What’s behind US labeling China a ‘threat’ & what if trade talks fail? Keiser Report weighs in

China undermines US monopoly, making cheaper goods and equipment America cannot spy on, veteran economist Michael Hudson told RT’s Max Keiser. He warns that the world is to split if the two powers fail to settle their row.

Washington cannot stand and feels insecure when it cannot totally control other countries, allowing it to make others do “whatever we want in foreign policy and treat you like we are treating Iran,” professor of economics at the University of Missouri and a researcher at the Levy Economics Institute explained in a New Year’s special of Keiser Report.

The same applies if the US is unable to put spyware in different devices, the analyst added. But China manufactures its own chips among other high technology equipment thus making this mission impossible.

“China is making telephones and computer equipment that we can’t spy on and that is a threat to our national security because they’re interfering with our ability to spy on you and on it,” Hudson said.

The world anticipates the upcoming high-level talks between the two world biggest economies, that is to take place on January 7-8. While markets rallied on and oil jumped on the news on Friday, the economist warned that the outcome of the trade “cold war” can literally change the global economy.

“Each country splitting and going its own way – the Chinese ‘Belt and Road’ group, the Eurasian group…will go their way and the Americans and their satellites – Canada and Europe and Latin America – will go its way. So you’ll have a fracturing of the world,” Hudson explained.

For more stories on economy & finance visit RT's business section