Japanese Yakuza have a unique form of extortion known as sōkaiya. Instead of harassing small businesses for protection money, the yakuza harasses the stockholder meetings of large corporations. But that was a big mistake, forcing the introduction of anti-organized crime law in 1992 and 2011. As a result, the mobsters were forced to go underground, losing their influence over time.

 

As long as a Yakuza kills another Yakuza in gang wars, the police won’t care and will close both eyes. But once the gangsters hit civilian, then the problem started. The authorities would be forced to act. Japanese lawmakers Shinji Oguma knew the behaviour of a Yakuza when he sees one. He has raised eyebrows when he slammed U.S. President Donald Trump over his tariffs.

 

As America’s closest key ally in the Asia Pacific, Japan rarely criticizes the U.S. – till now. While China sees Trump as a bully, Japan sees him as a gangster no different than a Yakuza when opposition lawmaker Shinji Oguma – in a speech during a parliamentary committee hearing – has warned the ruling government to resist America’s demands, likening it as a “delinquent kid extorting someone.”

 

Oguma said – “If Japan listens to this and bends the other way in response to the impossible demands of bargaining and deals, it will set a bad example as a customary and historical precedent. If you get mugged and put money in their hands, they will come back to mug us.” That described precisely how Yakuza grew its power and network through extortion.

 

The Japanese lawmaker knew, the same way Beijing understood, that Trump would not stop extorting and bullying even after he got what he wanted. The U.S. president will come back with other demands. That’s why China decided to retaliate instead of trying to appease the bully. Beijing knew the White House will return to suppress China again if Trump is allowed to win.

 

Unlike other smaller nations that can be bullied and extorted, China is a different kettle of fish. Having engaged with the U.S. in trade war for the last eight years under Trump’s first term and Biden administration, China knows that the U.S. isn’t invincible. After all, America has misjudged China before – President Harry Truman thought China was an easy meat in the 1950-53 Korean War.

Both Truman and Gen Douglas MacArthur, fresh from a great victory in the World War II, believed that China under the leadership of Mao Zedong was too weak to intervene, too poor to fight, and too ill-equipped to make much difference. The Yankees paid dearly when US-led forces faced a rout, encirclement and total humiliation as 200,000 Chinese troops poured across the Yalu River.

 

The Chinese call it the “Anti-American War” rather than the Korean War. When Chinese Foreign Ministry Spokesperson Mao Ning on April 10 shared a video footage of Chairman Mao Zedong’s speech in 1953 on social media platform X, with the words “We are Chinese. We are not afraid of provocations. We don’t back down,” it was to remind Trump of the U.S. defeat in the Korean War.

 

If a poor and backward China was willing to face a wealthy and powerful United States in 1950, what are the chances that the Chinese will roll over today now that it is the world’s industrial powerhouse and financial creditor – with some US$6 trillion of foreign exchange assets? What are the chances that China – the world’s largest creditor – would lose to the U.S. – the world’s largest debtor (with US$36 trillion debts)?

On April 11, 2025, the foreign ministry shared another quotation of Chairman Mao in 1964 on the X platform – “America is just a paper tiger. Don’t believe its bluff. One poke, and it’ll burst!” This time, it was to rally and unite the Chinese people in the ongoing trade war against the U.S., as well as to ridicule and call Trump’s bluff in his poker game of tariff war.

 

It was not hard to smell Trump’s defeat from miles away. Trump kept telling the world that he will not retreat on tariffs and that “nobody is getting off the hook”. Yet, he has done exactly the opposite. He backed down against Canada and Mexico after discovering that American car prices would go through the roof. He dared not go full force in slapping tariffs against Europe.

 

He panicked and quickly issued a 90-day freeze on his own tariffs after the U.S. dollar, stock market and bond market crashed. He immediately reversed his own self-imposed 145% against China after discovering that an iPhone would cost US$3,500. And he whined and bitched when Vietnam, Malaysia and Cambodia rolled out the red carpet for visiting Chinese President Xi Jinping.

Nvidia, taking a US$5.5 billion financial hit after the U.S. government limited exports of its H20 artificial intelligence chip to China, had to send CEO Jensen Huang to Beijing for damage control. The clearest sign that the U.S. needs China more than China needs the U.S. came after the revelation that the White House has – privately and repeatedly – begged Beijing to request a phone call from Trump.

 

Disallowing Trump to save face and claim victory, the naughty President Xi deliberately retaliated by slapping a 125% tariff on American exports to China instead of calling his counterpart. Donald Trump told reporters that he would be willing to meet Xi Jinping, whom he also described as a friend. But Beijing repeatedly rejects phone calls, let alone meetings.

 

Rather than dancing to Trump’s tune, China announced that after the retaliatory 125% tariff on American goods, it will stop matching any future hikes in duties by Washington, whose tariff strategy it branded a “joke”. Then, Beijing unleashed non-tariff attacks on the U.S. – cutting off rare earth supply, warning 270,000 students and millions of tourists about visiting America, and suspending purchases and deliveries of Boeing.

Dozens of U.S. businesses have also been blacklisted in the “unreliable entity” list while at the same time, Beijing has opened antitrust probes into American companies, such as pharmaceutical giant DuPont. China appears ready to escalate the trade war to include service trade – which covers travel, legal, consulting and financial services – where the U.S. has been running a significant surplus with China for years.

 

It works like a charm. Trump went ballistic and increased tariffs to 245%, before admitting going higher will be meaningless. With tail between legs, Boeing – America’s largest exporter – has to fly brand-new 737 MAX 8 aircrafts originally destined for a Chinese airline back to the United States. Trump was shocked as he didn’t anticipate China would go as far as cancelling Boeing orders.

 

When Beijing labelled Washington as a bully, it was not merely rhetoric. The Opium Wars, which saw the weak and corrupt Qing dynasty signed a series of “unequal treaties” that opened not only its lucrative markets to Western trade, but also surrendered Chinese port cities, have provided hard lesson that if you are backward and weak, you will take a beating and bullied.

The past humiliation has taught China to “never yield” as the Western power like the U.S. will continue to bully, suppress, oppress, extort and whatnot if the Chinese show an ounce of weakness. Even after China agreed to buy more from America during Trump’s first term, the Biden administration had continued the policy of suppressing the Chinese in the fields of economy, trade and science and technology.

 

China’s defiance has forced Trump’s dream team scrambling to find a way to climb down without losing face. The tariff war with more than 180 countries worldwide has backfired spectacularly, while the trade war with China has failed miserably. In desperation, the U.S. president lied that China has been calling a lot, and self-proclaimed that a deal with China is just weeks away.

 

Hilariously, Mr Trump also appeared to signal that he might lower China tariffs from the current 145% – even if a deal can’t be reached – under the pretext that “people aren’t going to buy” products in the U.S. if tariffs were too high. This suggests the POTUS agrees that not only his 145% tariff was both idiotic and a joke, but China holds more cards and he has lost the trade war.

And China has not even started targeting Apple, Tesla, Nike, Starbucks, KFC, McDonald’s, Walmart, Coca-Cola, Disney, General Motors, Ford, and other pharmaceutical and medical device companies. Beijing also has not started dumping U.S. Treasuries or bonds to destabilize the U.S. financial markets, yet the bond market has gone haywire and the U.S. dollar drops like a rock.

 

With only 43% approval rating in handling economy, it becomes even harder for Trump to save face without looking like a fool. Running around like a headless chicken, the president has gone bonkers and wanted to charge China-built ships of up to US$1.5 million per port call, only to trigger a widespread industry backlash and forced him to lower the fees to US$50 per ton of cargo.

 

The clueless White House has forgotten that almost all U.S. operators are depending on the foreign-built market, which in turn is more than 50% Chinese. China also controls 95% of shipping container production and 86% of the world’s intermodal chassis supply. To avoid the fees, ship operators could easily shift US-bound cargo to ports in Canada or Mexico, and use land-based transport to finish the journey.

To save face as he reversed his previous half-baked tariff policy, not only has Trump tried to spin an embarrassing retreat into a great victory, but is planning to use tariff negotiations to pressure U.S. partners to limit their dealings with China. However, Beijing warns it will retaliate against countries that cooperate with the U.S. in ways that compromise China’s interests.

 

If President Xi Jinping’s 5-day visit to Vietnam, Malaysia and Cambodia is any indicator, the White House’s desperate idea to extract commitments from U.S. trading partners to isolate China’s economy in exchange for reductions in trade and tariff barriers imposed by the Trump administration will be another epic failure. No country will be foolish enough to offend the world’s biggest factory.

 

Making countries choose between the U.S. and China in a trade war started by the U.S. president is clearly a demonstration of not only desperation and weakness, but also a blunder. Henry Kissinger once said – “To be an enemy of America can be dangerous, but to be a friend is fatal”. So, who wants to be the U.S.’ friend, especially with someone like Trump, who wanted to annex Canada and to snatch Greenland?

The U.S. should not feel embarrassed about losing the economic leadership to China. After all, the Chinese have been working very hard as “peasants” for the last 40 years. China is now leading in science and technology, shipbuilding and produces 1.7-million engineers per year (6.7 times more than American graduates). Yakuza Trump has miscalculated the balance of power when he tries to extort the red dragon.

 

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April 21st, 2025 by financetwitter

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