which were right wing military dictatorships backed by the U.S., to cut off any ties with the former Soviet Union and with the People’s Republic of China. So throughout the first Cold War, the U.S. had very significant geopolitical control over Latin America.

And again, the U.S. had this Operation Condor or Plan Condor where the U.S. installed a bunch of puppet dictatorships like the Pinochet regime in Chile, like the Videla regime in Argentina, like the Banzer regime. You can go down the list. The Brazilian junta. You know, most of South America was governed by these U.S. backed right wing military dictatorships.

And what we’ve seen in the last 20 years is that China’s relations with Latin America have grown closer and closer. China is now the number one trading partner of South America in terms of if you exclude local trade. So like if you look at Argentina’s trade, their number one trading partner is actually Brazil because it’s their neighbor. But if you look at extra-regional trade, international trade, China is by far the number one trading partner of South America and growing over time, whereas the U.S. share of trade with South America is decreasing over time.

And if you look at Central America, that’s slowly increasing its trade with China. And really Mexico is the only country in the region that still is completely economically embedded with the U.S. and that’s because of NAFTA, which has been renamed, but the Free Trade agreement between the U.S. and Canada and Mexico. That means that over 80% of Mexico’s exports go to the U.S., which makes it very difficult for Mexico to diversify. But even Mexico is trying to diversify its relationship and boost its ties with China and Russia.

Hugo Chavez: A Visionary Leader

So I’m explaining here that in the past 20 years there’s been this shift in South America, and Venezuela was at the heart of that shift. Hugo Chavez, who came into power in 1999, when he was campaigning for president the year before, he gave a speech in which he talked about multipolarity. Now today, in 2025, we talk a lot about multipolarity. Hugo Chavez was talking about multipolarity in 1998. That’s how prescient he was. That’s how much of a visionary he was.

He saw that the future of Latin America needed to be in integration with Asia and Africa and south-south cooperation, not with continuing this dependency on the U.S., which throughout Venezuelan history, Venezuela was basically a petro-state. And before the revolution, you had these puppet leaders in Venezuela who basically treated their country as a U.S. gas station. They produced oil for U.S. corporations that made a lot, they pocketed a lot of the profits. They exported that oil to the U.S. and then the elites in Venezuela, they pocketed the rest of that money. The average Venezuelan people, average working class people, did not benefit largely from that oil revenue.

Chavez completely shifted that and he said, yes, we need to use this oil to benefit our people, to fund housing programs and education and healthcare and social spending. But also a key part of the ideology of the Bolivarian Revolution was always one integration of Latin America as a bloc. Because yes, the U.S. Empire can easily try to conquer and oppress an individual country. But if Latin America unifies as a continent, we’re talking about a very powerful bloc.

So Venezuela played a key role in creating new institutions like the CELAC, the Community of Latin American and Caribbean States, which was created as an alternative to the U.S. controlled Organization of American States, the OAS, which is based in Washington and run by Washington. Venezuela also played a key role in the creation of the ALBA, the Bolivarian Alliance, which was an economic block to try to unify Latin America and to de-dollarize their trade. They were trying to do that over 15 years ago, trying to de-dollarize trade in Latin America.

Now of course de-dollarization is a very hot topic, especially in the BRICS countries. Well again, Chavez was a visionary. He was 10 years earlier than BRICS in trying to do all this stuff. And then finally, the other key element of the Bolivarian revolution was not only Latin American integration, but south-south integration and unifying Venezuela and Latin America as a whole with China and Russia and Iran and other major countries in the global south, even India.

So this is everything the U.S. Empire fears in one country. So yes, of course Venezuela does have very large oil reserves and other natural resources. But Venezuela is seen as a major threat to the global dominance of the U.S. Empire and the attempt by the U.S. Empire to divide and conquer, to divide and conquer Latin America, to divide and conquer the entire global south and divide and conquer the entire world to maintain full spectrum dominance. I mean this is the stated goal of the U.S. empire.

Trump’s Strategic Pivot and the “Lower Hanging Fruit” Theory

DANNY HAIPHONG: Yeah. And Ben, how much of also Trump’s pivot to Venezuela? You know, I’ve been hearing arguments about lower hanging fruit considering Venezuela to be more achievable as U.S. foreign policy, U.S. regime change kind of directive than let’s say what’s happening. We’ve seen Trump lament what’s happening in Ukraine. Can’t resolve that mainly because the U.S. keeps coming to the negotiation table with Russia and demanding what the U.S. wants and Russia says no. And things keep going as they’re going, which is very poorly for the U.S. backed Ukrainian government.

But also China. Not just the trade war, but also the Trump administration has been despite not pulling back U.S. assets necessarily military assets and naval assets from the Asia Pacific, very quiet on the military front, even having Pete Hegseth re-establish military to military conversations at least while going all over Asia talking about the threat of China.

But I want to play you this. You know there’s a strategy now, Ben, as you are aware of the United States really relying on proxies to get its dirty work done. And here is a potential new front now with a new Japanese prime minister who you might have seen jumping up and down on the U.S. aircraft carrier during Trump’s visit. Here is a Taiwan media source reporting on Japan’s role possibly in a war over Taiwan.

VIDEO CLIP BEGINS:

UNIDENTIFIED SPEAKER: Japan could deploy its self defense forces if China invades Taiwan. That’s according to Japanese Prime Minister Takaichi Sanae. She was responding to an opposition lawmaker’s question about how a Taiwan conflict could pose a survival threatening situation for Japan. Takaichi said the government would be responsible for evacuating Japanese nationals from Taiwan, suggesting the Self Defense Forces would play a key role. The term “survival threatening situation” comes from a 2015 law that allows Japan to mobilize its military even if it is not directly attacked.

VIDEO CLIP ENDS:

DANNY HAIPHONG: So let’s talk about this, Ben, in the context of this overall situation where we see the Trump administration obviously looking to, quote, unquote, “pick its wars or battles,” as we should say, with Venezuela vis-à-vis all of the troubles and struggles it’s having with the bigger powers like China and Russia.

The New Cold War Strategy

BEN NORTON: Yeah, I mean, this is the new Cold War. This is Cold War two. The US has made the assessment that it cannot win a war with China, a hot war, conventional war. So they need to resort to a cold war, which will include, unfortunately, I think we’re going to see many proxy wars. We’ll see destabilization campaigns, more propaganda, economic war, all of that, just everything below conventional military war.

So a big part of this is the US will use proxies like Japan, which is militarily occupied by the US, or like the Philippines. You know, the Philippines has offensive US missile systems that are in the northern part of the Philippines that could hit most of the major cities in mainland China. And the US has been pushing to militarize the first island chain to prepare for a potential war over Taiwan.

All this talk about Japan getting involved, it’s completely absurd. I mean, there’s no way it’s going to happen unless the US wants to cause World War 3, which, I mean, maybe they are as crazy as, maybe they are crazier than I think. But I think that’s just rhetoric. Japan is not going to get involved in this.

Now, we talked about this many times, Danny. Fortunately, the Chinese mainland also doesn’t want a war over Taiwan. They will defend their sovereignty. They will prevent US-sponsored separatism. According to international law, Taiwan is part of China. There is only one China. Virtually all countries on earth recognize that. The United Nations recognizes that. International organizations controlled by the US, like the IMF, recognize that. Go to the IMF website. It says, “Taiwan Province of China,” period. It is part of China.

China will defend its sovereignty. It will not allow the US government to back separatism. But China does not want a war with itself. That’s what it would be. So fortunately, I’m not really that concerned over the situation in Taiwan right now. This is all just, again, it’s part of the propaganda war against China. It’s always trying to make China look bad, trying to portray China as aggressive.

US Aggression While Accusing China

While the US is preparing to bomb Venezuela directly, as the US is waging war in Venezuela, as Israel continues to carry out the genocide in Gaza, as the US threatens Iran, as the US continues to back the proxy war in Ukraine, they’re desperate to portray China as the aggressive one. So they’ll play the Taiwan card.

Now, in terms of the new rhetoric of the Trump administration, I think this is simply a recognition of the reality that, again, they cannot win a conventional war with China. They’ve done so many military exercises and war games, and they’ve always come to the same conclusion in the war games, that in the best case scenario, both sides lose. But in pretty much all scenarios, China wins. The US cannot defeat China, at least in a Pacific war. China is in the Pacific, the US is in the Atlantic. On the other side of the world, they claim to be a Pacific power, but come on, give me a break. It’s a joke because of Hawaii.

Historical Parallels to Cold War One

So in terms of the Trump administration’s new strategy, it’s the same as the original Cold War. You have to find other terrains of imperial battle that the US empire wants to turn into proxy conflicts. And just as in the first Cold War, the US started this proxy war in Afghanistan to try to weaken the Soviet Union. The US backed many proxy conflicts like Vietnam and Korea.

It’s not a coincidence that the war on Korea came one year after the victory, not even a full year, months after the victory of the revolution in China. And of course, Korea is right on China’s border. The US wanted to turn Korea into this outpost to use to export counter-revolution, to try to destabilize the People’s Republic of China, which is why China was forced to intervene to defend Korea’s sovereignty against the US at war.

And then the Vietnam War is very similar. The US was using the Vietnam War as a proxy war against both the Soviet Union and the People’s Republic of China.

Latin America as the New Battleground

So today we see that the US is preparing for this. It’s not already preparing. It’s waging this new Cold War, Cold War II, and Ukraine was one of the, maybe the first proxy war of this new Cold War against Russia, but also against China and against BRICS.

But Latin America is becoming this major terrain of battle, this imperial battle. And Venezuela is a good example. I’ve already talked about how Venezuela is a close partner of China and Russia and also Iran. Venezuela has an independent government that has been a key part of pushing for a multipolar world based on south-south cooperation. The US has been obsessed with trying to remove that independent government and install a puppet regime that will serve US geopolitical interests and then, of course, privatize all of the natural resources on behalf of US corporations.

So, unfortunately, I think that in the upcoming decades, the US strategy is going to be to attack more and more of Latin America. The Trump administration is invoking the colonial Monroe Doctrine. This is a 202-year-old colonial doctrine that essentially claims that Latin America is part of the US empire, so-called sphere of influence, which it’s not. Latin America is an independent sovereign region. All the governments in the region have reaffirmed that, except maybe the puppet Javier Milei in Argentina or maybe the one in Ecuador.

But I mean, the vast majority of these sovereign governments in the region have opposed these US attacks. But basically, this is this whole idea of Fortress America, right? The Trump administration wants to turn all of the Western hemisphere into a US imperial sphere of influence and then use that in order to then prepare for future conflict with China. So instead of waging direct conflict, direct war, it is creating these imperial spheres of influence.

The Pivot to New Theaters of War

DANNY HAIPHONG: Yeah, very good points. And, you know, a lot of people have been talking about Trump washing his hands of Ukraine even as it continues to go on, certainly in terms of approach, maybe in terms of public face, but of course, it just keeps going on and on and on with whatever the US can do.

But there is, as you said, Ben, there really is this shift in focus toward, and I believe it’ll keep happening. I just put up a poll actually asking, you know, will there be another hot war? I believe there will be. And it will be with a, quote unquote, smaller country, one like Venezuela, which the Republican Party especially has a huge bone to pick given how politically significant it is.

And it isn’t as if, Ben, we had, what was it, June 2025, not a few months ago, where the US backed Israel. And Trump said this, he said this to the media very recently. He said, “Oh, we had a big hand in Israel’s strikes on Iran,” which almost led to a full-fledged war, or at least a prolonged full-fledged war between Israel, the US against Iran.

But it seems like what we’re experiencing now is a kind of, for lack of a better word, pivot, an attempt to pivot to more greener pastures of warmongering and war making to achieve what? I mean, victory is a very broad word. And oftentimes one entity or system’s victory can often also be its crutch, or as Karl Marx would say, part of digging its own grave. What’s your assessment of the overall situation that we are facing globally under the US empire’s kind of death throes?

The “Don Roe Doctrine”

BEN NORTON: Cold War II. We really should look back at the first Cold War, Cold War one, and look, I mean, the US recognized that a conventional military war with the Soviet Union would be catastrophic, especially because both sides had lots of nuclear weapons, like China does today. So the US had to engage in a series of proxy wars to try to weaken and destabilize the Soviet Union. Eventually they succeeded in 1991, and they’re now assuming they can do the same thing to China, that instead of waging a direct war in China, which obviously is not plausible, they will wage economic war. They’ve been doing that. So trade war, a tech war. They’ve been doing that propaganda war. They’ve been doing that for a long time. And now a series of proxy wars.

So I expect, you know, I mentioned that the Trump administration strategy is to bring back the colonial 200-year-old Monroe Doctrine. And now the Wall Street Journal cited sources in the Trump administration who, these are people who work for Trump and they support him. They proudly refer to it as the “Don Roe Doctrine.” The Don Roe Doctrine.

So the strategy is to wage these proxy wars to try to maintain a kind of neo-colonial control grip over Latin America. And I think the Pacific will also be a site of a lot of conflict. I mentioned the Philippines. I’m very concerned about the situation there with the US militarization of the Philippines. The US is trying to push the Philippines into a war, just like the US pushed Ukraine into a war. So I’m concerned about that.

Southeast Asia and the Pacific Theater

And we should look at other parts of the Pacific region. Southeast Asia, I mentioned the Philippines, but Indonesia, Malaysia, Cambodia, Laos, even Vietnam. Although I think Vietnam actually will be much, Vietnam will be able to defend its sovereignty. It did so in the original Vietnam War. I’m very bullish on Vietnam. I’m very optimistic about the direction that Vietnam is going. And I think it’s, you know, people say, what is the new China? Well, China is still the new China, but Vietnam is also, I mean, China and Vietnam know very clearly what direction they’re going in.

But a lot of these Southeast Asian countries do not have very clear political leadership. There’s political instability, especially in a country like the Philippines, where you had an independent leader who leaned pro-China and now you have a complete US puppet leader, Ferdinand Marcos Jr., Bongbong Marcos, who obediently does whatever Washington wants. Those kinds of situations where you have puppet leaders who refuse to defend their own sovereignty and are willing to push the region into a conflict, it’s very dangerous.

So really I expect going forward, like you said, you know, the Trump administration is deprioritizing Europe. They’ll still beat up on Europe, they’ll still demand rent extractions from Europe and all of this we talked about next period and all of this. But they’re not prioritizing military investment in Europe’s security and preparing for military conflict. They’re basically telling Europe you need to fund your own security.

And instead the US military is prioritizing the Western hemisphere from the southern tip of Argentina to the northern tip of Canada, going into Greenland. They’re trying to turn all of that into a neo-colonial sphere of influence and the Pacific. So I expect unfortunately those are the regions to look for for future wars and conflicts: Latin America and the Pacific, the Asian Pacific region.

The Empire Stretched Thin

DANNY HAIPHONG: Yeah, yeah. And the US will continue to be bogged down still in Ukraine. And this is what’s so interesting too about it. And we can close here with a question from the audience. What’s interesting about this, Ben, is no matter how much the US empire attempts to shift and will no doubt shift toward exactly where you said, it’s still bogged down in Ukraine and it is still, West Asia is still too volatile, especially when you have the Israeli settler colony absolutely, using your term, bullish on expanding, on destroying not just Palestinians and the hope for a Palestinian state, but attempting to achieve this Greater Israel, which will need fierce US backing and will require more and more wars which we see every single day still: Lebanon, threats to Iran, etc.

So the US empire is very stretched out, very stretched out. It’s going to be interesting to see where things go. Any final comments on this before I pull up a question from the audience?

The Bottleneck of Resources, Not Money

BEN NORTON:

Yeah, I agree with you. I’m very concerned about the situation in West Asia, especially the lack of resistance from almost all of the governments in the region to Israel’s genocide against the Palestinian people and to its constant U.S.-backed wars.

That said, I hate to sound really pessimistic, but I don’t really see many ways out of the situation. I mean, there will always be resistance. They will always fight. Not just Iran, not just in Iran, but in Iraq, the resistance forces, Yemen, Lebanon, Palestine—they will always keep fighting. But the situation is very grim indeed.

And from the perspective of the U.S. empire, as cynical and genocidal and criminal as it is, from the way they see it, they’re actually not investing that much. I mean, yeah, they give Israel these weapons, but actually that money is going to private corporations in the U.S. military industrial complex. So from the perspective of Washington, they’re subsidizing their own arms industry and pretty much the only manufacturing the U.S. does anymore, which is weapons.

And those weapons are then given to Israel. But that money doesn’t go to Europe. That money goes to U.S. investors in these corporations. And they say, okay, yeah, well, Israeli soldiers are fighting these genocidal wars, but there are no U.S. soldiers really on the ground. There were reports of a few, but we’re talking about maybe a few dozen.

I mean, from the perspective of the U.S. empire, politically, yeah, there’s a lot of backlash because everyone around the world can see the U.S. is sponsoring this genocide, and Israel could not carry out any of these wars and this genocide without U.S. support. But again, from the very cynical, criminal perspective of the U.S. empire, I mean, it’s not a big investment, right?

So that’s why I’m really—I mean, I’m very pessimistic about the situation in the region, but being realistic, I mean, it’s going to be really rough. Iran will hold on, but they’re more in defensive mode right now.

Trump and the Ukraine Endgame

And in terms of Ukraine, at some point, the U.S. is going to have to sue for peace. We’ve been talking about this for years, Danny, and I remember, not to boast, but when you interviewed me many times before Trump was president, I constantly said, this is what the situation would be. The U.S. does not have the leverage to force Russia to make concessions. I always said that Trump would not be able to end the war on U.S. terms.

At some point, the war will either be ended on the battlefield by Russia winning a decisive military victory, which could be a few more years, or at some point, the U.S. will be forced to sue for peace. It will be forced to make concessions that it didn’t want to make in recognition that if it waits too long, Russia will make even more victories.

So, I mean, in that case, again, from the very cynical perspective of these imperialists in Washington, they’re not really losing that much because it’s the same thing with Israel. They don’t really have any soldiers on the ground. They don’t have to deal with American soldiers coming back in coffins, angering people in the U.S.

And unfortunately, let’s be real, I mean, the majority of Americans don’t necessarily support these wars, but the reality is also there—they don’t really care. The majority of Americans don’t care. And as long as they don’t see all these American soldiers coming back dead, from their perspective, it’s not really a big issue.

And then the other thing is the money given to Ukraine. But a lot of that so-called aid is not even really aid. Again, it’s money that goes to U.S. corporations, the military industrial complex. And it’s not like Americans actually have any impact on U.S. government policy anyway. There have been empirical studies by scholars that show that average Americans have zero impact on government policy.

So from the cynical perspective of these imperialists in Washington, they’re actually just—they’re giving weapons to Ukraine, but actually that money is going to the pockets of U.S. corporations, which is military Keynesianism, floating this, continuing to inflate this bubble that keeps the U.S. economy afloat by putting money in the pockets of these investors in Wall Street.

The Real Focus: Latin America and the Pacific

So I don’t think that these are not a big drain on the resources of the empire. What they’re really focusing on is Latin America and the Pacific. It’s all the whole pivot to Asia that started under Obama—that’s still the priority, right? And even though they can’t wage a direct conventional military war with China, they’re preparing for conflicts, for wars in the Pacific region. Which is why, listen to any speech that Hegseth gives. There’s a reason he says they’re preparing for war—they’re preparing for wars in the Pacific, right?

DANNY HAIPHONG:

Yeah, it’s not preparing for war with Ukraine or Russia or anything like that. And I think that goes also to your point about where the weapons are going, where the money is going into these private military contractors. This goes for this whole shift in strategy. Oh, NATO, Europe, they’re paying for everything.

Now that that’s always just meant literally that NATO countries will just be doing what they’re supposed to be doing under U.S. diktats, which is utilizing the U.S.’s military industrial complex to not only beef up its profits, but also in an attempt—although it’s a sad attempt given the for-profit character of the so-called U.S. national security or U.S. domestic defense industry as it is—to beef up NATO so it can prepare for war with Russia or wherever it wants to go.

Here’s a question for you, Ben.

The Real Constraint: Physical Resources, Not Money

BEN NORTON:

Danny, one quick point I want to make on this. Because the U.S. empire has the exorbitant privilege of printing the dollar, which is the global reserve currency, the issue, from the perspective of the U.S. empire, the constraining issue, the bottleneck, is not the cost of these wars. They don’t care, they just print the money. That’s what they’ve always done.

The constraining issue, the bottleneck, are the actual resources needed to make this military equipment, these weapons and ammunition and systems. And we saw this with the trade war with China when China restricted the export of rare earth to the U.S.—that terrified the military industrial complex because the U.S. is preparing for war with China in the future, right, in this new Cold War. And in order to make all that military equipment and hardware, it needs rare earths from China.

The same thing with the war in Ukraine, with giving weapons and equipment to Israel. The issue is not the money. They will continue to print the money until the dollar stops being the global reserve currency and then the deficit and debt will become more of an issue. But until then, they have this exorbitant privilege. They’ve always done that. They will continue to do it.

The constraint is the physical resources, the physical capacity of the U.S. to make more weapons, more planes, more tanks, more missiles. And there actually are restrictions significantly. We’ve seen that for instance in Ukraine—the U.S. has relatively de-industrialized. We’ve seen that Russia has shown itself to be much more efficient in re-industrializing and making a lot of this equipment and these weapons and such.

That’s the real bottleneck. But people always focus on the money. But the U.S. is giving all this so-called aid to Ukraine and Israel and it’s so many billions of dollars—the dollar sign doesn’t matter. The U.S. will always print that money. Yes.

Audience Questions: Quantum Computing and Taiwan

DANNY HAIPHONG:

And we have two audience questions I’ll put up at the same time. You can answer each one of them as brief as you want, Ben. First, we have here from Peaceful Earth: Can Ben speak to China and the USA competing in quantum computing, replacing satellite GPS with constant GPS? Could he speak to the multiple lunar moon bases Russia and China have planned in 2030? So that’s a lot. You can answer that as briefly as you want, Ben.

And then there is this one which is a little briefer. Global Prosperity says: Is the U.S. throwing a lot of money on chips to also prop up Taiwan’s regime?

Understanding Semiconductor Manufacturing and Taiwan’s TSMC

BEN NORTON: Great questions. Now I hate to give this answer, but I actually don’t really know much about quantum computing. It hasn’t been nearly as much of a hot issue as semiconductors as chips. And I certainly don’t know much about the plans for China and Russia to have installations in space. So unfortunately I don’t know much about those.

In terms of chips, that’s actually a great question and this has been reported on a lot. So I do know much more about this issue and I read that book “Chip War,” which is a great book I recommend, by the way, even though I disagree strongly with a lot of the political views, to understand how this chip issue is so important from the perspective of these imperial strategists in Washington.

And this new cold war, it’s like the rare earth issue. There are certain bottlenecks that can cause issues in the rest of the system and rare earths are an example of that. China has total domination of the supply chains for rare earths. So the US cannot develop a lot of this high tech equipment, not only in terms of military equipment, but also high tech technology for AI chips and such without rare earths. It’s a huge bottleneck.

And in terms of Taiwan and the TSMC, which TSMC, again to people who don’t know, this is the most important company in the world in terms of manufacturing the most high end chips. So Nvidia designs those chips. ASML in the Netherlands creates the photolithography machinery, the equipment, the fabs that are used to actually manufacture the chips. And then TSMC manufactures the chips.

This is a very technologically advanced, very technical form of manufacturing. I’ve watched these documentaries about TSMC. It’s actually really amazing what they have. Like their technology is so advanced that, if for instance, like in Arizona, one of the issues that they had building these plants in Arizona is earthquakes. Even if you have a very low intensity earthquake on the Richter scale, because this form of manufacturing is so technical and so advanced and so precise, even if you have these low Richter scale earthquakes, it can actually cause damage to the manufacturing of these chips. They’re so advanced.

So you can’t just build a factory out of nowhere. The reason it takes so many years to make these factories is they’re extremely complex. Anytime the worker goes in, they have to put on these suits like you see in a sci-fi movie, because you don’t want to infect anything. These are completely, I mean these are very advanced forms of manufacturing.

That’s why when the Biden administration was spending all this money to pressure TSMC to open factories in Arizona, there was a significant shortage of skilled workers because, I mean, you can’t just train someone to do this in a month. This takes a lot of training. It’s very advanced. You need very skilled workers, which is why TSMC was forced to send over half of their workers in the Arizona factories from Taiwan. Their entire families were sent over.

And then you have all these issues where these people from Taiwan who are, these are Chinese workers in Arizona, they hate living in Arizona. They hate the bad infrastructure, they have to drive everywhere, the horrible health care and education, how expensive everything is.

Taiwan’s Political Parties and Economic Strategy

Okay, now getting back to your question about whether or not this is propping up the separatist forces in Taiwan. Ironically, it’s actually probably hurting the long term stability of those separatist forces in Taiwan. This has become a huge issue inside Taiwanese politics because basically you have two main political parties. There are others, but the two main political parties are the Democratic Progressive Party, in scare quotes, the DPP, which is very closely allied with the Democratic Party in the US. They’re a neoliberal party economically, like the Democrats. They’re neoliberal, but they also push progressive cultural and social policies on women’s rights and LGBT. Those are of course important issues. But they’re like the Democrats. They ignore class, they ignore social welfare benefits and things like that. They ignore economics and focus only on cultural issues.

And then you have the KMT, known as the GMD, the Kuomintang. In English, it was transcribed as KMT because of the Wade-Giles system. But actually it’s the GMD.

So ironically, historically the GMD, the Nationalists were the anti-mainland party. So they originally were led by Chiang Kai-shek, who had been the most vicious anti-communist, part of the coalition originally between the Nationalists and the Communists, going back to Sun Yat-sen, who was part of the left wing of the GMD, who was pro-Communist. And they had a coalition against the Japanese invaders.

And then after the end of World War II, there was the civil war and Chiang Kai-shek was waging this war against the Communists. They lost that war and Chiang Kai-shek and the GMD forces fled to Taiwan, which has been part of China for hundreds of years, for longer than the US has existed as a country. Taiwan has been part of China.

They created this regime on Taiwan. The US had military bases and stored nuclear weapons on Taiwan. During the second Taiwan Strait crisis in 1958, they came close to using those nuclear weapons against the mainland. Eisenhower refused to do so. But it came very close to nuclear war.

So throughout that period in the first Cold War, the GMD Taiwan were very anti-mainland, very pro-US. Ironically, what we’ve seen in the past few decades is that the GMD politically has shifted. For instance, people talk about how in the US the Democrats previously were the pro-slavery party and then the Republicans previously were the anti-slavery party. And then there was this party reconfiguration realignment really starting under FDR and the Democrats ostensibly became a more pro-labor party, more progressive, anti-racist party ostensibly.

Certainly today the Republicans are very explicitly racist and very explicitly anti-worker. The Democrats at least say they’re not racist, but they’re all, and they say they’re not anti-worker, but they’re neoliberal, whatever. There was this party realignment.

Something very similar happened in Taiwan with the GMD KMT. They’re actually now seen as the more pro-mainland party. And if you look at they have a new leader, they just actually elected a young leader. And she is actually of all of the political forces in Taiwan, she’s the most pro-reunification in the mainstream forces.

The DPP’s Betrayal of Taiwan’s Economy

So the GMD actually have made this a huge issue in Taiwan because they’re accusing the DPP which is currently in charge, the pro-US forces, they’re accusing them of betraying their own economy, their own people and betraying their own workers by selling off TSMC to the US and basically allowing first Biden and now Trump to take over TSMC and try to turn into a US company.

That’s been the US strategy is to take TSMC out of Taiwan and put it in the US which is gradually what’s happening. And basically the GMD says that the DPP is sacrificing Taiwan’s own local manufacturing sector on behalf of international capital of the comprador bourgeoisie, which is objectively what the DPP is doing.

If you had a look at the class alliances of the GMD and the DPP, the GMD is much more allied with the manufacturing sector and the forces that have a lot of cross exchange with the mainland, which is also why economically they have invested interest in deepening integration with the mainland. Whereas the DPP are completely neoliberal and they’re compradors. Their interest is deepening financial ties with Wall Street and Silicon Valley, technological ties, not in developing their own local manufacturing capacities.

So I mean in terms of your question, what actually is happening is the DPP is weakening the long term, the longevity of the Taiwanese economy and preventing Taiwan from deepening its economic integration with the mainland. At the expense of just allowing the US to gobble up all of their important companies.

DANNY HAIPHONG: Yeah, yeah. And there isn’t a threat of war anytime soon, definitely because of what China has already demonstrated. And it’s both its capacity to thwart such a situation, but also in the fact that it would just absolutely be catastrophic for Taiwan and the entire region.

But also just how ironic it is and how absolutely delegitimizing it is to have a country like Japan, for example, as we covered earlier, come in and say, oh well, there might be this situation where we get involved in a war over Taiwan. Even just that rhetoric, the way that the current leader Lai Ching-te talks about Taiwan, the way that the DPP is shifting and becoming almost more and more extreme does serve, especially at the global level.

Unfortunately, the impact on the island is probably very contradictory and unfortunate. But in terms of the global ramifications of how this DPP leadership is making out. Did you see Lai Ching-te talk about, he hosted APEC and was talking about, oh, we’re so together, you know, like it’s just this, it just looks and smells and walks. If it walks like a duck, talks like it’s a duck. It walks like a proxy, like a shill, a puppet of the US, talks like one, it is one.

And that’s what is becoming more and more apparent every single day that the DPP holds on to whatever political rule it has left on that island. It’s just, it’s astounding. It really is astounding. It gets worse.

BEN NORTON: Yeah. The point I was emphasizing there is that this is not just us as outsiders, people. A lot of people in Taiwan are saying the same thing. The DPP are undermining the sovereignty. I mean again, Taiwan is not a country, it’s part of China. But they’re undermining their own local economy and their own economic resources by selling off everything to the US. And TSMC is a good example. This is the crown jewel of the Taiwanese economy and they’re giving it over to the US basically for nothing.

And this is why even the GMD, which historically was an anti-mainland party but now is more pro-unification, they’re openly saying the DPP are a US puppet party of outsiders who are undermining their own economy.

Japan’s Colonial History in Taiwan

One other quick note, you mentioned this earlier and I had forgotten to mention this point. Japan trying to get involved in all of this, obviously by being pressured by the US is so outrageous. If you know anything about the history of China and Taiwan being part of China, Japan colonized Taiwan. Japan, in the First Sino-Japanese War in 1895, Japan, the Japanese Empire colonized Taiwan which had been part of China for hundreds of years. Again before the US even existed as a country, Taiwan was part of China. Japan colonized it in 1895.

And then finally after the Japanese Empire, which was ally, let’s not forget with Nazi Germany and fascist Italy in World War II, finally Japan was defeated and Taiwan was reincorporated into China in 1945.

So now you see the Japanese Empire, well, the Japanese extension of the US Empire once again getting involved saying they’re going to defend Taiwan in scare quotes. Yeah, the last time they so-called defended Taiwan, they colonized Taiwan. Give me a break. This is absurd.

DANNY HAIPHONG: And it was brutal. If anyone watched the movie “City of Life and Death,” what the Japanese did on the mainland of China, just you can just imagine exporting that to the Chinese island province of Taiwan. Absolutely horrific. Horrific. Five decades which no one in the world wants repeated.

And so on that note though, Ben, I think we can close up here. It was a great show. I want to be sure to do this. I might have forgotten to do this in the interim, but want everyone to be sure to go to the video description. I am putting Geopolitical Economy Report there. That’s where you can find all of Ben’s videos. Also there you can find all the places to support this work, Patreon, Substack.

BEN NORTON: And so much more.

DANNY HAIPHONG: Hit that like button before we go. That helps keep the video going after we are done. And I’ll be back on Wednesday afternoon actually with a new guest. I’m very glad actually Ben. She contributed to, or you shared one of her pieces. Sevim Dagdelen. I got to get that right before she comes on. She’ll be on Wednesday. Yeah, it’ll be a great conversation. Former now German Member of Parliament or Bundestag. The German Parliament. She’ll be on. So 12:30pm Eastern time. So be there, save that date.

And without further ado, everyone take care. Good night. Thanks for coming on. Thanks for all the super chats. Thanks to everyone who also was moderating. Thanks so much for everyone watching.

BEN NORTON: Bye bye.

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