we are less than 5 weeks away from Donald Trump beginning his second term in the white house but already the trade war between the US and China has taken a dangerous turn that could have devastating effects on the entire world economy you see the US China relationship doesn't just affect these two countries it affects every nation in the world and while many westerners assume China is in a position of weakness China actually has a secret weapon that could change everything now I know Donald Trump talks a big game he has made some aggressive claims boasting that he will come into office and slam China with tariffs that could reach up to 100% but the US is in an interesting position on one hand Republican Senators like Marco Rubio Josh Holly and Tom Cotton all of whom are aggressive China Hawks are threatening to kick China out of the World Trade Organization by the Republicans and the United States for that matter have several conflicts of interest just take for example one of Trump's closest friends and allies Elon Musk who is directly connected to China Elon has a tremendously close relationship with the Chinese government as 55% of all Teslas in the world are manufactured in the Shanghai gigafactory Tesla needs China to manufacture its cars but it also needs the Chinese market to buy them as the country has become the world leader in EV sales in today's video we're doing a deep dive into everything you need to know about the upcoming US China trade war and reveal how China is actually in a much stronger position than you probably think let's start today's analysis in Europe where a recent report from Bloomberg highlights what happens when Western companies try to cut off ties with China Europe's big battery Ambitions are failing and China is benefiting this is actually a fascinating story because Europe wanted to cut off their dependence on Chinese Battery Technology by building their own factories Swedish Company North vaal AB emerged as a promising startup and received Financial backing from both Volkswagen and BMW the company was off to an incredible start receiving $55 billion worth of orders but then something remarkable happened in June BMW canel a 2 billion Euro order due to Quality problems 3 months later Northolt laid off 20% of its Workforce and just last month the company filed for chapter 11 bankruptcy protection in the US Fallout is spreading across the region as local European manufacturers struggle to master the technology the most shocking stamp from this story is this 11 of the planned 16 European Le battery factories have been delayed or cancelled the simple reality is that Chinese companies like catl and byd have a yearslong technology Head Start and are selling batteries at unbeatable prices once again let's separate facts from emotion as much as Europe wants to develop its own battery factories China supplies 80% of the world's lithium ion batteries and is home to six of the world's 10 largest e battery makers this absolutely should be a caution Tale To Us politicians like Rubio and cotton who believe the US can easily decouple from China and relocate manufacturing back to the United States this is why I don't pay attention to the words of politicians who will say anything needed to steer emotions and get votes when you look at the real world and how businesses are working with China you'll see how smart companies like stellantis the parent company of 14 International car brands including Chrysler Dodge Fiat and Maserati just signed a 4 .1 billion Euro deal with China's catl to joint venture an EV battery plant in Spain this is how Europe is going to win in the long term seeking collaborations and investing for the future take a look at this chart and the data is undeniable European lead battery factories have over $33 billion in projects that have been cancelled or delayed on the flip side the majority of projects led by China and Korea are on track and ready to produce now you might be thinking to yourself okay so China dominates the EV battery sector but who cares maybe you don't like EVs and you think the technology is overrated but what about the key industries that really affect the global supply chain interesting enough this is exactly where China's secret weapon lies the New York Times broke this article last week entitled China's critical minerals embargo is even tougher than expected and this is the story that should catch everyone's attention after Donald Trump won the election in November the US government announced new new economic sanctions on no less than 140 Chinese microchip companies it's no secret that microchips are at the center of every piece of modern technology for years the United States has sought to cut off China's access to the world's most advanced microchips but this round of tariffs has caused the Chinese government to respond with its own round of sanctions we are now seeing a preview of what most likely is to be a continued escalation between the US and China once Trump resumes office China is now restricting the export of gallium geranium and antimony to the United States market and these are all critical Rare Earth minerals needed for the production of aircraft radar and high-tech weapons Bloomberg published a report just last month that published the results of a Declassified Pentagon study on the F35 fighter jet it highlights major security Wows for America's costliest weapon the United States has always pried itself on an impressive military and it should as the US spends more on its military than the next 10 Nations combined but this new report gives a devastating outlook for the future of America's most expensive military weapon the article warns the Trump Administration should bear in mind we've been flying the F-35 for 18 years and we still can't maintain it keep its stealth skin intact or shoot its gun straight there were times when the planned aircraft were not available because required repairs had not been completed or because spare parts were not available at other times aircraft had failures after takeoff before planed tests could even begin once again this is a major red flag for the US government who has allocated an astronomical $ 1.8 trillion that's trillion with a t on its F35 fighter jet program but like I mentioned at the start of the video China has a secret weapon as the production of F-35 fighter jets requires a large amount of rare Earth Resources these resources are used to manufacture the fighter jets stealth Coatings and key components of their radar systems once China cuts off the supply of rare Earth Resources to the United States it will significantly impact the US government's mass production of F-35 fighter jets now you might be thinking to yourself okay so China is engaging in a tit fortat trade War the US cut off their access to Advanced microchips and in return China is now limiting its export of rare earth materials isn't the easiest solution here to Simply Source these Rare Earth minerals from other countries of course that would make major sense but there is one major problem take a look at this map that show shows the world reserves of rare earth minerals China once again is the industry leader accounting for More than 70% of the world's total exports now the United States certainly has a domestic supply of rare Earth Resources but mining these rare Earths is a complicated process that requires an extensive industrial supply chain and once again this is China's competitive Advantage it has the infrastructure Manpower engineering capacity and Technology needed to dominate the supply chain and it's not something the US can replicate or even begin to produce anytime soon Rare Earth minerals are used in countless products today and like so many other Industries China Remains the key player for the foreseeable future but here is where things get very interesting president alike Donald Trump is taking over a nation that is largely divided and pessimistic about the future according to a Gallup poll from October 2024 52% of Americans said their families were worse off than 4 years ago while an NBC National news poll in September found that 65% of Americans said the country is on the wrong track the American political system fails to represent the true interest of the average American voter and let's not forget it was the middle class Americans who came out in large numbers to vote for his second Donald Trump presidency on the campaign Trail and during his first term in office Trump blamed China and migrants for low working class wages and wasteful government spending this was an effective message for Trump to win both the 2016 and 2024 elections but it will not deliver the promised results for workers in the long run manufacturing jobs will not return in large numbers from China since they never went in large numbers to China in the first place deportations of illegal workers will also do nothing to raise the living standards of average Americans the cold hard truth is that America needs to invest in Innovation much like the Chinese have done over the past few decades When Donald Trump and the US government launched this trade war against China its goal was to stop the rise of China and contain China's growth the US believed cutting off China's access to the world's most advanced microchips would accomplish this goal but overnight China got to work and invested billions in its domestic tech industry the best case study to examine is the story of Huawei China's most advanced tech company this summer The Wall Street Journal documented huawei's incredible recovery from us sanctions in this article entitled the US wanted to knock down Huawei it's only getting stronger honestly this is one of the most underrated Tech stories of 2024 many industry experts believe Huawei wouldn't be able to survive us sanctions but earlier last month the company launched its most advanced smartphone the Huawei mate 70 and here is the incredible stat 100% of the phone's components were sourced from domestic manufacturers and suppliers in China the United States goal should not be to stop or limit China's Innovation but instead spur their own I mentioned Trump's close friend Elon Musk earlier for a specific reason Elon is one of the most incredible entrepreneurs in history and he has succeeded in Innovation beyond the wildest expectations unlike the hardcore Republicans who want to decouple and move away from China Elon has been bullish about innovating with the Chinese and his strategy has propelled him to becoming the richest man in the world moving forward musk and his colleagues know better than anyone that Ai and the new digital Technologies can usher in an eror of lowcost zeroc carbon energy lowcost healthare lowcost higher education and lowcost electricity powered Mobility all of these combined can raise the living standards of all workers and once again this is exactly what we are witnessing inside of China and now some of America's brightest Minds in the tech industry are finally starting to speak out last month former Google CEO Eric Schmidt said the US now Trails China in AI development speaking at Harvard University Schmidt went on to say when you write the successor to your book you're going to add a chapter of how we screwed up in this area part of China's strategy is to essentially subsidize they overinvestment office but now I want to continue examining the development of AI and switch to the investing portion of today's video and tell you about a company that is making incredible strides in the most important industry for the future of our world it's no secret that AI is going to dominate the future and to be honest it's already changing the world faster than anyone predicted when we look at the US China rivalry for example AI is at the center of this relationship and you simply need to look at a company like Nvidia to see how much profit and long-term potential there is with AI today's video sponsor is poet Technologies which trades on the nasc under the symbol p o e t i want you to take a look at the stock chart over the past year and notice notice how the stock has been trading around $1 for most of the first quarter of 2024 before breaking out year to date the stock is now up over 40% but here is the amazing thing the original thesis for why to invest in poet has only gotten much stronger making it still very much an under the radar Value stock I like poet Technologies for many reasons but probably the biggest is that poet sells its products to the companies who partner with the largest players in AI including Nvidia Amazon on web services and Google poet has created a platform technology that is designed to solve the data bottlenecks and latency issues that plague data centers and AI networking ecosystems their products help reduce labor cost and assembly line time because unlike their competitors who use conventional copper wires to connect between Optical and electrical components poet's Optical interposer technology uses the power of lasers and light to make direct high-speed connections between electrical and Optical components this significantly improves performance and reduces assembly cost this is an absolute GameChanger in the microchip industry because traditional copper wires are both pricey and limited in how much data they can efficiently move even Nvidia America's most powerful Ai and microchip company has stated their goal of moving away from copper wire in part because of the heat issues caused by electrical connections poit solves that paino for the industry and uses best of breed components like Mitsubishi lasers to ensure top performance the company has won three awards for its AI Innovations in just the last 6 months but here is where the story gets really interesting and where there is a massive potential upside in the future in September poet announced that it will co-develop with Mitsubishi Electric a 3.2 terbit per second Optical transceiver when completed this will be a massive game changer for the industry because right now the industry is only operating at 800 gabyt per second speed other companies are beginning to develop technology that will grow to 1.6 terabits per second but at 3.2 terabits poet will have a product that is a generational leap ahead of others this gives poet a massive competitive Advantage because customers can work with poet at speeds of 800 gigs or 1.6 terabits and when the market is ready for 3.2 their ecosystem is ready to go among those current customers are two major names Lux share Tech and foxcon internet technology Lux share Tech makes the iPhone for Apple and earlier this year announced that it was expanding its relationship with Poet by integrating poet's Optical engines directly into existing Lux share Tech products that are already on the market this is an excellent validation of poet's technology as Lux share is a massive company that earlier this year announced it has officially entered into nvidia's supply chain do you remember what I said earlier I love poet Technologies because it sells products to the companies who are selling their products to companies like Nvidia this stock gives you access to the microchip and AI industries by working down the supply chain and investing in the companies who are helping the Nvidia and Amazon web services change the world to give you a picture of how big this Market is NVIDIA recently announced that it will be investing up to $300 billion into AI data centers data centers are the future of the industry and think about how efficient these data centers can operate with advanced technology using lasers photonics and Light as compared to Copper wiring the global artificial intelligence Market is expected to grow by almost 12x in size over the next 8 years which is a massive compound annual growth rate of 37% an AI is expected to be a 2.75 trillion Market by 2032 but here's the amazing thing about 20% of that massive Market estimate is just the hardware infrastructure to support it once again this is a major reason I love the story of poet Technologies poet is a hardware company that is producing the technology needed to power the future of AI the company has no debt and approximately $60 million Us in the bank and is burning through about $1.3 million per month so it has a long Runway and is on track for commercial success in 20125 so if you are bullish about Ai and want to learn more about this industry and the potential with poet Technologies I'm going to list their stock symbol website and investor presentation down in the video description for your full reference as always please do your own research before making any Investments and I want to thank you all for your continued support I like forward to seeing you all in our next video soon