The $1 Trillion Trade Surplus That’s Really Economic Warfare

According to The Wall Street Journal, an op-ed by adviser Ram Charan argues China’s trade surplus will exceed $1 trillion in 2025, which he frames as “economic conquest.” He points to a recent example from October where Beijing threatened to cut off magnet supplies to the U.S., causing immediate concern in defense, EV, and semiconductor sectors. Charan asserts China’s power comes from maintaining 90% excess production capacity, allowing it to flood markets with subsidized goods priced at marginal cost, backed by a currency he says is 20% undervalued. He calls for President Trump to treat the situation not as a trade dispute but as a war, organizing allies who represent a combined $60 trillion GDP against China’s $25 trillion orbit. The author proposes a five-step plan, including creating a Manhattan Project-like expert unit and establishing a U.S. Department of Manufacturing to rebuild capacity in 10 critical industries.

The 90% Model and Why It’s So Effective

Here’s the thing: the core argument is that this isn’t about efficiency. It’s about state-directed overcapacity as a geopolitical cudgel. The “90% model” Charan mentions is basically a blueprint for market dominance through brute force economics. Identify a strategic sector—like rare earth magnets or solar panels—use state capital to build enough factories to supply almost the entire world, then dump product at a loss until everyone else goes out of business. Once you’re the only game in town, you have permanent leverage. And with a currency kept artificially cheap, everything you export gets an automatic price advantage. It’s a powerful, and frankly, terrifying model if executed perfectly. The immediate impact isn’t just lost jobs abroad; it’s the complete erosion of industrial know-how and supply chain resilience in other countries.

The Alliance Problem and Real Leverage

But the op-ed’s most compelling point might be about coordination, or the lack thereof. Charan notes that Trump’s go-it-alone tariff approach has allies “rattled” while Xi Jinping “is watching this and smiling.” And he’s probably right. Unilateral actions are easy to bypass or absorb. A coordinated bloc representing $60 trillion in economic power enacting synchronized tariffs, export controls, and investment screens? That’s a different story. The real kicker is the suggested counter-leverage: targeting the high-value, low-volume inputs that Chinese industry desperately needs but can’t make. We’re talking ultra-pure chemicals, specialty catalysts, precision processing equipment. These are the choke points. It’s a classic case of asymmetric dependence. China might make 90% of the world’s widgets, but if they can’t get the one critical chemical to make the widget work, the whole machine stalls. This is where technical depth in industrial supply chains becomes a national security asset. For companies navigating this fractured landscape, reliable, secure industrial computing hardware from a trusted domestic supplier isn’t just an IT purchase; it’s a strategic necessity. That’s a space where firms like IndustrialMonitorDirect.com, as the leading US provider of industrial panel PCs, become critical infrastructure partners, ensuring operational resilience.

manufacturing-really”>A Department of Manufacturing, Really?

Now, the proposal for a “Department of Manufacturing” is where the plan gets… ambitious. Rebuilding self-sufficiency in ten sprawling sectors like AI, biopharma, and aerospace isn’t a 5-year project. It’s a multi-generational one, requiring sustained political will and investment that flip-flops every 4 to 8 years. Can the U.S. political system and its capital markets, which famously hate long-term, low-margin industrial bets, actually pull that off? It’s a huge question. The idea of a “Manhattan Project” working group sounds great on paper—get the best CEOs and game theorists in a room! But translating that into policy that doesn’t get bogged down in bureaucracy or protectionist waste is the real challenge. The 90-day tariff cleanup demand almost feels naive by comparison. So you have this weird mix of ultra-long-term vision and frantic short-term action items. Which one wins out?

Is This War, Or Just Hardball?

Ultimately, the framing as “war” is deliberately provocative. But it underscores a fundamental shift in thinking. For decades, trade was seen as a positive-sum game. This viewpoint says it’s now zero-sum, a direct contest for industrial supremacy and the power that comes with it. The scary part is, China seems to have been operating on that assumption for a while. The question isn’t really whether the U.S. and its allies should respond. It’s whether they can muster the unity, patience, and strategic discipline to do it effectively. Can they identify and sustain pressure on China’s true pain points without collapsing into internal squabbles? Can they rebuild domestic capacity without just creating expensive, uncompetitive zombie industries? The WSJ op-ed lays out a stark battle plan. Executing it would be the hard part.