We’re living through an unusual period that I call bully economics.

Stocks are set to slide today, and question is: who do we blame: Xi Jinping or Donald Trump? We’re living through an unusual period that I call bully economics but even though Donald Trump isn’t my kind of guy socially and even economically, I’m glad the West at least has a bully who’ll take on the likes of Xi and his mate in Russia — Vlad Putin!

As the history-aware George Bernard Shaw once noted in his book Man and Superman: “The reasonable man adapts himself to the world: the unreasonable one persists in trying to adapt the world to himself. Therefore, all progress depends on the unreasonable man.”

Back to the markets and our S&P/ASX 200 Index is set to open 84 points down. This move started with the bully boys in Beijing, with the announcement that there would be new rules for using Chinese rare earths.

Beijing has ruled foreign producers must obtain a licence to export products that contain more than 0.1% of rare earth coming from China. And the edict goes further saying it applies to rare earth exports manufactured using Chinese extraction, refining, magnet-making or recycling technology!

This ‘catch-all’ rule starts on December 1. And as I told my Switzer Report subscribers on Saturday, “Donald Trump has gone MAD!”

He turned to his beloved self-owned Truth Social and has blasted Beijing saying that “there is no way that a country should be allowed to hold the world ‘captive’ with its rare earth policy”.

While this was his general view on the subject, he backed it up with this threat that he’s practised in: “One of the policies that we are calculating at this moment is a massive increase of tariffs on Chinese products coming into the United States of America,” Trump wrote. “There are many other countermeasures that are, likewise, under serious consideration. Thank you for your attention to this matter!”

This ‘tough arse’ policy from Xi Jinping’s team follows an ongoing battle with BHP.

Lately, Beijing has instructed Chinese steel mills to stop buying BHP iron ore because they can’t agree on price. (For the economics students out there, we all know what a nasty monopolist who makes everything can do, but a monopsonist, who’s the biggest or only buyer in a market can also play unfair hardball too, which China is showing right now.)

Rare earths are critical to many products essential to global production and includes smartphones, electric vehicles, TVs, MRI machines, wind turbines and anything we would call hi-tech!

This bully boy battle explains why our local rare earths producer Lynas Rare Earths is up 155% in a year! This chart shows how the one-year story is out of sync with the five-year story, and shareholders can thank Beijing for that!

Lynas Rare Earths (LYC)

How Donald Trump responds to this will determine the fate of world trade and global stock markets.

China is accusing Trump of double standards, given his tariff policies that were a threat of a 100% tariff on Chinese exports to the US if Beijing didn’t play ball.

That threat the US President unleashed on Friday wiped out US$2 trillion of share market value in a day!

To be fair, even to the Beijing bully, this is what the China trade ministry says: “For a long time … [the US] has been overstretching the concept of national security, abusing export control, taking discriminatory actions against China, and imposing unilateral long-arm jurisdiction measures on various products, including semiconductor equipment and chips.”

CNBC tell us that China argues that “the U.S. Commerce Control list covers more than 3,000 items, more than three times the approximately 900 items on China’s Export Control List of Dual-use Items.”

This could be a case of Trump over-bullying China or that China has too many products that threaten the West!

While I’m no fan of bullies, I’m glad in a world of too many bullies, the West has Donald Trump to deal with the likes of Xi, Putin and even entrepreneurial bullies like Elon Musk! History has shown that reasonable men like Joe Biden weren’t competitive enough (i.e., not bullying enough) to deal with the new world we live in.

I know we’re living in crazy times, but bullying isn’t just coming from political quarters. In NSW, the workplace insurer is $5.4 billion in debt. Premiums paid by employers, who mainly are small business owners, are set to see a 36% rise in premiums to cover their employees for compensation from injuries.

However, too many workers are rorting and gaming the system claiming bullying and harassment. And Labor Treasurer Daniel Mookhey is fighting unions and even the Liberal Opposition to reduce payouts for bullying and the like, so the insurance system doesn’t collapse!

Not only is Xi Jinping and Donald Trump bullying each other, and Putin bullying Ukraine but workers are now bullying employers after years of bosses being accused of doing exactly the same thing!

Yep, bullying is out of control. We need sensible leaders to sort this out here and everywhere! Who knows, voters might even vote for politicians that show a commitment to common sense.