Why should investors read James Mattis’ resignation letter?



Investors have been monitoring China’s economy for a long time and any good or bad figure from Hong Kong and Shenzhen does impact global markets. The resignation of US Defense Secretary James “Mad Dog” Mattis after two years with the Trump administration comes as additional evidence of how the United States might deal with the 21th century’s strategic environment.

Beyond the consequences of a US military withdrawal from the on-the-ground combat against the Islamic State (ISIS) in the Syria-Iraq area from stability and energy viewpoints, this is more about Russia and chiefly about China that Mattis’ resignation bears significant relevance.

“I believe we must be resolute and unambiguous in our approach to those countries whose strategic interests are increasingly in tension with ours,” wrote General Mattis in his resignation letter. “It is clear that China and Russia, for example, want to shape a world consistent with their authoritarian model”, stressed Mattis.

As a result, investors should understand that from a global strategic perspective, a number of US officials do envisage growing tensions – be it a cold or a hot warbetween the United States-NATO and a China-Russia axis. Although any military confrontation seems unlikely today, the loosening of nuclear weapons and nonproliferation treaties plus trade disputes have grown while China emerged as the world’s second largest economy and while the United States searched to meet the long-term challenge of its increasingly contested leadership.

Clearly, James Mattis writes that the relationship between the West and Asia is likely already engaged on a rocky road already, and any savvy investor should take this into account on a worldwide scale.