Pepe Escobar's Long Awaited Guancha Interview

During Pepe’s talks about his recent time in China he mentioned this interview on several occasions, yet it never surfaced on any Chinese media platform. Finally, one of Guancha’s subsidiaries, Observer.com, published it and gave it this title: “Trump's crazy policies can only lead to "trade suicide", a big experiment that will affect the world is coming.” Those reading the Gym arre likely to have read Pepe’s articles during his recent China stay and will thus know that it took place about ten days ago. In the interim, little has changed. The transcript leads with an editor’s note before the interview begins:

Editor's note: Trump's 100-day shock shook the world, and a few executive orders nearly shattered decades of rules-based free trade system. This has not only led to the boiling of public opinion in the United States, but also seriously affected the expectations of countries around the world for future development. At this time, countries around the world are also looking forward to stability, and to responsible countries standing up to fight this chaotic impact.

To this end, Observer.com sat down with Pepe Escobar, a freelance journalist from Brazil, to analyze the impact of the U.S.-China tariff war from the perspective of a third-world partner and look ahead to the future of the BRICS.

Observer.com: Trump's tariff war has escalated around the world, especially with China. What aspects of the U.S.-China economic friction are you most concerned about?

Pepe Escobar: It's actually a geo-economic war against China, not against the whole world. They initially imposed tariffs on most countries and regions, but it soon became clear that the spearhead of the campaign was directed at China and that it was out of control. Tariff rates have climbed from 54 percent, 104 percent, 125 percent, 145 percent, and now even 245 percent.

Now, the tariff figures have become meaningless, because under the current tariffs, there are many areas where US-China trade would come to a near standstill. The tariff problem can no longer be solved by economic means, and can only be solved by diplomatic means. But it is simply impossible for the United States, especially Trump, to adopt normal diplomacy to solve this problem, and he is living in his own "bubble". I call him the "conductor" of the "circus", who controls the entire "circus".

We can look at China's response, and I think the statement from the Chinese Foreign Ministry is very appropriate. This series of policies of Trump is not a policy at all, but more like a fantasy.

Trump is surrounded by three people pushing for these policies: Peter Navarro, a senior trade and manufacturing adviser who is anti-China and has no knowledge of China, Stephen Millen, chairman of the president's Council of Economic Advisers, who proposed tariffs, and Scott Bessant, the anti-China hawkish Treasury secretary. It was these three people who circled around Mr. Trump, whispering to Mr. Trump, "This will work."

Now, many very good American economists are bluntly saying, "This is complete madness, and the United States has to turn the ship." But I'm afraid the Trump administration won't do that. Now this head-on conflict is on the table between China and the United States, and most countries in the world are not only morally on China's side, but also understand China's position, and their main trading partner is China. Therefore, the rash introduction of such a crazy policy by the United States in the context of not looking at the global trade pattern at all can only lead to trade suicide in the end.

This set of US policies has actually pushed the level of global confrontation to another level.

Although the new Trump administration has adopted a more or less receptive attitude towards Russia, their system will not solve the Ukrainian problem at all. And they have shown an aggressive attitude towards China and Iran at the same time. So when you put the current system of international relations in a global perspective, you will find that the balance of the international system is at both ends of the scale, with a triangular alliance of Russia, China, and Iran on one side, and an isolated superpower on the other. That's not a good thing for America, right?

Observer: From Brazil's point of view, what kind of public concern has Washington's re-imposed tariffs on steel products under Section 232 provoked public concern?

Pepe Escobar: That's a very good question. However, although I am Brazilian, I do not keep up with the domestic situation because I have been living abroad for a long time. I have lived in Europe, the United States, and Asia, and have been in Asia for the past 30 years, so my focus is mainly on the United States, Europe, and Asia as a whole, and I don't know much about the details of Brazil.

Overall, as a Brazilian, I think the geo-economic situation facing Brazil is very complex – even within Lula's government, there are quite a few officials who are outspoken against working too closely with Russia, China, and even the BRICS. But at the same time, China is Brazil's largest trading partner, far more important than the United States.

Therefore, once the United States imposes tariffs on Brazilian steel or other products, Brazil is bound to react. At the same time, the US lobby in Brazil is extremely strong, and the Lula government must make careful decisions. In any case, Brazil will almost certainly react to the U.S. tariffs.

Brazil has a strong pro-Trump camp, the Bolsonaro camp, which is naturally opposed to the Lula government, so I think Brazil has to be extra careful in its approach to the U.S.-China relationship. Fortunately, President Lula has a lot of experience in this area. However, US-Brazil relations will still face many fluctuations and challenges in the future.

Observer.com: Since taking office, Trump has been stirring up the global situation: expelling migrants, alienating European allies, cutting off military aid to Ukraine, imposing massive tariffs, and now a bitter trade war with China. As a front-line observer of the global power shift, what exactly do you think is driving this chaos? Are we witnessing the collapse of the old international order and turning to a scuffle in which countries are cleaning up their own hands?

Pepe Escobar: Indeed, we have entered a whole new era compared to three months ago. Three months ago, we could also consider countries ranging from the United States and Canada to Western and Eastern Europe as a "collective West" with a similar will; And now, a country has emerged in the West that is crude and naked in its worship of power.

It bills itself as an "empire" and sends a strong signal to the world: "You all need to do what I want, or either I will impose tariffs, or I will use force." "Other countries of the West were also placed in a vassal position. Trump and his team simply do not see Europe as valuable geopolitically, technologically, or economically. To make matters worse, Trump believes that the United States is paying for Europe's security. So he argues that from now on, if Europe needs to continue to receive U.S. protection, it will have to pay for U.S. military protection.

At the same time, on the other side of the world, there is a camp of the "Global South" consisting of the majority of the world's countries, with Russia and China as the main leaders. In this camp, China is the world's unrivaled trading power, and the strategic partnership between China and Russia is crucial. The core problem now is that the international financial system is still dominated by the West, especially the United States.

The current tension in the world is stemming from the rise of the "imperial" mentality of the United States. This is evident in the discussion of the annexation of Greenland, the annexation of Canada, and the treatment of other allies as vassals. And this rising trend of "empire" mentality is also evident in its actions against most countries around the world, especially against China.

It can be said that we are entering a new era of utter disorder, in which the so-called New World Order is essentially a chaos caused by the decline of an empire, and this irreversible decline will make the old empire even more dangerous in its end.

Observer.com: In your latest article, you wrote that "this is a chaotic empire against the BRICS", why do you describe it that way? How should we protect our interests?

Pepe Escobar: This spectacle of a "chaotic empire" against the BRICS has become more pronounced this year as the United States escalates its economic and trade war against China, as well as a potential hot war against fellow BRICS member Iran.

A few months ago, we could have summarized the US actions against the BRICS as a multi-layered "hybrid war" with "color revolutions", economic destruction, and political pressure. Today, the situation is even more complicated, with the United States engaged in a head-on confrontation with two extremely important BRICS countries, China and Iran.

There is no doubt that China is the primary target of the United States. At the same time, they are trying to use the "divide and rule" strategy of ancient Rome in an attempt to divide Russia and China, but this is not destined to succeed.

I think the BRICS summit in Rio in early July will decide a lot of things. At that meeting, the BRICS countries will decide as a whole how to unite against the runaway empire of the United States, and appeal to the "global majority" – the "Global South" – with practical policies, and try to explore multiple payment methods that bypass the dollar and try to use their own currencies more in internal trade.

It is crucial that BRICS cooperation go further. At that time, we will see how the "Empire of Chaos" and the "BRICS" will enter the next stage of this contest.

Observer.com: China's solar panel exports to Brazil will increase by 80% year-on-year in 2023, and clean energy cooperation between China and Brazil is very important for both sides. From your perspective, will the Section 301 tariffs imposed by the United States on Brazilian steel and aluminum interfere with China-Brazil clean energy cooperation?

Pepe Escobar: The core purpose of such a "crazy" tariff policy is to undermine cooperation within the BRICS. And Brazil's and China's attempts to circumvent these tariffs will also be an excellent test for countries to circumvent the dollar system. I think in this experiment, we can try to trade with currencies such as the digital yuan.

However, Brazil's central bank is currently highly aligned with the Fed, and it will not be easy to suddenly pursue a completely different monetary policy and settlement currency. It is not clear to us whether the Lula Government has the political will and capacity to launch this new process.

But if it can be successful, it will be ideal. Because the most effective way to deal with this global tariff "tsunami" is for countries to conduct bilateral trade in their own currencies, bypassing the U.S. financial channel. This will be an excellent institutional test for Brazil.

Observer.com: Brazil is sitting on a large nickel mine, but now it is caught in the crossfire of the Chinese mining deal and the Biden climate bill in the United States. And Lula's government is now at war with Washington over tariffs at the WTO. How will Brazil remain active and unsuppressed in this global game? Will Brazil be able to turn this resource duel into a battle to reclaim its technological sovereignty?

Pepe Escobar: You just mentioned a key concept-–sovereignty. That's right, it's all about sovereignty. If an emerging country like Brazil is to truly gain sovereignty, it must be free from external pressures. In fact, Brazil has been slower to strengthen its sovereignty because pressure from the United States has had a stronger impact than on Russia and China.

So, back to the tariffs: if Brazil can circumvent these tariffs by expanding its trade with its major trading partners, especially China, and bypassing dollar settlements, it will be a crucial step towards a new global geo-economic landscape. This will be a key test, as trade between ASEAN and China is increasingly settled in RMB and other local currencies, and we need to extend this to the BRICS.

Within the BRICS, a blockchain-based multilateral digital settlement platform has been theoretically proposed, the "BRICS Bridge" proposed by Russia in February 2024. Although Brazil has not yet joined the system, if successful, it will provide the possibility of bypassing the traditional monetary system altogether, especially the US dollar.

In addition, the People's Bank of China is also promoting a mechanism called "mBridge", which can also support BRICS countries in advancing related experiments. In the coming months and beyond, testing platforms such as BRICS will be crucial. Once this alternative payment system is in place, member states will be able to bypass U.S. financial controls entirely.

Observer.com: You were banned from Facebook and Twitter, what happened? What are your plans for the future?

Pepe Escobar: I was first banned from Facebook and never got unblocked. At the time, I was working with Hong Kong's Asia Times, and their lawyer sent a letter to Facebook asking for an explanation, but they never responded.

Twitter's situation was different, I was banned for my reporting on Iran and Iraq. It wasn't until Musk took over and bought Twitter that my accounts and those of some other journalists and analysts were restored. Scott Ritter (a well-known political commentator on the Internet, a former U.S. Marine Corps intelligence officer, and former U.N. arms control mission in Iraq) had the same fate as I did, and we returned to X at the same time in the same week. To say the least, Musk was concerned about Twitter's previous ban on journalists.

Observer.com: After these events, what do you think of freedom of speech in the West? On the Russia-Ukraine conflict, the trade war, and the Middle East issues that you are familiar with, how can the United States shape public opinion to create a favorable environment for itself?

Pepe Escobar: The U.S. controls the global soft power industry, and that's a big problem. What they do best, and probably the only thing they do, is to build, change, twist the narrative, and constantly push the envelope. They do this because they control global social media and discourse. It can be said that having mastered the "operating system" was precisely the great advantage of the empire.

We cannot claim that the West–-especially Europe-–truly has freedom of speech. In the United States, despite the new administration's attempts to promote that "freedom of expression on social media has been fully realized," there is still a no-go zone for speech: criticism of Israel in the United States and claims of genocide in Gaza will be banned.

The situation is even more dire in Europe, and if you criticize EU or European Commission policy, it will be seen as crossing the line. In addition, if you oppose the theory of the Russian threat and do not express an anti-Russian position, it is equally difficult to speak out, and you must condemn Russia every day. In general, the so-called "freedom of speech" in the West is nothing more than an illusion and does not exist at all. In contrast, in Asia, for example, the space for speech is much more relaxed.

Observer: Do you think countries in the Global South can use the BRICS+ mechanism to reshape the development discourse and innovate in sustainable development, technology transfer and multilateral financing paradigms?

Pepe Escobar: For all this, the BRICS itself is the best laboratory. I spent almost half a year in Moscow last year, following the preparations for the BRICS summit in Kazan last October, so I had the opportunity to interact with many members of the BRICS Business Council. They were trying to talk about different settlement and payment mechanisms, technological innovations, and artificial intelligence.

They told me that because we are a group of people sitting at the same table, all decisions need to be made by consensus, so it is complicated and difficult to reach an agreement. But on the other hand, it's unprecedented, because we're testing what's possible and exploring something completely new.

Based on this, I came up with the concept of the "Brics Lab". At the moment, the BRICS bloc is like a huge laboratory, they are already testing various economic models and technological exchanges. Maybe this year or next year, we're going to see a lot of test results.

We need to promote these policies within the BRICS member states first; If feasible, a pilot project between BRICS members and their partners will be carried out to expand cooperation to 14 to 19 countries, and then to other countries in the Global South.

We are now in a big era, because the BRICS countries may be about to advance a big experiment that will affect the world. Now, in the face of a US-sponsored trade war against most of the BRICS countries, all parties must step up and step up testing. But based on my experience with these people last year, the outlook is very optimistic, because they know that there is no choice in the future, only to develop independently. And now the trade war has added pressure and impetus to this experiment.

Now for the countries of the "Global South", whether it is technology, economics or trade, the relevant construction of the countries of the "Global South" needs to consider how to bypass the United States. Everyone knows that this is the only way out. Finally, I would like to conclude today's interview with a hopeful remark –

Although the road is dark now, we can already see the stars ahead. [Bolded Italics My Emphasis]

I found it odd that after Pepe’s disclaimer about events in Brazil that the line of questioning continued to include it which Pepe deftly dodged like some politicians. His key points were the BRICS must act and act together. Given events that happened after the interview India will be even more important because it must ignore the Outlaw US Empire’s attempt to further destabilize South Asia for it’s the only Kashmir terrorist act cui bono actor as Pakistan has nothing to gain from antagonizing both India and China. Pepe’s correct that the Empire’s declining and these acts by Trump are those the world should anticipate as it seeks to preserve its rapidly waning global hegemony. Pepe’s reports often mention China’s technological advances, but oddly there was no discussion of that. Implied by Pepe is China’s political decision to stand tall instead of bow-down relative to the Outlaw US Empire’s actions. IMO, it’s vital for China to finally become visible as the leading nation fighting Trump’s Trade War and to speak resolutely. Clearly China’s stance enabled Japanese parliamentarian Shinji Oguma to call out the Empire as “extortionist” and more. I’d like to see more of that spirit. The BRICS Summit in Brazil is only two months away and the world needs to see more China-like behavior coming from the “lab.”

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