Industrial Warfare Comes to the United States and EU

March 22, 2018 Updated: March 29, 2018    

News Analysis

President of the European Union Jean-Claude Juncker told an audience in Hamburg on March 2, “We can do stupid as well.” Juncker was referring to President Donald Trump’s threat of imposing import tariffs on certain goods coming from the EU.

“So now we will also impose import tariffs,” Junker said. “This is basically a stupid process, the fact that we have to do this. But we have to do it. We will now impose tariffs on motorcycles, Harley Davidson, on blue jeans, Levis, on bourbon.”

In reality, however, the EU has already put disproportionately high taxes on U.S. imports. When America imports cars from the EU, the tariff is 2.5 percent. For a U.S.-made car going into the EU, the tariff is 10 percent.

That tariff ensures that Europeans drive European cars. We all know that there is a lot more to selling a car than just tariffs, but Trump wants America to export, and to do that, we need to have a level playing field, and this is Trump’s main concern.

In response to Juncker’s statement, Trump indicated that the United States might start increasing taxes on imports of European cars such as Mercedes-Benz and BMW.

If one looks at the strategies employed in global industrial warfare, we have merely scratched the surface.

The complexities of industrial warfare go far beyond the trivial argumentative language. Industrial warfare is happening constantly, in all geographies and in all industries.

Even when there is peace between enemies and allies, a competitor will be looking to outsmart his rival, whether a nation-state, industry, supply chain, or product. The key is understanding how it takes place, and which blows to absorb, which ones to block, and how to engage the enemy.

Only around 10 percent of industrial warfare actually shows itself on the surface, in the form of actions such as tariffs, which can be seen as defense mechanisms. Ninety percent of the strategies, tactics, and operations involved in corporate attack and defense maneuvers are actually under the surface. These are far more discreet and much more damaging to the economy.

Underlying pressures dictate the direction of global battle.

The motivation for industrial warfare does not just rest upon Trump’s shoulders. Every country in the world is involved—whether on an international, national, regional, or local level. All competitors are competing and taking each others’ intellectual property. In the business world, this process is sometimes described as “benchmarking.”

With benchmarking—spying, in business terms—questions are asked and gap analysis is done. What is competitor A doing that we, competitor B, are not? Sometimes, visits to plants are even arranged to see the systems, take pictures, create videos, and buy products to take apart.

That’s the very first thing Lexus did when they started. They bought a BMW, a Mercedes, and a Rolls Royce and took them apart before creating the Lexus model range. Today, Lexus has taken a large chunk of the high-end luxury car market. No one complained when they did it. And Lexus never complained when their latest car was bought by their competitors BMW, Mercedes, and Audi. All of these competitors know that when we build a product, competitors will take it apart and find out what we have been doing.

Competitors are usually the first to buy the new product, before other customers can even get to it. This is common practice. The Chinese regime does it all the time. It’s called the learning process, and it takes many forms in the art of industrial warfare.
The lesson here is very simple. The key is to learn about the process of industrial warfare, and be aware and informed about the strategies that competitors across the world will take.

The issue at hand isn’t “stupid” tariffs, as Juncker described them, but instead the nature of an industrial war that has been ongoing for decades, and of which the EU has been just as much a part.

Amar Manzoor is the author of “The Art of Industrial Warfare” and the founder of the 7Tao Industrial Warfare combat system, which he teaches to students.

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