Founder OF 21st Century Australia Party and author of ‘101 Ways to Improve Australia’, Jamie McIntyre says, “countries should not retaliate to Trump’s trade wars with tariffs, as that would only make it worse. Instead, they should simply start selling US debt holdings, which would force the US to stop living above its means and live within its budget”.
McIntyre goes on to explain, “this hasn’t been done for decades and would ensure Trump learns that trade imbalances, especially deficits with other countries doesn’t mean the US is being taken advantage of, but it simply means they are getting funding from other countries to fund US’s inability to live within its means.
“The US forgets that China is a major holder of their debt. China doesn’t need to slap increased tariffs to send a message to Trump, they can simply dump their US holdings of debt. However, unlike the US, China is more inclined to focus on a win-win scenario and thus respond calmly and smartly.
“Either way, Australia has a $25 billion deficit with the US, therefore, the US can’t complain about Australia. However, maybe we need to reassess our over reliance on the US and build stronger relations with China and even Russia.
“Why damage our financial future with China over the US for so-called ‘security reasons’ when we don’t need any US security since:
- We have no enemies,
- We should have learnt our lessons after World War II, i.e. to not rely on declining empires like we did with England when Singapore fell in less than 24 hours”, he said.
McIntyre’s comments that creditor countries should simply sell their US debt holdings was also echoed by former Reserve Bank Board Member Warwick McKibbin in the Australian Financial Review recently. McKibbin said “(creditor countries) should focus on selling their holdings of US government debt and invest the money in other countries. The trade deficit is the mirror of the capital inflow”.
Jamie McIntyre is the founder and leader of 21st Century Australia Party.