Geopolitcal expert Peter Zeihan was the keynote speaker for the recent California Citrus Mutual Showcase. The showcase was presented March 4 online.
Zeihan said he believes North America will recover from the economic impacts of COVID-19 this year, but the rest of the world will not. That, along with other factors, leads him to predict a trade war is inevitable, and that agriculture will be the prime target.
“If other countries want to target us in trade talks, they always go after agriculture because it’s the only point of vulnerability,” he said.
He views Europe as a key element in his prediction. “The Biden administration is actually very hostile to Europe in particular because under Barack Obama, the United States asked the Europeans for two things: troops for Afghanistan and stimulus spending to help recover from the 2007 crisis,” Zeihan said. “Europe gave nothing. Biden remembers that. And so I expect relations with the Europeans to take a very dark turn very early in Biden’s term, certainly this year.”
Zeihan believes that this will lead to a trade war. “By the time we get to the second half, where the U.S. economy is recovering, but Europe’s is not, expect that trade war.”
Relations with China are also in a major state of change. Zeihan believes things are going bad on both sides of the relationship. “On the Chinese side, we’ve seen that what economic growth they had last year wasn’t from consumption, and it really wasn’t from exports. It was from inventory build.”
He added that the Chinese know that their economic model is collapsing.
“If you’re from the outside world and you have an economic relationship with the People’s Republic, it’s time to get out,” Zeihan advised.
He also explained that long-term changes are coming to the international markets, most of which seem beneficial to citrus. “Your import-export competitors’ market is going to get a lot more simplified in the years to come. And most of the countries that are likely to be your long-term customers are looking actually pretty bright, and most of your major competitors are not,” said Zeihan.