I Am the Third-Generation Heir of a Conglomerate - Chapter 489



Only Noblemtl

489. The Time of Promise (4)

July 6, 2018.

The prelude to the US-China trade war has begun.

A few months ago, the tariffs that President Trump had been advocating since his candidacy went into effect.

“At 1:01 p.m. Korean time, a whopping 25% tariff on $34 billion worth of products went into effect!”

“They are really getting into the act of killing China.”

“The target is over 800 items, including information and communication, aerospace, and industrial machinery, that the Chinese government is pushing forward.”

It was something that was already expected.

Because President Trump himself made a speech like this.

[China is killing us. Last year alone, we had a trade deficit of over $500 billion. This is not fair free trade!]

It was very rare for an American president to make such an aggressive statement.

Many experts predicted that there would be only verbal pressure and no tariffs would be imposed.

It was a prediction made without knowing Trump’s personality.

Trump had a completely different style from previous US presidents.

He was the type of person who would do what he wanted to do no matter what criticism he might face.

“China won’t stay still either.”

“Because China had previously announced that it would raise tariffs, it is now announcing that it will impose retaliatory tariffs of 25% on items such as agricultural products and automobiles. The scale is also the same at 34 billion dollars.”

“So you’re saying you’ll hit me back as much as I’ve been hit.”

We couldn’t just take it because it was China.

Because those in power who do not retaliate cannot maintain power.

So, in order to maintain my current position, I had to show at least the will to hit back as much as I was hit.

“This is a fight that China can never back down from. The moment it backs down, it will have to withdraw the Chinese dream and the Belt and Road Initiative that it has pursued so far.”

“The market opening conditions proposed by the United States are conditions that China cannot accept.”

“Many experts in the financial tower actually see this as a war in China’s favor.”

“Is it because of the bonds?”

China held the largest amount of U.S. Treasury bonds in the world.

And the United States and China were already in a complex economic relationship that was difficult to break.

“If the U.S. continues to maintain high tariffs, China is expected to use the super-strong measure of bond sales. Then, even if it is the White House, wouldn’t it take a step back?”

“I don’t know if it would work with Korean bonds or bonds from other European countries. Would blackmail work with US bonds?”

“That’s true. In the case of US bonds, if you release them into the market, there are plenty of people who will buy them. But if hundreds of billions of dollars worth of bonds are released into the market at once, chaos will occur.”

In effect, US bonds were virtually perpetual bonds.

Because US bonds were more reliable than any bond issued by any country in the world.

In particular, financial institutions were using part of their capital to purchase U.S. bonds in accordance with their internal policies.

Even so, quantity was a problem.

If hundreds of billions of dollars in bonds were to be released all at once, it would take a long time to digest.

“I think we’ll hear from the White House soon.”

“Do you expect that there will be a request for China to accept bonds that are being thrown at the financial tower?”

“Who else can afford to swallow hundreds of billions of dollars? But we can’t ask the Saudi sovereign wealth fund for help, right?”

Even for Wall Street, it was a difficult amount to digest.

Moreover, not all financial firms on Wall Street were friendly to President Trump.

So, it was very likely that he would ask me a favor, as we had known each other since my days as a candidate.

“If the White House made such a request, would you accept it?”

“We must accept it. In return, we will receive a promise that the financial tower will not interfere in any way it can profit from this war.”

“I got a call from David today. He said he wanted to meet with the Chairman at the White House.”

“You contacted me later than I thought. I thought you would contact me before the war started. You contacted me after the war started.”

The most important thing in war was alliances.

The more countries you can recruit into your alliance, the higher your chances of victory.

Of course, Taewoo Group and Financial Tower are not a country, but they have more cash than most countries, so they had to embrace us unconditionally.

“There’s no point in wasting time. Tell them I’m going to the US this weekend. In the meantime, focus on actively realizing profits at the financial tower.”

“They are already making huge profits from short selling. Stocks of American agricultural products, automakers, and Chinese electronics companies are falling at a tremendous rate.”

The only winner of this war had to be the Taewoo Group.

Taewoo Group had to capture all the funds evaporating from the US and China.

To do that, we needed to show the White House what cards we were holding.

***

I postponed the rest of my schedule and moved to the United States.

The White House was reacting differently than before as the situation became more urgent.

Upon arrival at Washington D.C. airport, a Secret Service agent from the White House was waiting for him, allowing him to skip immigration procedures and head straight to the White House.

“Please come inside. The President is waiting.”

One-on-one meeting with President Trump.

It was a situation that every entrepreneur wanted, and despite the enormous lobbying to create such a position, it was not easy to make it happen.

But I was against it.

It was President Trump who wanted to meet, not me.

That’s why I was able to enter the office with a relaxed look on my face.

“I am honored to be invited.”

“It feels really good to see Chairman Kim again like this. From what I’ve heard, he’s been having a hard time with his schedule, even if he had ten bodies.”

Is there anyone with better intelligence than the President of the United States?

Trump seemed to know where Taewoo Group and Financial Tower were investing and what businesses they were starting.

That’s why I’ve been moving cautiously up until now.

It was also the case that the business was started only after sufficient justification had been established.

“Isn’t a company like a tuna? It can’t stop and breathe even for a moment. So it has no choice but to keep working.”

“If there is one thing that is regrettable, it is that it seems like they are reducing investment in the oil industry.”

“We have been selling our shares to build relationships with global oil companies. However, we are by no means pessimistic about the oil industry itself or intend to give up on it. Right now, we are just taking a breather before making a large-scale investment.”

Let’s start with the oil story, okay?

Alaskan oil field development project started with the assistance of the U.S. government.

The fact that we were able to see a profit of more than three times was possible because the U.S. government was firmly supporting us.

From America’s perspective, I might have seemed like a shill.

Even though I gave you so much support, you ended up selling your shares.

However, it was not a major weakness as the entire stake was not sold and the oil field development schedule was not disrupted.

“I don’t doubt your heart. Aren’t you the one who started the shale revolution?”

“That’s an exaggeration. I just made a very small investment.”

“I have no doubt about your love for America. You are one of the proud citizens of America.”

Honorary U.S. citizenship.

It was a citizenship granted by President Bush at the time of the Trade Center incident.

Thanks to this, I was able to do big business in the United States without being ostracized, but now it was trying to become a chain that held me back.

It’s my turn to be forced to feel patriotism toward an America that doesn’t even exist.

But he had no intention of simply being coerced, and was willing to pretend to be a patriot as long as he could gain some appropriate advantage.

“Is there anything I should do for America?”

“Ahem, thank you for bringing it up first. It’s just that our relationship with China is not good these days.”

“I think it is an inevitable process to achieve protectionism.”

“I believed that you would understand my feelings. It is an inevitable process, but the damage is greater than expected. In particular, the Chinese have started selling bonds on a large scale.”

It was a measure to counter the tariff bomb.

They haven’t sold bonds on a large scale yet.

It was China that was selling bonds just to protest and make people aware of how much US Treasury they own.

“China’s holdings of US Treasury bonds are substantial.”

“If they sell off a large amount of bonds, won’t the value of the dollar fall and interest rates on government bonds soar? That could have a huge impact on the United States.”

“It may be shocking right now, but it is also a quantity that can be easily digested given time.”

“Unfortunately, time is not on my side. My term is running out. But the Chinese president can still serve consecutive terms.”

Time was on America’s side.

Even if China were to sell off all its bonds, the US would not collapse.

But even if the United States did not collapse, the decline in the US President’s approval rating could not be stopped, and it was clear that it would have a negative impact on the re-election.

“The Taewoo Group and Financial Tower can make up for the lack of time.”

“As expected of you! This is the kind of answer I was hoping for. How much, and how specifically, can you fill it in?”

I extended my hand first.

The aim was to take the lead in the conversation.

“According to the Financial Tower’s estimates, the size of the bonds that China will sell will reach 300 billion dollars.”

“Hmm, so that means selling more than 20% of the bonds they own. The White House financial experts are making similar predictions. So how much can they buy?”

“If Taewoo Group moves alone, it can handle up to $150 billion. However, if it moves the financial tower as well, it can handle all $300 billion worth of bonds.”

“Are you saying that we can absorb all the bonds that China throws at us?”

President Trump smiled broadly.

That’s understandable, since China’s best card was US Treasury bonds.

I couldn’t help but smile when he said he would nullify it for me.

“But moving a financial tower is not an easy task.”

“If you step forward yourself, wouldn’t you be able to make a move? I heard that you are called a god in the financial tower.”

“It’s not like they’re gods, but they do have a strong bond. But don’t you know? Financial companies are a group that only cares about profits.”

“Are you asking for a guarantee on the yield on US bonds?”

What would be the yield on the bond?

Although it was clearly a safe investment, no one was buying US bonds in hopes of high returns.

“You can’t move them with bond yields.”

“Then what do you want?”

“We have to convince them that there is a lot of profit to be made in this trade dispute.”

“Hmm, so you’re saying that financial companies will make money from the fight between the US and China?”

“If the profits earned in this way are used to purchase US bonds, wouldn’t that be a good outcome for the US government as well?”

It would also help the US government.

It was even more helpful for President Trump, who has little time left in office.

“I understand that there are many American financial companies in the financial tower. If they profit from this incident, it would be right for the financial tower to profit.”

“I wouldn’t break the law, but I could make money in a very aggressive and ingenious way. Would I be okay with making that much money buying U.S. Treasuries?”

“Do so. Do whatever it takes to avoid offending the American people. I will make a promise to each organization.”

It was a meeting that produced results that were satisfactory to both parties.

The financial towers have acquired a sort of license to kill, and are now protected by the U.S. government no matter how they make a profit.