Tariffs, Chickens and White Reasoning
NOTE: If you don't have time to read the full article, you can access the summary at the end.
One of the most significant economic news stories of the year (through April 2025) has been the Trump administration's imposition of tariffs on a large number of countries, especially China.
However, as media-driven as these actions by the current United States government may seem, they are just another piece of the economic dominoes that have been in the making for decades.
Tariffs
The tariffs in question are taxes on goods imported into the United States, which de facto make it unviable for US importers to purchase goods at low prices, while leaving many companies around the world with overcapacity due to the loss of their largest export market.
In return, several countries have imposed tariffs on US products or even banned their imports.
This is already generating a trade rebalancing and a weakening of logistics and production networks globally, requiring that areas that previously imported goods must now begin to produce them, and areas that previously produced goods must now reduce their installed capacity.
The medium-term consequences remain to be seen, but it is very likely that the countries affected by the loss of market share will enter some type of crisis or at least see their annual GDP decline significantly.
Thousands of people will lose their jobs and hundreds of businesses will go bankrupt in the most affected countries.
Eventually, a balance will be reached that allows trade under new rules, or perhaps the rules on each side will be adjusted to reach a beneficial agreement, until we adapt to the situation, and it will all be remembered only as an economic anecdote.
Or perhaps not.
The lost capacities due to tariff restrictions will entail a cost: higher prices for some important goods, such as food.
I mention food because if in the near future the price of Chinese cars falls and that of American cars rises, it won't affect me as much (living outside the US); I can decide to change or keep my current car for a while longer.
But if food commodities such as rice, wheat, barley, soybeans, coffee, canola, and others lose market share today, they will likely reduce their planted hectares and therefore raise their prices in the future due to lower stocks.
It's important to remember that commodities are priced globally, and what happens to rice in Asia will impact its price in the rest of the world.
If China (a major grain importer) continues the trend of blocking its US suppliers (1) and redirecting its food purchases to third countries, this new demand could lead to shortages in certain areas of the world and a very noticeable price increase.
Here are two factors that could drive up food prices: the reduced amount of planted hectares due to tariff blockades and China's increased demand in new areas of the planet.
Trump's (Supposed) Master Plan
Trump's tariff policies would only be a tactic to take control of an event that is already happening anyway: the decline of the US dollar's status as the world's reserve currency, whose life cycle would be entering what I have called the "Economic Winter" (2).
This event could be very chaotic for the financial world and for fiat currencies, that is, all of them.
The United States will not lose its status as the world's leading superpower, nor will it allow the dollar to cease to be the world's reserve currency, at least without fighting on all fronts.
The reserve currency before the dollar was the pound sterling, and a world war was necessary to end its reign. Something similar could happen this time; let the reader understand the implications (3).
What we would be witnessing would be a crisis of Western capitalism due to excessive debt (4) and the possible subsequent birth of another model that will govern us for years to come.
By order of then-President Richard Nixon, since August 1971, the US dollar has been free to print in astronomical quantities, adding a gigantic amount of debt to the world market, which has simultaneously allowed all economies to float on newly created debt.
If everything follows the prevailing economic guidelines, towards the end of the current cycle we could see the largest money printing in history, since adding liquidity to the market is one of the greatest tools the world's central banks have to try to control a crisis (5).
If Trump's plan (as I assume) goes according to plan, the US dollar would be one of the last surviving fiat currencies before the economic model changes.
During this supposed future crisis, much of the world's wealth would flow to stronger currencies, such as the euro and the dollar (as well as other assets such as gold, silver, and Bitcoin), but the euro, second in the race for devaluation, will reveal its structural weaknesses, and ultimately trillions of euros in assets will flee to the dollar in search of refuge.
This could cause the dollar to appreciate significantly in the medium term relative to all other surviving currencies, while local currencies languish in comparison.
The final actions of the world's central banks could generate more debt and inflation by diluting the value of their respective currencies, until the devaluation of almost all currencies, stocks, derivatives, and other financial assets ultimately generates massive inflation or even a Weimar-like hyperinflation (6).
The economic shift could bring about a new monetary standard, backed by commodities, with a basket of different types of assets, or with some type of cryptocurrency taking center stage.
Economy, War, Climate, Volcanoes and Chickens
Ordinary people like you and me have no say in the ultimate outcome of this tariff war created by Trump and what nations do to defend themselves against it.
The actions of economic powers and countries' central banks are too distant to understand. Therefore, it's logical that we ignore these matters, returning to our daily immediacy.
However, the medium-term effects of the tariff war could be worrisome, if it leads to high inflation or hyperinflation.
But, as I mentioned, it's likely that the parties involved will reach some kind of agreement within the next few months, and then everyone would be fine, right?
Yes, unless you want scrambled eggs for breakfast. In that case, the news aren't good.
H5N1 avian flu has made headlines in recent weeks, resulting in huge losses for US producers, who have had to cull millions of egg-producing poultry in an attempt to contain outbreaks of the infamous bug.
These viruses have a nasty tendency to spread to distant locations without warning, so what has happened in the US has also been replicated in other parts of the world (7).
Nothing indicates that this outbreak will abate for now, so egg shortages are occurring in various regions, which is contributing to their high price.
It's worth mentioning that chicken eggs are one of the most complete and accessible sources of protein available.
The eventual global egg shortage will inevitably impact malnutrition rates in the poorest countries.
As I mentioned in a previous article (8), several factors have kept food production under pressure since the COVID pandemic. These factors have not gone away; rather, they have been compounded by monetary inflation and avian flu.
According to my analysis, food distribution logistics have been failing since the pandemic due to several factors:
- Russia's war with Ukraine, which (before the war) were among the three largest exporters of wheat, barley, corn, canola and canola oil, sunflower seeds, and sunflower oil, and among the largest exporters of fertilizers such as nitrogen, potassium, and phosphorus.
- At the beginning of this conflict, several nations initiated policies that can be described as food nationalism to prevent rising food prices and ensure domestic availability by prohibiting the export of locally produced food. This situation could be repeated and spread to other places if wars intensify.
- Energy has always been a factor in increasing food prices, and after the conflict in Ukraine, prices have largely remained high. In other parts of the Middle East, conflicts have forced oil tankers to reduce their traffic or change their routes. Agriculture is a major consumer of fuel, from the harvester in the field to the trucks used for transport. A significant increase in fuel prices would inevitably be passed on to food prices.
- Environmental policies are demanding a reduction in fertilizer use, which in turn reduces production per hectare, generating an economic impact that not all agricultural producers can afford.
- The change in weather patterns has become more evident, with more extreme storms and droughts occurring in increasingly unexpected places. The infamous "DANA" storm in Valencia in late 2024 demonstrates the impact on people, but also on crops, flooding more than 25,000 hectares of agricultural land and destroying thousands of greenhouses.
- The January 2022 eruption of the Hunga Tonga-Hunga Ha'apai volcano has recently been classified as "one of the most explosive volcanic events of the modern era" (9). What few mention is that this event injected nearly 14% more moisture into the atmosphere, leading to more intense storms and greater flooding globally, changing water patterns and affecting crops.
White Reasoning
After a quick analysis with ChatGPT, I learned that for only 25 of the last 100 years has the world been free of a major war, meaning that for 75% of the last hundred years, there has been a war somewhere in the world.
This allows us to infer that war is more likely than peace in this world.
Of course, there are areas more affected than others, where conflict is a part of everyday life, so to speak.
Perhaps you and I are lucky enough to live in an area without war, or where the effects of war do not reach us, which is something for which we should thank God.
But a big change could occur in this situation if a war ever breaks out between parties possessing nuclear weapons. Even if they are very far away, their effects can be felt around the globe.
I'm not just referring to the radioactive particles generated by a nuclear explosion, which in itself affects distant areas downwind.
I'm referring more to the economic effects that a war of this nature can generate, since once one of the parties uses a nuclear weapon against an enemy with similar weapons, it's likely that the enemy will respond in kind, creating an escalation.
This would lead to logistical chaos, in addition to stock market panic and market collapse.
The great political and military leaders of the world's nuclear powers are supposed to have the capacity to resolve their problems through diplomatic means or peaceful demonstrations of force.
However, Russia is confronting the NATO powers of the United States, the United Kingdom, and France, via Ukraine; Iran and Israel threaten each other almost daily, and Iran promises to attack the United States if it gets involved; China is confronting the United States over possession of Taiwan; North Korea keeps boasting about its missiles; and more recently, just a few days ago, India and Pakistan began threatening each other in an ever-increasing escalation. The latter have gone to war in the past and could do so again.
If you read the previous paragraph carefully, as of this writing, of the ten existing nuclear powers (including Iran as a candidate), all of them are in a warlike posture.
This is a very bad sign.
There's a chance the world is entering waters it can't easily escape, and it seems no one is interested in preventing it.
Our distraction is the same as always, plus the added threat of climate disasters here and there, rising crime, and the election of a new pope in Rome.
We're not reacting because we're not understanding; we're entering a phase I call "White Reasoning" (10), due to an excess of inputs that saturates our senses and leaves us unable to draw meaningful conclusions that move us to action.
There's a vast media machine designed to capture the public's attention and keep them entertained, which in this case is equivalent to distracted.
Reality Rhymes
Little by little, the facts are impacting people's minds, and they are awakening to reality.
Just a few weeks ago, mockery and memes were increasing on social media over the presentation of the three-day emergency kit recommended by the European Union for its citizens (11).
Just a few days later, the widespread blackout across the Iberian Peninsula caused those same people who had laughed at the idea of having an emergency kit to stand in long lines trying to obtain flashlights, batteries, food, water, and other essential items, trying to pay for them with an unusable credit card.
Reality sometimes rhymes, and on this occasion, the term "preparation" rhymed with reason, and "emergency" with conscience.
Let's not allow prejudice and the bias of normalcy to keep us absorbed in the face of a possible change in the common ways of our complacent society.
Taking the Spoon by the Handle
Given the above, it can be reasonably argued that there are various threats to the international availability of food.
The causes are not only Trump's tariffs, but a series of events that are affecting food production, logistics, and prices.
The alignment of these threats has taken years, but the trigger for a drastic price increase can be swift.
Given this, I suggest taking the whole thing by the horns, or rather, the spoon by the handle.
If you are a middle-income person, buying gold, silver, stocks, real estate, or bitcoin is definitely not an option.
Your preparation must focus on learning, incremental stockpiling, and situational awareness.
If you own a field where you can plant, you'd be much more relieved when food prices skyrocket. However, you should be familiar with the planting and harvesting cycles. This knowledge is available almost free on the internet. Look it up and study it.
If you live in a city with limited space, you can now seek out knowledge that allows you to plant and harvest food in small spaces, such as urban gardens. There are small groups that do this in almost every city. Find an easily accessible group and join them to begin your learning journey.
If your living space is truly limited, I suggest making sure you have a more robust pantry of staple foods that you and your family can depend on for at least a few months. Learn about long-lasting foods, whether canned or bagged, and how to protect them to make them last longer.
Take care when storing food at home for a long time, ensuring that it cannot be lost due to improper storage. This information is also freely available online.
There's nothing more frustrating than storing food only to find it infested with insects, eaten by rodents, or damp and moldy.
You don't have to go crazy buying canned goods, but it would be prudent to allocate a percentage of your monthly purchases to properly store and expand your pantry.
Protect Your Wealth
The possibility of a major economic crisis affecting the entire world is hard to believe, but not impossible.
Over the months, we'll see the results of the tariff war and how the effects on countries' economies are developing.
Perhaps things will settle down and this new economy will find a sweet spot, for example for producers in emerging countries who see China as a gigantic new market.
However, every change can have its impact.
What we are witnessing in the economy is unprecedented and of global proportions. Don't take it for granted.
Those with sufficient foresight can take the necessary precautions to avoid falling victim to the change process.
It is not my intention to give financial advice, but the simplest thing I can suggest for the coming months is to avoid long-term debt and, above all, to have access to a reserve source of food, in any of the ways already discussed.
Don't Forget to Feed Your Spirit
One last important piece of advice to consider is that when we talk about wealth, we are not just talking about money or possessions. Wealth for a person should be expressed in all its aspects: physical, mental, and spiritual.
As a Christian author, I think everyone should place their faith in Jesus Christ, as indicated by the stories of so many prophets and faithful followers of Christ in the Bible, who went through difficult episodes that changed their times and their lives.
When there's plenty, it's easy to appear kind and collected, but when times get tough, only those with poise and spiritual wisdom maintain their true selves.
Blessings,
Luis Leighton
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SUMMARY
1. The tariff war could trigger a rise in food prices in the medium term.
2. We are about to enter a currency crisis that has been brewing for decades. This crisis could cause significant price inflation.
3. Other factors jeopardize the food supply, such as avian flu, access to cheap energy, new environmental policies, and extreme weather.
4. The economic and political domino effect could collapse due to a war between nuclear powers.
5. The recent blackout in the Iberian Peninsula highlights that things that can fail will eventually do so.
6. People must take action if they understand the times we are living in and be concerned about the future food security of their families.
7. When we talk about wealth, we are not just talking about money or possessions. Wealth for a person should be expressed in all areas: physical, mental, and spiritual.
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Quotes:
(3) https://www.linkedin.com/pulse/el-elefante-silencioso-luis-leighton-carvajal--iivcf/
(4) https://www.linkedin.com/pulse/occidente-del-capitalismo-al-creditismo-y-defaultismo-luis/
(5) https://fred.stlouisfed.org/series/BOGMBASE
(7) https://news.un.org/es/story/2024/12/1535186
(8) https://www.linkedin.com/pulse/e-ayuno-intermitente-2023-2026-luis-leighton-carvajal-/
(9) https://en.wikipedia.org/wiki/2022_Hunga_Tonga%E2%80%93Hunga_Ha%CA%BBapai_eruption_and_tsunami
(10) https://www.linkedin.com/pulse/ruido-blanco-y-oidos-sordos-luis-leighton-carvajal-/
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