[1.5s - 8.3s] Good morning. China has decoupled from the United States for agricultural products, which
[8.3s - 15.3s] is herding American farmers who were dependent on exports to China, but who is now well supplied
[15.3s - 22.5s] by Brazil and Russia. We're seeing the same decoupling in energy, and China has developed
[22.5s - 29.1s] new sources of supply from Russia and Iran. That's what we believe anyway. This is from
[29.1s - 36.4s] April. Propane is liquefied petroleum gas, and China used to be one of the biggest buyers of
[36.4s - 46.7s] U.S. propane after Japan. Suddenly, China stopped buying it, and the price collapsed by over 30%
[46.7s - 55.1s] in a single month. This had been an important export for American energy producers, especially in
[55.4s - 62.8s] the tailpatch. And China was a huge buyer of propane and other LPG, especially for its plastics
[62.8s - 73.5s] industry. The bilateral trade in LPG was running about $1 billion a month, and 60% of China's LPG
[73.5s - 81.0s] was U.S. sourced. But then the tariffs came from both sides. At the time, the retaliatory tariffs
[81.0s - 89.4s] on U.S. exports to China were 125%. Those did not last long, but it was long enough.
[90.1s - 95.6s] Chinese buyers rushed to find other sources, and they found them. They found other suppliers
[95.6s - 105.6s] elsewhere. Chinese plants stood to lose $770 a ton on American propane, but by switching to
[105.6s - 112.2s] Middle East suppliers, they could stay in business. So much of the trade today between China and its
[112.2s - 119.4s] trading partners is outside Western systems. And so we can only guess how China's demand is being
[119.4s - 127.2s] met and by whom and at what prices. We do know that the U.S. was China's biggest supplier of propane,
[127.8s - 134.8s] then suddenly China wasn't buying any at all. We can safely assume that Iran stepped up,
[134.8s - 142.0s] because the April-May period earlier this year saw liquefied propane as Tehran's largest
[142.0s - 150.2s] non-oil export. American policymakers also assume that and have taken massive action
[150.2s - 158.7s] against Iranian sales of LPG after the collapse in U.S. exports. The goal of those efforts is to
[158.7s - 162.7s] exert pressure on a sector involved in significant exports to China.
[164.4s - 171.2s] These are the press releases from state and treasury, but analysts are skeptical the shippers
[171.2s - 178.4s] can even be sanctioned at all, let alone that the new trade routes from Iran to China will be disrupted.
[180.2s - 187.2s] That's propane and other LPG, liquefied petroleum gas. Now bad news is hitting
[187.2s - 195.5s] other energy market sectors. Crude oil, liquefied natural gas, and coal exports from the United
[195.5s - 203.5s] States to China went basically to zero in June. China's tariffs on these products were lower
[203.5s - 210.7s] than for LPG, just 10 to 15 percent, but those were high enough to push Chinese buyers to source
[210.7s - 219.2s] from elsewhere. China is the world's biggest buyer of crude oil, and in June 2024 China bought
[219.2s - 229.9s] $800 million of crude from U.S. suppliers. In June 2025 that number is zero. Last month U.S. sales
[229.9s - 237.2s] to China for gas was zero for the fourth month in a row. In June of last year China bought
[237.2s - 246.4s] $90 million worth of U.S. coal. Now it's next to nothing there. China has diversified its commodities
[246.4s - 253.7s] imports. Russia and Saudi are big players for crude, and Russia again for natural gas.
[255.3s - 261.4s] The trade wars have done a lot of damage in a short time to American farms and our
[261.4s - 269.7s] exporters of soybeans and corn. Now the same is happening in energy, a decoupling of American
[269.7s - 277.5s] suppliers from Chinese demand. We assumed very wrongly that because China had always bought
[277.5s - 284.6s] our soybeans and our energy that they always would. This chart is almost impossible to believe.
[285.8s - 293.1s] October 2024 wasn't that long ago, and we probably assumed that China was dependent on us
[293.1s - 302.6s] for their supplies of coal, crude, and LNG. We thought they needed our LPG, or their plastics
[302.6s - 310.1s] industry would go out of business. So our political leadership needs a new perspective and fast on
[310.1s - 316.9s] this BRICS trading block. These are natural resource economies and their producer economies.
[317.5s - 323.8s] Taken together, the countries on this map pull easily enough energy out of the ground to keep
[323.8s - 329.9s] their lights on and their cars moving. They easily grow enough food to keep everyone fed.
[331.2s - 336.7s] China is the world's biggest manufacturer by far, and the BRICS countries pull enough
[336.7s - 341.0s] ores and metals out of the ground to send to China who can build everything they need.
[344.1s - 347.0s] This is Shaoxing. Be good.
[368.6s - 370.2s] Do you want others?
[370.7s - 372.8s] Do you want others to be in the picture?
[376.4s - 379.1s] Storm up yourself, treasure your heaven.
[380.9s - 382.2s] But where are your treasures?
[383.1s - 383.9s] There are where you are.