Written by: Meng Yan
Trump launched the so-called "Liberation Day" tariff war on April 2, 2025, triggering countermeasures from many countries. It is generally considered by the public to be a major event that will change the world economic landscape, and its far-reaching significance is close to the "Nixon shock" of the decoupling of gold and the US dollar in August 1971. The Chinese world at home and abroad, whether from the interests of China or the United States, generally holds a strong critical attitude towards Trump's policy. I personally focus on digital assets and Web3 technology, but I am more concerned about the position and development trend of encrypted digital assets and blockchain industries under this policy. However, due to my unfamiliarity with economic and trade issues, and my lack of understanding of the United States, I still need to resort to experts. For this reason, I once again made an appointment with Dr. Shao Qing to talk about this topic.
1. The essence of the trade war is a competition for intellectual sovereignty
Meng Yan: Mr. Shao, our discussion on Trump's crypto asset policy last time attracted some attention. Some readers said that it was the most logical interpretation of the Trump administration's crypto policy logic that they had read. But the situation has changed so quickly that it has even exceeded our expectations. Trump just announced the "unified tariff" policy, which has caused a great shock to the world. Many countries have expressed their intention to counter it. The economic circles at home and abroad almost unanimously believe that he is reversing the situation. It is a kind of populist manufacturing protectionism, reflecting that the Trump team's economics is not up to standard and the policy is chaotic. Some readers believe that since Trump's provocation of a global trade war will inevitably lead to chaos, his crypto policy has become irrelevant. I know that you have just conducted a long-distance and large-scale science and technology industry inspection in China and the United States. I would like to hear your latest views on the trade war and the development trend of the crypto industry.
First of all, I would like to hear your analysis of Trump's motives for this tariff war. Why does he want to impose this reciprocal tariff? On the surface, the United States has a large trade deficit every year, which is indeed "a loss". However, many economists have also pointed out that as the issuer of the world's reserve currency, the United States is not at a disadvantage in existing international trade. Despite the huge deficit in the current account, it can raise funds from the world at very low interest rates under the capital account. With just a few moves on Wall Street, it can make more money than a large factory in Asia can make in a year. Taking all factors into consideration, the United States is actually taking advantage. If this is the case, why does Trump want to implement a new tariff strategy? Is it really because he failed economics?
Shao Qing: To discuss this topic, we must first put aside our emotions and focus on facts and logic. I want to get straight to the point: Trump’s new tariff policy is completely different from the motivation behind the trade war he launched during his previous term. It is not simply to reduce the trade deficit, nor is it simply to repatriate all manufacturing, but to repatriate knowledge and technology. This purpose is structural and cannot be seen by just looking at financial statements. Therefore, it cannot be rationalized in mainstream economics and can only be denounced as nonsense.
Mainstream economics talks about GDP and trade, and only counts the value of money. So he sews shirts, you make high-tech precision equipment, I do financial services and take commissions in speculative transactions. No matter what we do, generating 100 yuan of GDP is the same in terms of monetary value.
But anyone who has worked in the industry knows that the same way of making money can be very different in different ways. What is the difference? The density of knowledge and technology is different. If it is made through engineering infrastructure, data analysis, algorithm development, and equipment manufacturing, then what is accumulated behind it is scientific and technological capital, knowledge capital, engineering capabilities, and system understanding; while if it is made through speculation, arbitrage, stock speculation, and platform marketing, then the growth looks lively, but what is accumulated behind it is the path dependence that cannot be replicated, the excessive demand for traffic and emotions, and the structural overdraft of entity capabilities.
The capabilities accumulated by the former are continuous, structured, and can be precipitated into the core assets of the country's all-round competitiveness. They are the "compound interest engine" of national capabilities. The latter is opportunity-driven and non-reusable. Not only is it difficult to precipitate into systematic capabilities, but it is easy to hollow out the entity, distort incentives, and create structural bubbles. What's more serious is that when the whole society regards speculative arbitrage as a symbol of "smartness" and asset speculation as a shortcut to "success", those who are truly capable of R&D, manufacturing, and infrastructure are marginalized. Over time, the entire country's knowledge structure, talent structure, and industrial structure will be reversely screened, and eventually fall into the trap of "prosperity on the surface and hollowness at the bottom."
With the advancement of globalization in the past few decades, the hollowing out of the US economy has become increasingly serious, not only reflected in the large-scale relocation of manufacturing, but also in the systematic loss of engineering culture and underlying knowledge of the industry. In this context, some important figures in the US intellectual and industrial circles have begun to reflect on the dogma of "the sanctity of free trade" in mainstream economics. Navarro, Peter Thiel and Elon Musk are the three most representative voices.
Navarro is a professor of economics at the University of California, Irvine. He served as an economic adviser to the Trump administration and was sentenced to prison for contempt of Congress during the Biden administration. Even though he was behind bars, he still wrote an important chapter on international trade and tariff policy for the Heritage Foundation's Project 2025, advocating "reciprocal tariffs" to replace "free trade" and emphasizing that "fair trade" is the institutional foundation that truly serves the national interest. Navarro's core logic is that the improvement of free trade efficiency comes at the cost of geographical imbalances in knowledge and engineering capabilities. The United States has saved manufacturing costs on the surface, but in fact has lost control of key industrial processes, complete manufacturing systems, and practical knowledge.
At the same time, Peter Thiel has also been issuing warnings from the perspective of capital and technology philosophy. He repeatedly emphasized that the American technology community has long deviated from the right path of "hard technology", obsessed with Internet traffic and financial arbitrage, and ignored the basic scientific research, manufacturing capabilities and engineering systems that can truly build a national moat. Thiel is extremely alert to the degradation of the United States in strategic fields such as manufacturing, energy, and semiconductors, and has invested heavily in "industries with high technology density, high friction, but huge long-term returns" through institutions such as Founders Fund, intending to rebuild the underlying structure of technological competition.
Elon Musk is the most representative figure in terms of action. He has an intuitive and accurate understanding of the loss of the United States' industrial systemic capabilities, and uses SpaceX, Tesla, Starlink, etc. as carriers to promote the comprehensive "re-industrialization" from rockets, energy, chips, robots, low-orbit communications to large-scale manufacturing. His core belief is very clear - if the United States cannot master the closed-loop manufacturing capabilities of technology based on first principles, it will not be able to truly maintain its global dominance.
These three people represent three seemingly different but actually converging paths: policy, capital, and industry. They made highly consistent judgments on the systematic imbalance of the United States' "knowledge density, engineering capabilities, and manufacturing system", but each chose a different way to deal with it. The Trump administration's comprehensive policy adjustment this time is actually an institutional correction attempt driven by these ideas and practices.
Therefore, the political slogan of Trump's "unified tariff" is to "fight for workers' jobs", but the fundamental motivation is to "fight for knowledge for the country". Behind this is a strategic judgment on future technological sovereignty: if the United States cannot restore its control over core manufacturing and engineering systems, it will eventually lose its leading position in AI, chips, energy systems, and next-generation industries, and thus completely decline in a short period of time.
The problem is that mainstream economics is still obsessed with the "measurable logic of money". They make statistics for the inflow and outflow of current and capital items, do actuarial calculations every year, and model every day. Have they ever thought about making a table for the inflow and outflow of knowledge and technology? Has anyone seriously counted how many complete sets of engineering capabilities, how many front-line process flows, and how many practical talents are dying in the United States every year? Who has calculated that behind the relocation of an industrial chain, what accompanies it is not equipment and orders, but the "knowledge deconstruction" of an entire generation? Economics that only counts money and models that only look at short-term indicators cannot see these structural and generational losses at all. In the final analysis, the problem of the United States today is that it has been misled by this kind of economics that only sees money, not structure, and only values price, not ability.
Therefore, we cannot view this trade policy with the "economics of the old times", nor can we understand it as a pure populist impulse. It is actually creating space for the re-anchoring of knowledge and the re-centralization of technology. It is a competition launched by the United States to re-consolidate its intellectual sovereignty. Although the means are crude and the path is steep, the strategic direction is clear.
Meng Yan: However, the United States still leads the world in technological innovation and still has strong manufacturing and engineering capabilities. Is the Trump administration overreacting a bit? Or is it deliberately exaggerating in order to manipulate public sentiment?
Shao Qing: The US real economy is still strong, and its technological innovation capability is still the best in the world, but the trend of industrial hollowing out is very obvious. It seems that there are still Apple, Nvidia, SpaceX, first-class universities, and top scientific research institutions, but the real problem is that this strength is "point-like", not "surface-like"; it is "top-level", not "systemic".
In other words, the United States is still leading at the top of the technology pyramid, but the base of the pyramid has begun to loosen and the body of the pyramid is breaking. A large number of mid-range manufacturing, applied engineering, and high-skilled talents are flowing overseas or turning to non-industrial sectors. If you take a look at the traditional manufacturing powerhouses in the United States, you will know that a whole generation of young people has been disconnected from the engineering system. They may write Python and understand AI, but they no longer know how to operate a lathe, no longer understand assembly line logic, and no longer want to go to the factory.
This is not an exaggeration of the problem, but a real crisis judged from the perspective of national knowledge structure and system capabilities. Trump may not be able to explain so many theoretical details, but he and his think tank have seen the symptoms. If these problems are not dealt with for a long time, they will become social disorder and national capacity collapse. From the perspective of more basic heavy chemical industry and construction capabilities, the problem of the United States is even more obvious. In terms of metallurgy, power generation, chemical industry, machine tool manufacturing and other national-level "hard chassis capabilities", the United States has long been far surpassed by China. Taking shipbuilding as an example, the shipbuilding tonnage of the United States in 2024 is only 200th of that of China. In the long run, it will completely lose the system capabilities of large-scale shipbuilding and marine engineering. These were once the industrial pillars that the United States was proud of during the Cold War. What's more serious is that the United States has not successfully developed a world-class large-scale infrastructure project for many years. Whether it is high-speed rail, super grid, large-scale water conservancy projects, or smart industrial parks, the United States is basically in a state of "stagnation or even degradation." At the beginning, it was a financial problem, and if it dragged on for a long time, it became a problem of organizational ability and system engineering ability.
So you can still muddle along in the current situation, but if you look at the trend, you can no longer delay. Today you can say you don’t want to do it, but in ten years, you won’t do it.
That is why Trump has to use the most radical approach, while there is still time, to pull back manufacturing, rebuild the engineering chain, and limit the spillover of key technologies - in essence, to re-anchor the structural foundation of national capabilities and regain the country's intellectual sovereignty.
Meng Yan: In this case, I understand why Trump is so eager to launch this trade war, because the problem of hollowing out of capabilities may be sharply magnified against the backdrop of the AI technological revolution.
Shao Qing: Yes, in every cycle of technological revolution, the contribution of knowledge and technological elements to economic growth and national strength will show a fault-like amplification effect. In the current AI and robotics industries, although the United States is still leading the frontier, if the hollowing out of the US real economy continues to worsen, the industrial base continues to collapse, the engineering culture continues to break, and the knowledge density continues to be lost, then even if AI technology is still leading in Silicon Valley, the United States may have a "top-heavy" structural imbalance, and ultimately lack stamina in long-term competition and be overtaken and eliminated.
For the United States, this round of AI technological revolution is not a game of cards that can be bet on repeatedly, but a historic window period in which it can only succeed and not fail.
If successful, the United States will not only be able to reintegrate the three pillars of technology, industry and finance, but also establish a new technological power structure of "AI sovereignty + encrypted dollar" in the world, completing the transition from the leader of the old globalization system to the designer of the new order. This not only means continuing its geopolitical dominance, but also means standing at the top of the food chain again in the new round of global knowledge redistribution.
But if it fails, the loss will not only be the AI industry chain, but also the structural fracture of the US national capacity itself - the financial system will not be able to find a growth anchor, the industrial system will not be able to revive independently, the social class will be further torn apart, and the foundation of trust will collapse. The most dangerous thing is that once the US "compound interest engine" is shut down, the technology and industry iteration of other countries will no longer be centered on the United States, and the United States will slide from a "platform country" to a "technology follower" for the first time.
The United States is actually saving itself.
There has been a successful self-rescue in history. The world empires before Britain - whether it was Mongolia, Spain, Portugal or the Netherlands - their global dominance lasted for about a hundred years or three generations. According to the words of ancient Chinese egocentrism, "since ancient times, the barbarians have never had a hundred years of luck." Britain once faced the same fate: in the early 19th century, Britain had established global hegemony for exactly a hundred years, coinciding with the rise of Napoleon, wars broke out on the European continent, and Britain's domestic debt soared. The proportion of government debt to GDP was even twice that of the United States today. At that time, it was almost a country destined to go downhill.
But what happened next completely rewrote the trajectory of this "Hundred Years Law": Britain's Industrial Revolution entered a period of explosive results from the accumulation period. From steam engines to railway systems, from textile machinery to metal smelting, technological innovation was applied on a large scale, and industrial production efficiency leaped, driving a leap in the engineering capabilities, organizational management capabilities, and capital formation structure of the whole society. This is not a simple economic growth, but a fault-like amplification of "knowledge and technological elements" - it allowed Britain to regain its structural advantages and successfully extend its global hegemony for another century.
This example shows that when a country can first complete the chain of "converting knowledge into productivity" in the cycle of technological explosion, it is possible to break the original cycle law, achieve longevity, and even redefine the global order. The technological dividends brought by today's AI revolution may have far greater potential and historical status than the industrial revolution. This is why more and more voices in the United States advocate that the geographical concentration of knowledge and technology must be brought back to the country, otherwise the so-called "free trade" will become a chronic hemorrhage of knowledge resources.
Meng Yan: In fact, this set of concepts is the most familiar to our generation of Chinese people, and we can understand and accept it the most. Deng Xiaoping said that "science and technology are the primary productive force", which is actually what he meant. Since there is a "primary productive force", it means that this productive force is different from other productive forces.
Shao Qing: Yes, if we look back, the opening-up strategy adopted by China after 1978 was actually centered around the two things of "introducing knowledge" and "absorbing technology". Whether it is "bringing in" or "going out", it is ultimately about creating a positive channel for knowledge inflow. This strategy is extremely successful. At the industrial level, China has achieved the transformation from a "technology importing country" to a "partial technology exporting country" in the fields of communications, manufacturing, energy, the Internet, and engineering technology. The basis for all this is that China has achieved the world's largest "technology knowledge import surplus".
During my travels in the United States and China, I discovered an interesting phenomenon: the people who can best understand Trump are actually the many "experienced people" in China's economic and industrial circles. Many of them are victims and opponents of Trump's trade policies, but many of them understand Trump's choices. I think this is because they have been the practitioners of China's economic growth over the past 40 years.
Meng Yan: Yes, one thing that resonates with me is that our generation has actually experienced the "compound interest of knowledge" firsthand. When I just graduated from school, I was working on mobile device development. When I looked at the technical experts in the United States, I felt that they were like gods, out of reach. The gap is not just at the tool level, but a gap in the cognitive dimension. You feel that they have the entire system, while we can only repair parts.
But in the past 20 years, China has developed too fast, and practice makes perfect. Many of my peers started as "engineering coolies", doing OEM and supporting work, and then gradually moved from imitation to improvement, and then from improvement to local innovation, and even the development and global export of complete systems. Like photovoltaics, new energy vehicles, communication equipment, basic manufacturing equipment... A generation of Chinese engineers, in one generation, turned China into the largest and most comprehensive industrial country in human history. Isn't this the embodiment of "compound interest of knowledge and technology"?
It does not grow linearly, but as long as you can keep the knowledge, use it, and pass it on, it will grow and fission on its own. As long as a generation does not do anything, does not do things, and does not understand the system structure, the knowledge density will collapse, and even if you have money later, you can't make up for it.
So I can understand why Trump suddenly "determined" to bring manufacturing back to the country. You can't just look at the employment data, but you have to see whether there are still front-line engineers in the country, and how many people know how to design a machine, how to run a production line, and how to build a building. Without these people, a whole generation of young people will go to become internet celebrities and live broadcasts. Even if the income is high, it is just a castle in the air and will collapse sooner or later.
Shao Qing: The opposite of China is the United States. Over the past thirty years, under the guidance of mainstream economic theory, the United States has been running wildly on the road of decoupling from the real economy and moving towards the virtual economy. The relocation of manufacturing industries is not a simple factory relocation, but an outflow of the entire engineering system, system capabilities, and underlying process knowledge. These outflows are actually tacitly permitted or even encouraged by the blind spots of economic theory.
The problem in the United States today is not a lack of money or jobs, but a structural loss of knowledge. For three decades, the United States has allocated a whole generation of its best talents to Wall Street to trade stocks, to Internet companies to develop advanced algorithms to accurately push advertisements to users, and to "optimize content" for entertainment stars and traffic platforms, but has not allowed enough talents to enter manufacturing, engineering, energy, infrastructure and industrial systems.
The result of this structural mismatch is that the overall American society's ability to "build something" - especially "build a complete set of complex systems" - has begun to show a serious downward trend. On the surface, the economy is booming, asset prices are rising, and innovation is active, but in fact, the country has seriously shrunk in the two most basic knowledge accumulation ecosystems of "engineering community" and "practice community". If this trend is not corrected and changes from elastic deformation to plastic deformation, it will inevitably break.
Some people think that American university education is still the world's leading, so these are all "groundless worries." In fact, this is wrong. Many knowledge and technologies that play a decisive role in the country and the economy are not produced in university classrooms or in ivory tower laboratories, but are accumulated in the practice of large-scale industrial manufacturing and system engineering development. "Practice makes perfect" is not a slogan, but a real path for knowledge to occur. If a country does not have enough practical engineers, does not have a sufficiently intensive industrial chain collaboration, and does not have sufficiently complex project implementation and engineering implementation, it will be difficult for those "textbook knowledge" to grow into the ability to be used, transmitted, and monetized.
You see, many American universities are still ranked among the top in the world, with many papers and advanced theories, but the problem is that the United States has withdrawn from many industries. In the fields of engineering infrastructure, shipbuilding, chemical industry, equipment manufacturing, etc., who is still doing big projects? Who is still leading thousands or tens of thousands of people to do system integration? Who is still touching the equipment to adjust parameters and carry the production line in the workshop? If these links are broken, those knowledge systems will become "dead knowledge" floating in the air. Once knowledge loses the soil of practice and the channel of inheritance, it will soon become unusable, and no one will even understand it. Engineering knowledge depends on scenarios, crowd density, and time accumulation. When you want to rebuild it after you lose it, it is not enough to allocate funds or build a laboratory to make up for it, but to rebuild a whole set of "knowledge production mechanisms in practice".
Therefore, the problem of the United States is not whether it has good universities, but whether it has a large enough engineering scene, enough practical talents, and a complete enough industrial chassis to carry this knowledge. Knowledge is not stored in books, but lives in the collaborative chain between people and systems. If this chain is broken, even if you have the best textbooks in the world, you can only understand it but cannot do it.
Many key capabilities that China has accumulated over the past two or three decades, such as the dispatching algorithms of communication equipment, the on-site deployment of intelligent manufacturing, and the debugging of the electric control system of electric vehicles, are not actually "invented by a certain university", but are honed in projects, in factories, and through hundreds of trial and error and on-the-spot judgments. These things cannot be taught without practical work and exploration, and they cannot be "made up by reading literature". So when the Chinese see Trump trying to "blame others" through tariffs, technology repatriation, and restrictions on technology spillovers today, it is actually very easy to understand - isn't what he wants to do what several generations of Chinese leaders have been doing over the past few decades? In essence, the United States has also realized that they have been experiencing the reverse process of "knowledge surplus" over the past few decades. What is constantly lost is not just the factory, but the organizational ability of complex industrial systems, the understanding of underlying processes, and the control of the path of technological evolution. If this continues, the United States will lose the complex mechanism that transforms knowledge into institutions, technology into production, and engineering into capabilities.
Meng Yan: This reminds me of a particularly harsh remark by US Vice President Cyrus Vance: "A country that does not manufacture will eventually lose its ability to design." It seems that this is not just a slogan, but a reflection of the Americans on a painful historical lesson.
However, many people believe that it is too late for the United States to reverse this process now, and Trump’s efforts to revive the manufacturing industry are doomed to fail. What do you think?
2. Risks of taking the initiative
Shao Qing: This is indeed a key issue. The motivation is understandable, but the method is not necessarily correct, and the path is extremely dangerous. From my exchanges with various industry and policy circles in the United States during this period, there is a very obvious sentiment: everyone agrees on the seriousness of the problem, but at the same time is full of doubts and even fear about the solution. This has formed a very paradoxical situation - reform is imperative, but the destructiveness of the reform itself is also extremely great.
Meng Yan: It’s a bit like the expression we are all familiar with, “To reform is to seek death, not to reform is to wait for death.”
Shao Qing: Yes, this situation is the most difficult to deal with. Su Shi said in "On Chao Cuo" that "the most unpredictable thing in the world is that the country is peaceful and has no troubles, but in fact it has unexpected worries." Why can't we do it? If we sit and watch the situation change and do nothing, "I am afraid that it will be beyond salvation"; if we take action and fail, "the disaster of the world will be concentrated on me." Trump is making this choice now.
From a political operation perspective, he could have chosen not to do this. With his current popular support, the degree of party integration, and the state of infighting within the Democratic Party, he would have been able to "get by" these four years without any major accidents. But he also knew very well that if he continued to follow the routine and maintain the status quo, in a few years, the only remaining generation of engineering and technology talents in the United States would have withered away, industrial capacity and system knowledge would have been completely cut off, and the structural decline trend would no longer be reversible.
I believe that most people in this world, if they were in Trump's position, would "sit back and watch the situation change, and do nothing". But he chose to "step up and take action". It is really not easy to make such a choice. It is true that extraordinary things require extraordinary people.
However, once this path is chosen, the wisest strategy is to take the initiative at the earliest possible time and with the strongest means. That is why he chose the most radical approach - to throw out the "nuclear bomb" when he just came to power, Congress was still in control, power was concentrated, and public sentiment was excited. Even if it is a gamble, it must be a gamble on a "strategic cycle window" to start.
Why? Because only in this way can we break through the key institutional barriers at lightning speed and establish irreversible policy inertia when the opposition has not yet completed the reorganization and the establishment is still waiting and watching. At the same time, it can also leave enough time for the subsequent release of positive news, fine-tuning, and reconstruction of the narrative. If we really wait until the resistance to reform is assembled, the party and the outside world cooperate to counterattack, and the capital market is successfully short for short selling, then this structural reconstruction will not be pushed forward at all. So his operation seems reckless, but it is actually smart - finish the most difficult part at once, and then use time to heal, use policies to stabilize, and use narrative to turn the tables.
Treasury Secretary Benedict spoke frankly at a closed-door briefing: The Trump team has a clear expectation of the cost of this round of policies. They know that this will bring short-term shocks and even severe market pains, but they are more concerned about "whether the narrative can be pulled back." In other words, it's not that they don't know the pain, but they want to "package and release" the pain, and then create a "Trump rebound" through a series of follow-up policies, such as tax cuts, deregulation, large-scale infrastructure and industrial incentives.
This "rebound" is not just a market rebound, but also a narrative rebound, which is to let society see hope from the pain and feel resilience from anxiety. On the one hand, tax cuts and regulatory relaxation can be used to quickly alleviate the initial pain and win the trust of small and medium-sized enterprises and manufacturing voters; on the other hand, it can also extend the timeline, leaving enough time for Trump to rebound and lay out in advance for the 2026 mid-term elections and the 2028 presidential election.
Meng Yan: In addition to domestic resistance, external risks are probably equally huge. You just mentioned that this strategic reversal is actually a challenge to the global path dependence after the Cold War and even after World War II. Does that also mean that Trump is directly attacking the entire "post-war order" this time?
Shao Qing: Yes, it can be said that he is making a surgical cut to the global order after the Bretton Woods system. Especially the transition from "free trade" to "fair trade", this is not a technical fine-tuning, but a fundamental change in the paradigm. You have to know that free trade is not only the premise of the economic model, but also the political foundation for the United States to dominate the world after World War II. If the United States relied on military power and ideological output to establish an alliance system during the Cold War, then after the end of the Cold War, it relied on the global trade system, the US dollar clearing network and the free flow of capital to maintain its world leadership. Why has there been nearly 80 years of overall peace in the world after the Cold War? One is nuclear deterrence, and the other is the United States' export of purchasing power and prosperity. Major powers dare not fight, nor do they want to fight. They dare not fight because they are afraid of nuclear war, and they don't want to fight because the international order established by the United States is not bad, which provides most countries with an upward channel.
What Trump is doing now is essentially to remove a corner of this order and try to reconstruct a new global trading logic that is beneficial to American knowledge and technology. This may block the upward path of many countries and will inevitably cause a sharp backlash. The biggest concern behind this is that if the fierce trade war continues to escalate, it may lead to the complete end of globalization and the world will return to a state of "harming neighbors". In the past 80 years, even if there have been local conflicts and institutional frictions, at least between major countries, a global order based on mutually beneficial trade has been maintained, forming a certain underlying logic of "mutual dependence is peace". And what Trump is now removing is precisely this logic. If countries believe that there are no rules in the global market anymore and fair trade is just a beautified rhetoric of power, then what will follow is not industrial transfer, but systematic decoupling, escalation of military-industrial competition, and even a comprehensive loosening of the regional security framework.
Once globalization collapses and countries turn to closed self-protection again, the situation will become extremely dangerous because it may break the bottom line of "no hot war" between major powers since World War II. If a military conflict between major powers breaks out in this process, all of Trump's policy calculations today will come to naught. Whether it is his "knowledge sovereignty strategy" or "industrial re-anchoring", once the world falls into geopolitical control and security panic, all economic policy space will be taken over by the logic of war. He himself will no longer be a "reformer", but will be labeled by history as the initiator of misjudging the world trend and triggering a global crisis.
We hope that the leaders of the world's major powers will be wise enough to avoid this tragic fate for mankind. If the war option can be ruled out, the next risk is the US dollar.
One direct impact of the trade war is the weakening of the international status of the US dollar. In the past, the hegemony of the US dollar was not only based on military power and national credit, but more importantly, it bound the circulation path of global commodities and capital. As long as the world is still on the track of "free trade + US dollar settlement", the demand for the US dollar will naturally exist. But if Trump makes trade itself unpredictable and even punitive, then other countries will have good reasons to promote de-dollarization - not out of ideology, but out of risk hedging.
This is the most dangerous and uncontrollable part of Trump's strategy. Internally, he can mobilize public opinion with votes; externally, he cannot stop others from preparing for a rainy day and starting a new business.
In this context, perhaps we will have a clearer understanding of Trump’s new policies on stablecoins and cryptocurrencies.
3. Crypto assets in the competition for knowledge sovereignty
Meng Yan: Do you think Trump’s new stablecoin and crypto policy is really in line with his overall trade war strategy? Is his policy really that meticulous?
Shao Qing: I know that many people, including observers inside and outside the United States, are actually skeptical about this issue. They think that Trump is just a political novice, his speech is exaggerated, and his policies are crude. How can he come up with a meticulous and coordinated national strategy? But this is exactly what we need to re-understand.
I don’t think Trump himself is a technocratic policy designer, but that doesn’t mean his policies are unsystematic. On the contrary, many of his key decisions are backed by deep policy think tank support, long-term ideological preparation, and very clear strategic demands. Look at Project 2025, the Heritage Foundation, and the reshaping of “economic nationalism” within the Republican Party over the past five years. All these materials have long linked the three things of “manufacturing repatriation + technological sovereignty + financial reconstruction” together.
Crypto assets, especially stablecoins, just provide an excellent interface - it can break through the traditional financial regulatory restrictions (of other countries), form a new global demand for US dollars, and stimulate a wave of grassroots entrepreneurship, bringing engineers, developers, and financial people back to the framework of "Made in the USA". This combination may not be a planned economy-style linear deployment at the tactical level, but its coupling is very clear in the strategic structure.
In other words, it is not certain whether Trump has a detailed blueprint for each step in his mind, but in action, he is indeed promoting a set of mutually interlocking and logical national reconstruction paths. However, this path is not achieved through rational consultation and international negotiations, but is bombarded with "policy nuclear bombs." This method is crude, but the persistence in the goal is rare, and it can even be said that the strategy is clear and the tactics are brutal.
Meng Yan: Just now you mentioned that Trump's trade policy weakened the dollar, but think about it carefully, even if the dollar is weakened, it is still invincible in the global legal currency. Who can replace the dollar? None of you here can. However, if other countries have joined forces to build the status of Bitcoin in the past few years, and then come up with a blockchain payment system anchored to a basket of legal currencies like Libra did, the dollar might be in big trouble today. Fortunately for the dollar, these countries do not have such foresight and unity. Now, when it is weak, it can rely on breakthroughs in regulatory policies to gain the opportunity to dominate the encrypted digital economy. In this sense, it is also better to understand why Trump wants to put Bitcoin on the strategic reserve.
Shao Qing: Many people in the crypto community have expressed dissatisfaction with Trump's "Bitcoin Strategic Reserve", believing that it is just a slogan show, with no clear purchase plan and no financial budget support, and looks like a speculative act to please the geek community during the election. But they overlooked a more far-reaching strategic consideration - the so-called "reserve" is not about how much to buy, but about establishing the dominant position in the transaction between the US dollar stablecoin and mainstream crypto assets such as Bitcoin.
In other words, the essence of this strategy is to ensure that the main trading pair of Bitcoin on a global scale must be the US dollar stablecoin, not the RMB stablecoin, the Euro stablecoin, or even the synthetic coin anchored by multiple national fiat currencies. This is a core issue of the currency pricing system.
Once this status is established, no matter how decentralized Bitcoin is or how it is “digital gold”, it must return to the coordinate system of the US dollar for pricing, settlement and exchange. From a monetary strategic perspective, this is equivalent to turning Bitcoin from a potential “opposite” to a “strategic ally” - it is no longer a competing currency challenging the US dollar, but an extension of the US dollar to the future digital economy world.
This actually continues a classic logic: the United States has never been afraid of new platforms as long as they can set prices. This has been true in history and it is still true today. What the Trump team needs to do now is to re-anchor the dollar's dominance in the crypto field, making stablecoins the "dollar fleet" of the digital economy, and Bitcoin one of the "flagship assets" under that fleet. Reserves are only superficial, and extending the dollar's pricing power is the core.
Meng Yan: Whether the logic you mentioned is valid, I am afraid we will have to wait until the US stablecoin legislation is implemented to determine.
Shao Qing: Of course, the core of this whole set of incorporation paths is stablecoins. Recently, there have been intensive actions in the legislation of stablecoins. The full text of the STABLE bill draft was released last weekend, which is actually paving this way - giving stablecoins a compliant and regulated identity, allowing them to legally assume the role of "on-chain dollars". This week, Senator Tim Scott announced his support for the "Debanking Bill". One of the most important agendas of this bill is to prohibit federal banking regulators from using "reputational risk" as a basis for evaluating bank-client relationships, thereby reducing the situation where crypto companies are refused service by banks due to the subjective judgment of regulators. In other words, once this bill is passed, US banks will be able to provide smooth financial services to crypto companies, and the channel between the US dollar fiat currency and the crypto world will "become a thoroughfare".
Once this is done, any financial application, smart contract, or even AI agent on any chain in the world will first access the US dollar stablecoin as long as it uses a unit of account and a payment channel. This means that the US dollar will rebuild its financial dominance in AI and the digital economy through an encrypted architecture.
I recently did some research in Seattle and found a very interesting phenomenon: a group of technical experts who originally came from Web2, AI and cloud computing are now starting to work on stablecoin startups. It can be seen that policy expectations are still very strong. This shows one thing: the market is no longer just testing the narrative of "on-chain dollars", but has begun to bet. And the direction of the bet is very clear - not to build a "decentralized utopia" again, but to build a complete set of financial digital reconstruction projects such as "Federal Reserve copy", "dollar API", and "on-chain compliant asset layer".
These entrepreneurs are not "old hands in the crypto", but talents who are familiar with distributed systems, cloud-native architecture, enterprise-level security and payment processes. They have an understanding of real-world scenarios, policy windows and compliance chains, and they have the technical capabilities to access the "new track of the US dollar" rather than to challenge it.
It's just like what you said, even if the US dollar is frustrated, it is still "invincible in fiat currencies", but the real threat may be "digital systems decoupled from the US dollar" such as Bitcoin and Libra. Now the Trump administration is obviously aware of this - instead of suppressing Bitcoin, it is better to control its pricing system; instead of blocking the on-chain world, it is better to dominate its financial infrastructure.
Stablecoins are the core of the financial infrastructure. As long as the clearing and settlement channels, pricing systems and transaction bases on the chain are firmly tied to the US dollar stablecoin, the crypto world will be an extension of the US dollar world, not an opponent.
Meng Yan: Technically speaking, if stablecoins are successful, they cannot be isolated. The rise of stablecoins will immediately trigger a series of linkage effects. For example, RWA (real world assets) are put on the chain: US Treasury bonds, corporate bonds, real estate securities, and technology company equity can all be turned into digital assets on the chain and settled and traded within the stablecoin system - this is the new generation of "Subscribe to America" mechanism we mentioned last time.
Shao Qing: Yes, although RWA is still a hot word in the industry, there are very deep geo-financial calculations behind it. It will directly drive global capital to enter the US asset market through on-chain methods, using US dollars to buy US stocks, US dollar bonds and US industry-related tokens. Moreover, this combination of "US dollar stablecoin + US RWA" can play a role both internally and externally. Externally, its task is to expand the dominant position of the US dollar in the global digital economy and hedge against the loss of trust caused by trade wars and geopolitical confrontations; internally, it is a tool to break the traditional financial regulatory structure, unleash growth imagination, and calm dissatisfaction.
Let's talk about the external part first. In the past, the dollar relied on technological innovation, military power, energy, trade surplus and global trust, but today these things are no longer solid. Trump's push for "unified tariffs" can certainly reshape the manufacturing industry, but it also weakens the myth of free trade and shakes the trust in the dollar. Therefore, a new "dollar demand channel" must be established - and stablecoins are the infrastructure of that new channel.
Once the stablecoin is legal and compliant, it can carry the flow and transaction of RWA assets. U.S. Treasury bonds, corporate bonds, real estate, technology equity... After all these assets are digitized and fragmented on the chain, they can be subscribed by global wallets like "modules". Global capital uses stablecoins to buy RWA, and U.S. assets can be "buyed at any time and withdrawn at any time", bypassing SWIFT, skipping the banking system, and avoiding geopolitical friction. This is the real "on-chain dollar suction field".
But the more critical thing is the domestic effect. Trump’s radical policies have begun to cause anxiety and dissatisfaction in the country, and it is urgent to release economic benefits to calm public sentiment. Recently, Treasury Secretary Bessant revealed that domestic tax cuts and deregulation policies are about to be released, and the policy benefits for the crypto digital asset industry are an important link.
Meng Yan: So the Trump administration is actually combining a set of "anti-globalization" tools, such as tariffs, and a set of "re-globalization" means, such as crypto assets, in a very special way?
Shao Qing: Yes. On the surface, there is no direct causal relationship between them, but through supply chain adjustments, capital path reconstruction, and financial instrument substitution, an indirect coupling is formed. You say that tariffs are blockades and encryption is openness - yes. But it is this tension that is a complete strategy. Tariffs are just policy parameters that most people can understand and see, but the real upheaval is the structural transformation of some invisible "hidden variables". Among them, AI and encryption may be the most important. It can also be said that the United States is now using AI and the crypto economy to ensure global digital economic sovereignty in order to regain technological sovereignty.
4. The purpose of infinite games is not to determine who wins and who loses
Meng Yan: No matter how we explain Trump's motives and reasons for starting a tariff war, we must admit that it is reasonable for other countries to express anger and fight back. Several countries have announced countermeasures against Trump's tariffs, including China. The entire world's trade system is in jeopardy.
Shao Qing: This fierce confrontation is essentially the product of a certain way of thinking. Including the United States, many countries today view the competition for intellectual sovereignty as a limited game to be decided. The direct result of this way of thinking is that each other is regarded as a threat rather than a variable; as an opponent rather than a co-actor. As a result, all negotiations become games, all policies become defense, and all structural adjustments are understood as zero-sum.
When I returned to China this time, I felt that there were generally two extreme tendencies in domestic public opinion regarding the trade war and Sino-US competition.
The first is the "decisive battle theory", which holds that China and the United States have completely entered a life-and-death confrontation cycle. The goal of the United States in launching a trade war is to completely defeat China. China is in imminent danger and must enter a special system for all-out confrontation.
The second is the "triumphalism" view, which believes that the United States has already declined irreversibly, that Trump's trade war is "self-destructive" and will only accelerate its own collapse, and that China's national fortunes are on the rise, so it can take its place and just sit back and wait for the end.
These two judgments seem to be contradictory, but in fact they both fall into the limited game mentality - that is, they regard the Sino-US game as a zero-sum competition, where either win or lose, and there is no reconciliation. This is seriously inconsistent with the facts. In fact, if either of these two major countries fails, it will be an unbearable burden for the other side.
Today, the global structural reconstruction is no longer the linear competition of "industrial scale + resource consumption" in the 20th century. It is more like a system evolution around knowledge production, technology transformation, organizational mechanism, and incentive design. Once you look at this with a limited game mindset, you will misjudge the direction, misallocate resources, and even be forced to quit the game.
Especially in the AI era, economic and technological competition has essentially changed from "scale confrontation" to "system co-evolution" - it is no longer about who can build bigger, but who can iterate faster, open more cleverly, and connect more deeply. AI is not a product, but a mechanism for continuous learning and evolution; therefore, it naturally requires participants to have sufficient patience, flexibility, and cooperation.
This means that the knowledge and technology competition in the AI era is a typical "infinite game". It has no end, no decisive victory or defeat, only a process of continuous continuation and evolution. The key is not to win once, but to always be qualified and capable of participating in the next round of upgrades.
The purpose of infinite games is not to determine the winner, but to keep the game going. Keeping the game going means maintaining an open ecosystem, updated rules, fair entry, and effective incentive mechanisms. You cannot block your opponent to the point of losing motivation, nor can you roll yourself inward to the point of collapse. The real opponent is not the other country, but the system shutdown, innovation exhaustion, and broken trust.
Therefore, we must be particularly vigilant against those who describe the competition between China and the United States as a "new Cold War" or "ultimate showdown" - that is the logic of the previous industrial era, which does not hold true in this round of technological revolution. We must move away from the emotional narrative of "either win or die" and truly enter a strategic mindset of "only by being able to continuously co-operate can we be truly powerful."
Meng Yan: I hope the world is as rational as you say.
Shao Qing: It requires wisdom. A wise country does not ask "how to win", but "how to continuously gain the ability to continue to participate in this game of co-evolution of technology and rules". This is the essence of what we call "infinite game". It is not about giving up competition, but changing the understanding of competition.
At the poker table of AI and crypto revolution, the only two players left are China and the United States. How they play the cards depends mainly on their way of thinking.
So we see that although the United States is fighting a tariff war and a decoupling war, it is doing open reconstruction in stablecoins and RWA. Why? Because it knows that technological sovereignty cannot be defeated by blockade alone. The real victory lies in who controls the rules of the next generation platform and who attracts more high-quality participants.
The same is true for China. We must move from "winning competition" to "designing competition" and create a soil for continuous innovation in terms of rules, systems, and ecology. We must allow and even tolerate the presence of competitors and keep the game going.
