China Makes BOLD Move That Could Cause U.S. Prices to Spike

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V I D E O S    T O    W A T C H    N E X T :

Online Business Tips to Working and Traveling In Mexico: https://www.youtube.com/watch?v=9zGH0voCyOc&list=PLh3xKhkMgH_IA6s3KvB_g9Cc9Ze1eji8j&index=2

Moving to Mexico: 10 Reasons Why We Chose to Live in Guadalajara https://www.youtube.com/watch?v=dK23vD8_xjc&list=PLh3xKhkMgH_LAY7UV78YMgms-f2e1UcwN&index=23

Tips for Moving Overseas: Top 5 Remote Work Skills That Make Money: https://www.youtube.com/watch?v=bFzjCrlNAL8&list=PLh3xKhkMgH_IA6s3KvB_g9Cc9Ze1eji8j

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Transcript

Trade war with China - Precious Metals: 0:36

China just made some major waves when it comes to precious metals, and it's going to impact the entire global economy. Whether you live in the us, whether you live in Canada, or even somewhere in Latin America like we do. This is really, really global, guys. This is going to affect you no matter what, and it might not be in a very good way. We're gonna talk in a minute about exactly what all of this means. How China's fighting back against the US' trade tariffs and other trade wars that the US is doing against China and what it actually means, especially for US entrepreneurs and business owners, either in the States or. Abroad. I'm Justin Keltner and on this channel Entrepreneur, expat. We talk about everything to do with building the life of your dreams in a different country. If that's something you're interested in, if you like more information about taxes, about investing, about real estate in different countries and how to set yourself up for success for your journey as you move and invest and build businesses abroad, then definitely subscribe to this channel. We're putting out content. Every single week, multiple times a week on exactly how to do just that. And if you like this video, do us a favor and give us a huge thumbs up. You can also click that notification bell, that way you're notified. And it also helps us a lot reaching. Our community reaching more people just like you, and with our goal of getting to a million entrepreneur expats or aspiring expats, we really appreciate you being here. So what is it that happened recently with Beijing's policy and more importantly, why we've been studying a lot of this? We've been following it very closely because of course, at least according to the administration in the US, they consider China a little bit of an enemy in these trade wars. I don't think China's really much of an enemy. I think that everybody is trying to compete on a level playing field, and every country is trying to do its best. Just like we have this America first mentality, which makes sense at a lot of levels. China has its China first, uh, mentality and perspective. So it's important to realize that everybody's just kind of trying to do what's best for that country now, what the newest development from Beijing was. Is that they are now starting to control the export of precious metals that came from China. But this is not just for products that came from China. So it's not just for goods that were actually manufactured in China, including a lot of consumer electronics that we use. In fact, I look around here, I've got an iPhone, I've got another iPhone that we're recording with. I've got lights that are Chinese branded. I've got a. Uh, screen in front of me connected to my Sony camera. It's also probably made in China. That's got a weird, uh, like Chinglish brand. It's a feel world brand screen, you know, a little HDMI screen. Obviously that's made in China. Tripods made in China. This fan here that I bought in Mexico, made in China. Uh, this mug, let's see, designed in California, made in, you guessed it, China. So. Uh, China. I mean the, the, the funny thing is, and this was a, uh, something that, that I saw floating around the interwebs recently is Trump says, Hey, we have the cards. And then China says something like, well, yeah, but we manufactured the cards. But it's getting worse guys, because in this recent development, not only are they controlling the export of individual items that were actually made in China, but they're also controlling anything made in any country that includes any precious metals that were. Extracted or processed in China. So this is a really big deal. What this means is that if a, if an object, if an item is manufactured, even in Taiwan, even in Singapore, even in South Korea, they're not allowing those companies in those different countries outside of China to export those items unless they get Chinese permission. First, so naturally, and why, you know, why does this happen? Right. Naturally, China is really just trying to expand its export controls in response to everything that we're doing. So the, the US now and its allies are scrambling to reduce dependence because we have so many different things that depend on Chinese goods, and of course Chinese precious metals because China controls a really big percentage of the processing. Capacity of those precious metals. So yes, they have precious metals, and we have precious metals in, in the US and, and with allies as well. But China has a very big monopoly there on, uh, the processing of those precious metals. So in addition to that, there's new port fees by China, US shipping fees. Are now being disrupted and trade flows are being disrupted, costs are going higher, and how does it make sense? Like the whole point of Trump's tariffs was, I guess, to bring costs eventually down. For Americans, and it seems like that's not quite working. So why does this actually matter for the US and why specifically does it matter for you? Well, the US sees China's export controls and resource leverage as economic coercion, and it's stepping up manufacturing. It's stepping up high tech and supply chain reshoring efforts. Of course that includes nearshoring to places like Mexico, where where we currently live, although we're not sure if we're gonna be here forever. Probably not, but we're currently in Mexico and we see exactly what's going on. There's so many jobs being created down here in Mexico because the US is trying to move away from China. And in addition to that, the US just signed an$8.5 billion deal with Australia to develop the rare earth supply chains outside of China. But like I said before. China has so much power in terms of the processing of those rare earth metals and so much of our stuff. And it's not just electronics too, guys. And it's not just cheap home goods. Uh, our medicine depends on China. A good portion of the ibuprofen, for example, that we take in the US manufactured in China, we import a ton of food from China as well as from other countries. And the US is essentially expecting a fair deal with China, but. They're saying that they are gonna add more tariffs to China. Like none of it really makes sense, uh, because they're kind of negotiating with tactics that might have worked 20 or 30 or 50 years ago when we were still in a more or less unipolar world. Now we're so multipolar that it, it doesn't really matter because China has already reduced, its its dependency on us and on our customer base. I'll give you another example just kind of off the cuff, because we see this happening. We run a lot of infrastructure worldwide for servers. We're starting to get into infrastructure for AI as well because we use that so much in our business. So we're actually taking back some of that control and bringing it, uh, on premises essentially to some of our data centers, to some of our own. Uh, locations, including even here near Guadalajara, where, where we have servers and we're experimenting with new AI technologies and things like that. So I know a lot about the GPU market and how things are going there. Well, recently, and, uh, the, the CEO of Nvidia actually spoke about this not too long ago. Uh, he said that before they had something like 95% of the Chinese market for GPUs that's selling their GPUs. That were made by a US company in some cases, obviously made in China as well, but bringing profit to a US company, creating us jobs, including engineering jobs and so many other things. They were selling into the Chinese market. Then Trump said, well, you can't do that anymore. We're gonna, we're gonna ban exports of certain things to China. And in just the last couple years here now, China is creating their own technology they already have and most of the Chinese market. Is relying on companies like Huawei that's manufacturing, GPUs and other, other businesses that are local there to China, so it's not hurting China anywhere near as much as it's actually hurting US companies. Now let's talk about what this might mean specifically for you as an entrepreneur. Expat. So. If you rely on imports from China, whether that's at a big scale, like you're actually importing and reselling, or even at a small scale like you're buying hardware, electronics, and components, and of course even more so if you're selling to the US or global markets, costs are going up. Lead times are gonna stretch potentially a lot, and then disruption risk to your supply chain goes up a lot. Now if you do what a lot of people are doing and set up supply chain or production plants in Mexico or other parts of Latin America with Chinese goods, with Chinese imports, you may face secondary effects including container shipping, delays, tariffs, sourcing challenges, and whatnot. Because even if you're not directly subject to. What China is gonna be doing now, more and more of which is putting tariffs back on the us. You are now still going to be subject to all of the other macroeconomic changes that are happening here, the global supply chain changes that are happening here as a result of the policies that are coming about because this is affecting companies globally. So even if you maybe rely on a, a US company or a US ally like South Korea. And China's like, you know what? We don't want to send products to this particular company in Mexico because they're mainly based in the us. There's so many little nuances here that make it very difficult to actually avoid some of the effects of this. Now of course I'm gonna take a little play on Uncle Ben's. With great power comes great responsibility, with great, uh, opportunity, right? With great risk comes a lot of opportunity as well. And with, with great, uh, turmoil comes a lot of opportunity. So you may be able to reposition your business. To actually benefit. That might include sourcing alternatives outside China, marketing to us, companies who are diversifying away from China to give them other options. So that's certainly an idea, whether that's countries like India, countries like Vietnam, there's definitely a lot of manufacturing even moving to countries in Africa, and of course Mexico here as well. There's a ton of near shoring, so there's a lot of opportunities here. I'm just gonna say it though, like I, I think it's, it's just a really bad idea. These trade wars are a really bad idea. We're playing with kindergarten economics here, essentially. And they don't apply to the world that we have today. Now we're gonna talk a little bit about how entrepreneurs abroad should think strategically. So some actionable tips for that include mapping your supply chain if you're running a business, especially that's an e-commerce business, or a business that's drop shipping or manufacturing or anything like that. Because we do work with people in the US and Canada and all throughout the world that have fairly large companies. One of my previous clients is actually the founder of Barefoot Wines in. California, and I've had conversations like this with him about supply chain issues and sourcing and and and things like that. And so it's really important to take a look at inventory or supply chain. You wanna identify parts or services that today are sourced from China and take a look at some of the risks there. So look at the risk of tariffs, of export controls, shipping fee hikes, and things like that. And then take a look at alternatives. So could you perhaps move your sourcing to Mexico or Latin America, Southeast Asia, or even build things in house if you have the capacity to do so? In the US and of course monitor the US China policy calendar. So look at key talks, tariffs, export control announcements, because all of those things really matter. As an example, the US trade talks with China are upcoming via the Asia Pacific Economic Cooperation or APEC Forum. So that would be something you might want to get yourself to either in person or at the very least, have an idea of what's going on there. So that you know, hey, this is the direction things are headed, and you are flexible enough. Two, be able to pivot as you need and then leverage that diversification story with your clients and potential investors. So if you're in Latin America like we are now, you've got supply chain flexibility for US companies, and US companies are now paying more for that type of supply chain flexibility, because when we look back to the pandemic days, the entire global supply chain was disrupted. Like that was another risk because China's so far away when you compare it to somewhere like Mexico that has. A ton of very capable talent, but is much closer to the us. You obviously save yourself from issues like what's happening now with these tariffs and export controls and everything else, but more importantly, if there's ever some type of global calamity in the future, you're a lot more likely to be able to get those goods from Mexico than having to bring them all the way across the globe from China. Not to mention the cost of labor are going up in China anyway, so that's another thing that sometimes people don't take. Into account. I wanna highlight that perhaps is the most important part of this video is that this isn't just one little trade scrimmage. This isn't just one. Back and forth, and China's doing this thing and Trump is doing this thing. And he said, she said, and whatever else. This is something that's a lot more symbolic of what's going on in the world, what's going on with politics, what's going on with trade. And also it's really a canary in the coal mine for where we're headed in the future. And to me, these things are very, very, very concerning. Here's why. Okay. If our government right now is putting so much on the line for posturing, if they're doing so much that's based on, I would argue, very irrational policies, very irrational sources of of thought. And also in a way, I mean it's not just anti-capitalist because it's costing us money, it's also. What the US has done and been able to get away with for generations, which is just kind of bullying other countries into doing what would suit the US government, but it's not working anymore. And so these, these retaliations here from China are in response to what the US government is doing. And there are things that they maybe couldn't do before because economically they couldn't afford to. But this is a really big sign that if you're in the us, if you have a business in the us. And, and it's not just Trump and his administration. I'll, I'll take an example from what was going on with the Democrats and what Kamala was promising, which is, Hey, we're gonna tax you on all of your unrealized capital gains. And I think taxes in a big way are, are not constitutional and most of them should not exist. Don't get me started on that. But unrealized capital gains tax, I mean that would've made every real estate investor that was making any money in the US probably. Take their money elsewhere. And what this is doing is now any manufacturing company and even large tech companies like Nvidia Jensen was shaking his head and he's like, man, what? What are we, what are we doing here? In an effort to bully another country to essentially slow down their economy, which is what all of these tariffs were supposed to do with what all of the export controls that the US placed on US companies exporting to China were supposed to do. They all backfired. Those things are not working anymore. And this is a clear example that now other countries are fighting back. The power and the value of the US dollar is getting lower and lower and lower. The US economy, even though there's a lot of markers that are being faked or, or hidden or obfuscated in some way are, they're tanking. The economy is tanking, the stock market's going up, but that's not gonna last for long. Right? Unemployment's going up. Stock market is also going up. Okay. There's something really. Weird there because if the economy is going down with employment increasing and food shortages that we're now seeing and now programs like SNAP being cut for people that really need support, yet we're sending trillions of dollars overseas to wars. Right? And then we're trying to play this like Checkers game where we're one-upping other countries and trying to bring them all down just like the US has done for decades in Latin America and so many other countries, so many other regions of the world. All these other countries are starting to play chess. And so what you're seeing is you're seeing China play chess. So I'm gonna tell you right now, we help a lot of high net worth individuals get out of the us, get out of Canada, move to a place like Latin America, move to places like the Middle East, move to places like Eastern Europe and not just live a better life, but really have a very solid insurance policy for their future and for their family's future. So if you've got a million dollars. Or or more in net worth. And you want to get our personalized help. You want us to help you create a plan to get outta there, or at the very, very least, have a plan B, whether that's a plan B residence in your back pocket, a plan B passport for 20 or 30 or$50,000. All in, you can have a very, very, very good insurance policy on your family's future. Because if you're in your forties, you're in your fifties, even sixties, you might be all right. You might be able to kind of ride this out. But if you've got kids, you look at the decisions that this administration and the decisions that previous administrations have made, they're making life worse, not just for people in the in the middle class, not just for people in the lower class, but even, I would say, especially for people that are high net worth individuals, it's getting more and more difficult. Taxes are going up, restrictions on business are going up, thoughts are being policed now. Speech is being policed. You can see it happening in the UK all the time. It's coming to the us. It already is in the us. People are being pulled outta their houses, being pulled outta their cars. I'm not gonna get into all the craziness that's happening with organizations like ice, but you've seen it all and it's not looking great. And on top of that, it's gonna keep getting worse and worse. So if you think, well, it's not getting that bad yet. Maybe it's only getting 1% or 2% per year worse. I would say, what if you look at your stock portfolio and instead of going up by seven, eight, 9% a year, it gets 1% worse every year. And now play that out, not just into your life, but more importantly into your children's lives because they're gonna be around a lot longer than you and they want to have a plan B as well. And a lot of the, the passports that we get, a lot of the citizenships and residencies that we help people obtain, in fact, all of them, in the case of a family. Are also bestowed upon the children as well, so you can secure not just your future, but more importantly, your entire family's future. So I, I'm, I'm speaking from the heart right now. When I say book a call, it's entrepreneur expat.com/consult. Book a call with us, talk to our team. It's completely free. You can apply. If you qualify, you'll, you'll do that free call with myself or my team. And if you don't work with us, I don't care. That's not the point. But if you're in a position right now where you can get out, or at the very least have a backup plan, have a plan B, we've helped people that are high net worth individuals get the residents somewhere in Mexico and as little as 72 hours after getting approved in the consulate. So this doesn't have to be something where you're spending months or years getting. Just a second residency in your back pocket, you can be on your path and at least have a spot secured in another country where if things really do go south, you at least have somewhere to go. So I encourage you to take that step, book that call below, or at the very least, take that first step and, and do something to secure your future and to secure your family's future. You're going to regret it 20 years from now if you don't do this. But I can tell you for sure, you're not going to regret it. If you do, whatever way you can figure out a way to get out, figure out a way to build that plan B, because your life is going to be so much better and your children's lives are gonna be so much better at the end of the day if you get them on a path to success and bring them to a place where the economy and all the numbers are going up, not down. That's all we got for today. Thank you so much for being a part of this community. I appreciate you being here. Don't forget to like and subscribe if you haven't already. It really does help us out a lot. Book that consult below and if you're not a high net worth individual, feel free to check out all of the resources. We've got some free resources. We've got some courses as well that will help you. Along that journey, a lot of them are free, and a lot of them, if you're not yet making enough to qualify for residency in some of these countries will actually help you get there. So we'll help you, whether it's a remote job, whether it's building your own business remotely that you can run from anywhere. We're happy to help you do that. I'm Justin Keltner. Thanks again for tuning in today.