If there was ever any lingering doubt that the bureaucrats deep inside the Trump Administration had long since lost their minds – which presupposes that they once had them in the first place – the arrest of Sino-telecom giant Huawei’s Chief Financial Officer Meng Wanzhou seals it for a certainty. There is nobody home in the White House. They’re all absolutely out of their gourds.
I can continue with superlatives all day in this case, but first down to business. Remember when Beijing arrested 18 Crown Resorts executives and sentenced one of them to 10 months in prison? Their horrible crime was advertising Crown’s gaming services. Well, the Chinese are getting a taste of their own medicine (let me be clear that this is not a good thing) as the United States had put out some kind of Interpol warrant or something against Meng, a Chinese national, travelling through Canada at the time, for the crime of doing business with Iran. Say what now? The only thing almost as crazy that I’ve seen is the Dolphins’ game-ending 69-yard desperation double lateral touchdown play against the Patriots with 7 seconds left, and even that is not as crazy as this.
I mean, what in the world is going on here? Most often it is very difficult for the average American to understand the perspective of non Americans when they say that the US bullies other countries and sticks its nose, or its fist rather, unfairly into the business of others, but in this case it’ll be hard for even the most diehard of the cult of American Exceptionalism to deny that this is really beyond the pale. What does a Chinese executive, travelling through Canada, allegedly doing business with Iran, have anything to do with the United States? And to make matters so much worse, the US Justice Department isn’t seeking some kind of 10-month slap on the wrist for Meng. They’re pushing for 30 years in prison! At 46 years old, that’s basically a life sentence for her.
My mother taught me a lot of things, but one thing she never had to teach me, thank goodness, is that when someone graciously lends you $1,165,000,000,000, you probably shouldn’t resort to kidnapping. I was raised very well, thank you very much.
That’s really what this amounts to. It’s a kidnapping for ransom dressed up in fancy statist legalistic mumbo jumbo. Meng has been kidnapped by the Trudeau Administration, at the behest of the Trump Administration, whose warhawk antitrade dignitaries seem intent to use her to extract some kind of trade concession because whatever Trump and Xi are discussing over moo goo gai pan isn’t working.
Given the timing of this, the implications for investors on this at once completely reckless and wreckful move could be huge. First of all, US-owned Macau casino executives now need to watch their backs. Everyone from Sheldon Adelson to Matt Maddox to James Murren and anyone below them in their senior staff or on their boards of directors. If Meng isn’t released, and we’re talking about Donald Trump here so it’s unlikely that he’ll back down and pardon her anytime soon or at all, then the Chinese are going to strike back at US companies at some point. They’re not going to take this sitting down. If Beijing can arrest Crown executives for the crime of advertising, they can arrest US executives for whatever they want, whatever they can think of basically, and this time they’ll be gunning for more than a 10-month slap on the wrist. They’ll treat this like a prisoner exchange, except negotiations will be done over lavish dinners in elite hotels with red carpet entrances and careful cordial-yet-strained language instead of between gritty generals over war rations in military uniforms.
Already we are getting reports that Chinese executives fear traveling through Canada now, and for good reason. Well, American executives need to fear traveling through China, or Macau. If Beijing ever wanted an excuse to engage in some serious protectionism of its own, and I mean real hard protectionism, not this wussy tit-for-tat 10% tariff nonsense, then it could make it impossible for Las Vegas Sands, or Wynn, or MGM, or any other US gambling firm planted in Macau to do business through any number of ways, buy up assets and hand them out to its own casino vassals. Trumped up money laundering charges, junket schemes, tax evasion, fraud, I could see any of those carrying a multi-year sentence and they all sound a lot worse than illegal advertising.
If that happens, does anyone expect Trump to smile and say “Well played, Xi!” No, he’ll do something even stupider and crazier, which could ultimately lead to China calling in US debt. They could do this now and destroy US finances overnight. They haven’t done it because they think it’s not in their economic interests. They’re wrong about that, but if they decide to do it anyway just for spite, then if we have a bear market now, you ain’t seen nothin’ yet.
Economic recessions beget international tensions, especially when trillions are owed between parties. I fear that now, it’s just a matter of time before we see the first headline out of the South China Morning Post that US casino executives have been corralled into some Chinese detention center and Macau stocks will have an absolute fit.
Or Trump could just say sorry, oops, and blame it on Russia, no hard feelings, and cover Meng’s ticket home. Stranger things have happened, like the Miracle in Miami.