(ZeroHedge)—It’s starting to smell like a real trade war.
Just days after the WSJ reported that Scott Bessent’s grand trade war strategy was to force more than 70 US trade partners to sign bilateral deals while aligning against China, Beijing has warned it will retaliate against countries that negotiate trade deals with the US “at the expense of China’s interests”, fueling global tensions as the world’s two economic superpowers lunge at each other over tariffs.
“China firmly opposes any party reaching a deal at the expense of China’s interests,” the ministry said on Monday. “If this happens, China will never accept it and will resolutely take countermeasures in a reciprocal manner.”
“China respects the right of all parties to resolve their economic and trade differences with the United States through equal consultations,” the commerce ministry said adding that if countries encroached on Beijing’s interests, it was “determined and capable of safeguarding its own rights”.
The ministry added that “all parties should stand on the side of fairness and justice and should defend international economic and trade rules and the multilateral trading system”.
It said: “Once international trade returns to the ‘law of the jungle’, where the strong prey on the weak, all countries will become victims.”
The statement by China’s commerce ministry, which was in response to reports that Trump’s administration planned to use trade talks with multiple countries to try to isolate China, called on them to instead join Beijing to “resist unilateral bullying.”
The sharp escalation follows the failure to gain any traction in trade and tariff negotiations. Trump has called several times for Beijing to open negotiations to avert a trade war, and China has said it is open to talks, but neither side has signalled that high-level contacts are under way.
While last week’s WSJ report said the US strategy to gang up on China was intended to pressure Beijing to come to the negotiating table and abandon its defiant stance, China has shown little sign of backing down. Instead, president Xi Jinping visited Vietnam, Malaysia and Cambodia last week, where he sought to shore up relations with Beijing’s trading partners.
South-east Asian exporters face steep tariffs under the Trump administration, which has also accused them of serving as a transshipment conduit for Chinese goods. Unfortunately for them, without the US as a final customer for most of their exports (including Chinese transshipments), and vows of solidarity will be hollow once countless Pacific rim factories go dark sparking an economic and labor crisis in countries which have virtually no social safety net.
And while China has ironically sought to portray itself as a pillar of the international trading system, it is struggling with weak domestic demand following a deep property slowdown, forcing policymakers to lean on manufacturing and exports for economic growth and leaving the economy vulnerable to the trade war with the US. As a reminder, some 40% of Chinese economic growth is in the form of trade, and while the hit to the US would be mostly along the inflationary and capital market pathways, once more than a third of China’s economy is forced to find new end markets, the pain for the domestic economic will be orders of magnitude worse.
It’s also why Goldman now expects China’s Q2 real GDP growth to collapse to 0.8% qoq ann from 4.9% in Q1.
Meanwhile, Beijing has repeatedly promised various initiatives to spur consumption but has held back from launching a “bazooka” fiscal stimulus (something it can’t do since it has hit debt saturation), instead investing heavily in industry to shake off its reliance on western technology.
Bypass Big Tech Censors
Two Storms, One Harvest
Every food crisis in living memory has been a one-shock event. The 2008 price spike was a commodity bubble. The 2020 shortages were a logistics failure. The 2022 grain scare was a war on one exporter’s ports. Each time, the system bent, adjusted, and recovered, and each time the experts assured us afterward that global markets are simply too big and too diversified to fail.
What nobody in Washington seems eager to discuss is that 2026 is shaping up to be something the modern food system has never actually faced. Two independent shocks, one climatic and one geopolitical, are converging on the same harvest cycle at the same time. Not sequentially. Simultaneously.
Start with the weather. The Pacific Ocean is currently building toward what forecasters now openly call a record event. NOAA’s Climate Prediction Center puts the odds of at least a strong El Niño near 88 percent, with roughly two in three odds it reaches “very strong” status, the tier reserved for perhaps three or four events in the entire satellite era. Every major global model now projects a median peak in Super El Niño territory, and most of them project it exceeding the 2015-16 event, which until now held the modern record. Sea surface anomalies were already brushing the super threshold in mid-July, months before these events normally peak. The atmosphere has already shifted into El Niño mode, and the event is forecast to crest in late fall and early winter.
This is not about “climate change.” It’s about the standard cycles of weather, and the cycle we’re currently in is one that has likely devastated societies in the past. We’re better prepared as a society today, but not all Americans are equally prepared.
Serious households have started doing the quiet math on their own. Grocery bills tell part of the story, and the forecast maps tell the rest, which is why long-term food storage has moved from fringe hobby to mainstream line item in the family budget, with established suppliers like Heaven’s Harvest seeing demand from people who five years ago would have rolled their eyes at the idea. That instinct is not paranoia. It is pattern recognition, and the pattern is worth walking through carefully.
Editor’s Note: Heaven’s Harvest IS a sponsor, but the warnings of this article are real and would be written even if we didn’t have a survival food sponsor. With that said, those who take advantage of what they offer can use promo code “Patriot” for 15% off.
The Fertilizer Clock Is Already Running
While the Pacific warms, the second shock has been unfolding in the Strait of Hormuz. The conflict with Iran turned the world’s most important energy chokepoint into a contested waterway, and the consequences reach far beyond the gas pump. Roughly a third of global fertilizer trade moves through Hormuz, and the disruption sent urea prices up 86 percent year over year by March, with a 53 percent jump in a single month.
The World Bank projects energy prices rising about 24 percent in 2026 and fertilizer about 31 percent. By its own accounting, fertilizer prices ran 35 percent higher in the first five months of this year than the same period last year.
Here is the mechanism the nightly news will not explain. Fertilizer is not a grocery item. It is a time-delayed input. The nitrogen a farmer in Iowa or Punjab could not afford to apply this spring does not show up as a problem this spring. It shows up as a thinner harvest six to twelve months later.
The World Bank’s own food security brief concedes that the effects of reduced applications earlier this season “are likely to become visible only later in harvest outcomes.” Translate that from institutional language into plain English and it means this. The damage is already done, it is already in the ground, and we are simply waiting for it to arrive on the shelf.
Now check the calendar. Six to twelve months from the spring planting season lands us squarely in late 2026 and early 2027. Which is precisely when the strongest El Niño in the instrumental record is forecast to peak, bringing its signature droughts to Southeast Asia, Australia, southern Africa, northern Brazil, and South Asia, the very regions that grow the world’s rice, sugar, and oilseeds.
The World Bank warns openly that a strong El Niño “could disrupt multiple crop belts simultaneously” on top of the conflict-driven input costs. Their baseline projection assumes the Middle East disruptions ease by autumn. What in the last two years of Middle East history suggests that assumption is safe?
The System Has No Slack Left
The comfortable answer is that global markets always adjust. But adjustment requires slack, and the slack is gone. Global cereal production is expected to decline from last year’s records even before El Niño does its work. The UN World Food Programme, hardly a den of right-wing preppers, is calling this the most significant disruption to its supply chains since Covid and the invasion of Ukraine, and its supply chain director put the stakes bluntly.
Today’s supply chain challenges are tomorrow’s hunger crisis.
There is also a political dimension that markets cannot price. When food gets scarce, governments do not behave like economists. They behave like politicians. Export bans, hoarding mandates, and panic buying at the national level turned the modest rice shortfall of 2008 into a global crisis, and analysts are already warning that import-dependent nations are the first dominoes.
The 2015-16 Super El Niño, a far weaker event than what is now forecast, threw tens of millions into food stress across Africa and Asia. This one is projected to be stronger, and it arrives with fertilizer already rationed by price and shipping lanes already contested by missiles.
What Joseph Knew
Scripture does not treat preparation for lean years as faithlessness. It treats it as wisdom delivered in advance to those willing to act on it.
Behold, there come seven years of great plenty throughout all the land of Egypt: And there shall arise after them seven years of famine; and all the plenty shall be forgotten in the land of Egypt.
Joseph did not respond to that warning with a hashtag or a committee. He stored grain during the years of abundance, and when the famine came, Egypt stood while its neighbors begged. The lesson is not that famine is certain. It is that the time to prepare is precisely when preparation still looks optional.
Nobody who filled a pantry in a year of plenty has ever regretted it, and nobody standing in an empty aisle has ever been glad he waited for certainty.
None of this calls for panic, and panic is the enemy of sound judgment anyway. It calls for the same unglamorous prudence our grandparents considered ordinary. Keep some cash margin, know your local growers, and put real food in deep storage while it is cheap and available, because the entire arc of this story is that cheap and available is a closing window.
Families looking for a straightforward place to start can visit Heaven’s Harvest and use promo code Patriot for 15 percent off long-term storable food. The forecasts may yet soften, the strait may yet reopen, and we should pray they do. But hope is a fine thing to hold and a foolish thing to eat.