What does it mean for Trump to remove tax subsidies for electric vehicles when he takes office? Let me tell you that the historical opportunity that belongs to China has come.
What does this mean? Let's first understand why Trump wants to remove subsidies for electric vehicles, in order to suppress oil prices. You may think that the subsidy for electric vehicles should be abolished and everyone should buy gasoline vehicles? That's not to raise oil prices, how can it be to suppress oil prices?
It must be clear to everyone that Trump has a point of view, and that is to control the world through oil prices. He once said that when he was in office, the price of oil was thirty or forty dollars for a long time, and there was no war in the world. Because everyone has no money to fight. As soon as the price of oil rose, these big oil-producing countries became rich, so they began to make trouble.
So Trump's strategy is to suppress oil prices. So how is he going to suppress oil prices? The core strategy is to let the United States increase its horsepower and desperately increase production. Global oil production in 2023 will be about 90 million barrels per day, of which United States will be about 12 million barrels. United States, Russia and Saudi Arabia are the three countries with the largest production capacity in the world.
Since the outbreak of the Russian-Ukrainian war, the United States wants Saudi Arabia to increase production capacity to lower oil prices. However, Saudi Arabia and Russia reached an agreement, and OPEC+ not only did not increase production, but reduced production capacity by 2 million barrels per day.
Now in the lower reaches of the economy, the demand for oil is declining, so OPEC+ has also cut production to keep oil prices at a high level of 80 yuan.
Trump's strategy is that it doesn't matter if Saudi Arabia doesn't increase production, United States can produce more on its own. You must know that oil prices are very sensitive. As soon as production increases, prices can fall particularly outrageously.
At the beginning of the pandemic, many people should remember that there was a negative oil price. Trump is looking for that effect now. So if Trump wants to suppress oil prices, shouldn't he support electric vehicles more vigorously?
Trump has unveiled two plans, the first to eliminate United States subsidies for electric vehicles, and the second to increase tariffs on electric vehicles in China. I have to say that Trump is really powerful. If the support for electric vehicles suppresses gasoline vehicles, then Saudi Arabia and other countries can still reduce production to stabilize oil prices.
But now he is suppressing electric vehicles first, increasing oil production again, and then making another move in the future. After everyone increases production, he suddenly vigorously supports electric vehicle companies, and the oil price will collapse directly. Because once oil extraction starts, it cannot be stopped in the short term.
What does that have to do with us, China? Once United States increase oil production, it means that the relationship between United States and Saudi Arabia oil bigwigs will break down.
In the past, United States had very close relations with Middle Eastern countries. These countries supply United States with oil and tie it to the dollar, making it the world's currency. The United States, on the other hand, provides military protection for these countries, and everyone takes what they need.
But since the success of the shale oil revolution in the United States and the fact that they have begun to shift their industries, the United States itself is no longer dependent on Middle Eastern oil. Therefore United States gradual unbinding of relations with the Middle East is a natural result. Now that the United States wants to further suppress oil prices, the interests of the oil tycoons will be further damaged.
In recent years, Middle Eastern countries have been anxious about one thing, that is, the income is too simple, and they are eager to develop new industries. However, in the past, Western countries were mostly fooling them, and did not really help them to achieve industrial transformation.
This is China's best chance. Many people may find that Saudi Arabia, the U.A.E. and other countries now have very good relations with China. Because China has been helping them transform their industries right now. This is an opportunity for China to intervene in the Middle East. We used to teach these Middle Eastern bigwigs how to make money, so as to get a more stable supply of oil and lower oil prices.
There is also a key point here, which is that the renminbi can be further internationalized with the help of oil from the Middle East. Therefore, if Trump comes to power, China will usher in a historic development opportunity.
Then you may not understand, oil is so important, why did the United States take the initiative to give up? It is also normal for United States to give up oil, because with the development of global trade, oil is now much less important in world trade. Now the world's most important resource is already chips.
Chips are the most traded commodity in the world. United States firmly controls chip products, and they can maintain the status of the dollar, which is also where Trump's confidence lies. If you understand all this, you will know why Trump is giving up on electric cars and returning to the oil age.