How much pain can Chinese steelworkers take? (Credit: Kevin Frayer/Getty)
Donald Trump boasted that world leaders were “kissing my ass” as they scrambled to negotiate tariff deals with the United States. At a fundraising dinner this week in Washington, the President taunted his purported sycophants: “Please, sir, make a deal. I’ll do anything. I’ll do anything, sir.” It’s not obvious who exactly he was referring to, but at least one country was having none of it. China’s riposte to Washington’s declaration of a trade war was: bring it on.
On Wednesday, Trump put a 90-day pause on tariffs above 10%. There was one major exception: China, with whom the president has started a perilous game of chicken. After his administration imposed a further 34% surcharge to the earlier set of tariffs it had slapped on China, the Chinese leadership reciprocated, applying the same 34% right back. Even as he paused tariffs for the rest of the world, Trump announced he would put China’s tariff up to 125%.
The markets rallied in response to the 90-day pause. But in the four days that followed Liberation Day, Americans saw more than $6 trillion of their wealth evaporate in the stock market, and they’re still sitting on losses. Their interest rates spiked as investors dumped US Treasuries they no longer regarded as safe, and the purchasing power of their dollars fell as foreigners pulled up stakes and retreated back home. If this is the outcome of the so-called Thucydides Trap, the idea that a declining empire ends up at war with a rising one, the early betting by investors seems to be against an American victory. Trump, reluctantly, may have been forced to confront that reality.
Not that anyone stands to gain from a trade war. If the initial, aggressive global tariff programme is resumed, the whole world economy will suffer, with estimates of the cumulative reduction in global economic growth in coming years having rising above 2%. In the short term, smaller economies that depend heavily on trade with the US — Mexico, Canada, Vietnam, and let’s not forget poor little Lesotho — would be hit the hardest, but everyone will come off worse. As the old African proverb has it, when two elephants fight, only the grass suffers.
But once the dust has settled, it may well be that the winner, in relative terms, is China. The country may bounce back harder than its rival because Trump appears to have succumbed to the fatal flaw of many an empire in decline: hubris. He has over-estimated his strength and under-estimated his foe’s.
In this cavalier frame of mind, Trump launched his trade war with no clear strategy, probably assuming everyone would quickly surrender. His end-game is little more than a vaguely operationalised goal of stopping the world from ripping off or plundering the States, however one measures that. This has left America ill-prepared for a possibly drawn-out trade conflict with China, in which it could be at a disadvantage. By opening up a couple of hundred trade-war fronts at once, Trump endangered just over a tenth of the American economy. And in doing so, he has made enemies everywhere. China, by contrast, has focused its new trade barriers only on the United States, which accounts for about 2.5% of its GDP — or closer to 4%, if one includes “connector” countries like Vietnam.
In other words, having declared it will “fight to the end if the US side is bent on going down the wrong path”, Beijing is prepared to take the hit, no doubt secure in the knowledge that it is taking a far smaller economic risk than the United States.
China’s deftness results from what is, in contrast to the US, a clear strategy. Its aim is to maintain an open world trading order that has served it well, and use this as a market to develop the high-value export industries it believes will define the future, like renewable energy, EVs, robotics and artificial intelligence. It will happily exploit the United States’ newly fraught relations with other countries: positioning itself as the new guarantor of the world trading order the US has renounced, China is securing growing markets in the developing world while managing relations with Europe.
In addition, China enjoys an advantage over the US in political and economic firepower. That might seem a strange thing to say, given that the US economy is bigger than China’s, with a much higher per capita income, and is much less exposed to trade with China than China is to the US. But that simple arithmetic is misleading. The question is not just how much punishment each country can apply, but how much pain it can absorb.
Whereas the Chinese leadership can justify its action to its people by saying it didn’t pick this war, it seems unlikely the average American whose cost of living shoots up will celebrate simply because he or she hears someone in China has it worse. Politically, the US administration has not prepared the nation for anything more than a brief skirmish, with Trump bragging that trade wars are easy to win. The President came to office on a pledge to bring down inflation and boost the economy — now, financial meltdown has driven a precipitous drop in his approval rating.
Nor does insisting that this is short-term pain for long-term gain help Trump’s cause much. It may keep his base on board for now, but swing voters have been abandoning Republicans, as recent special elections have shown. The longer this conflict drags out, the worse that will get. Peter Navarro said this week that the stock market is now bottoming and the Dow Jones Industrial Average will soon go to 50,000, but if instead it keeps plummeting, or if inflation spins out of control, the administration’s soft treatment by Right-wing cheerleaders may soon wear out. One study estimated that a wider tariff war would knock nearly 2% off America’s economic growth and raise prices by as much as 7%. Unlike the Chinese leadership, the US faces mid-term elections next year, and if the price of eggs keeps on rising, Trump could lose his foot soldiers.
Meanwhile, China has a lot of what can be called economic strategic depth. The basic tension in the US/China trade relationship is that the US has been living beyond its means, whereas China has been living well beneath them, repressing wages to keep export prices competitive. Faced with the loss of external markets, the Chinese leadership is now re-orienting the economy towards domestic consumption to pick up the slack, which will lessen the impact of the trade war on ordinary citizens. It thereby has a lot of capacity to absorb lost American sales.
Unlike the US, China has kept a lot of its powder dry. It could, for instance, still restrict exports of critical minerals to the US or target US multinationals with operations in China. And with its very high domestic savings rate, Beijing has a lot of fiscal space to cushion the blow of a prolonged war. The US, in contrast, depends for its deficit-financing on creditors who, to judge from the plunge in US bond prices this week, are already losing patience with Trump.
Taking all that into account, Beijing’s defiant and resolute tone shouldn’t surprise us. Before Trump’s announcement of the 125% tariff, it responded to Trump’s previous upping of the ante by again reciprocating, leaving US exports to China facing an 84% tariff. Whereas the US leadership is at war with itself, with Elon Musk openly calling Navarro, the suspected architect of the tariff schedule, a “moron”, “dumber than a sack of bricks”, and “Peter Retarrdo”, and with various members of the administration publicly telling audiences they’re not responsible for the policy, the Chinese leadership remains unified.
That’s to be expected, given the country’s authoritarian model, but what’s more noteworthy is the relative unity, so far, across China’s corporate elite as well. Unlike in the United States, where CEOs and fund managers have been screaming for a change in direction, China’s major companies are telling their clients they should be able to manage the challenge. Whereas US grocery bills are expected to leap, Chinese food producers are saying they should be able to keep price increases limited. The confidence index among chief economists remains positive, the government is bolstering stock prices and improving liquidity in the banking system, and the rapidly-rising new energy sector expects to be largely immune from the impact of the America salvo. This isn’t surprising, given since so much of China’s export market for this sector’s products lies in the developing world. While Tesla’s share price has fallen by half, its Chinese rival BYD’s is up 20% this year.
No doubt there is an element of bravado in the tough talk from China. But all the signs are that the country is up for this fight. It remains to be seen whether Trump’s 90-day suspension is a ceasefire or a surrender. But either way, it doesn’t look like an early show of strength.
John Rapley is an author and academic who divides his time between London, Johannesburg and Ottawa. His books include Why Empires Fall: Rome, America and the Future of the West (with Peter Heather, Penguin, 2023) and Twilight of the Money Gods: Economics as a Religion (Simon & Schuster, 2017).
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SubscribeTo all intents and purposes, China has just lost its biggest export market by a country mile. Can it re-route those exports to it’s own domestic market? Well, how many kettles, microwaves and electronic games can the Chinese people need? How about other export markets? Tricky. Other developing countries don’t want to sabotage their nascent industries with dumped Chinese merchandise.
China has problems too.
How many kettles does the US need?
I wonder if “A new one every year or two” might not be the most common answer. It’s called shopping-for-sport. America’s favorite pass time since at least 1975.
If I’m not mistaken, in a trade war between two countries, one of which has a large trade deficit with the other, while the latter has. a large surplus with the former, it is always the country with the trade surplus that loses. China is mercantilist and is dependent on exports. Cut those exports and let’s see who hurts. i.e. do we really need all those cheap chinese goods that are utter garbage and last for all of a couple of weeks before breaking?
Enjoy those $500 sneakers and $5000 iPhones! If you liked inflation under Joe Biden then you are going to love it under Trump!!!
Any normal person would simply not but these items. Samsung, not Chinese, would be cheaper.
Not necessarily. America is not the only market China can export to. And it is not just cheap goods but many supply chains – from electronics to textile and pharmaceuticals – that depend on Chinese supplies and manufacturers. So the American consumer will notice that. And then there is the system that surplus countries buy American treasuries and invest their profits in US assets. We saw how fragile this financial system is this week, or, perhaps, that it is pretty much still a giant Ponzi.
Typically you use tariffs to protect your domestic industry but, of course, then you need have that industry or some industrial plan to build it.
You might think that if you can’t count. There is massive overproduction in China and huge inventories of cars, particularly EV’s. Without access to the US markets, production slows or stops and millions, not tens of thousands, millions of Chinese people are put out of work.
China’s GDP per capita puts them around 70th place in the world, not quite the power you think and not nearly as stable as you appear to believe.
Sure, I don’t think anybody argues that China wouldn’t be hit. But the assumption that the country with the large surplus “always” loses is also not true.
China has many other export markets apart from the US. Yes they are much poorer per capita but it’s US consumers who are used to being far richer who are going to protest. Of course Chinese consumers cannot really protest much, but they tend to be much more supportive of the Chinese government than Americans are of any American one. Let alone one led by the often.petsonallu obnoxious, boastful and bullying Trump. Don’t mistake MAGA for America!.
“In this cavalier frame of mind, Trump launched his trade war with no clear strategy, probably assuming everyone would quickly surrender.” How does childish nonsense like this make it into print. UnHerd would have done better soliciting an article on this subject from any random middle schooler.
Yes, I got the sense that Mr. Rapley would prefer it if we all just gave up, purchased our communist uniforms and learned to speak Mandarin.
When in doubt call the person you don’t like names
That’s a “shoot the messenger” comment! A truly bad argument, a 10 year old child could manage better.
Explain exactly WHY in your opinion it is childish nonsense! Otherwise you are just name calling. Which strategy is Trump following? Why is there so much chopping and changing?
Well your mobile or PC may well be chinese manufacture, even if a US brand. Is that “cheap chinese” as well? The Chinese think the US president is action man with the forward thinking of a gold fish I am afraid.
You’re living in the past. In my view, Chinese goods these days are not garbage and last pretty well.
Agreed. The Chinese can produce items of any quality, really. They have made huge advancements in the last 20 years. The cheap stuff is, well cheap. If you pay the least amount of money for something, it’s probably junk, no matter where it’s made. But there are more expensive Chinese goods that are of very high quality.
not in my experience
It’s not a trading deficit in crappy toilet seat warmers and battery-powered Elvis dolls that America needs to angst over, matey. It’s supply chain feedstocks, energy, investment capital and, um, oh yeah – distance, manpower, innovation and geopolitical influence.
That last one was America’s greatest and maybe last enduring trading lever. Trump has torn it out of its seat, thinking he can use it to bludgeon all the others into submission.
Yet… more… pabulum. On every point, the author puts China in the ascendancy before declaring:
Waiting till the final paragraph before hedging his bets isn’t an improvement on the author the other day (can’t recall who now… doesn’t matter…may even be the same one!) who did the same, except halfway through his piece.
These moves will – of course – have been factored in by the Trump team yet the author seems to think they’ll be taken aback by the retaliatory tariff hikes. For goodness sake, which kindergarten are these academics working in?
Might i suggest that whilst he “divides his time between London, Johannesburg and Ottawa” the author spends some time in mid-air having a good long think about what he’s trying to achieve by churning out what’s highly likely to be yesterday’s news by the time his plane touches down, and tries planting his feet more firmly on the ground?
“These moves will – of course – have been factored in by the Trump team”
Naive in the extreme, our kid! You really think Trump or any of the drunks, rapists, criminal and half wits in his cabinet thought anything through? What possible evidence is there of that?
Looks like the Chairman Xi sympathizers are all riled up.
Really?!?! Where?!?!
I see the tendency to label anyone who favours the argument favouring Russia in the war it is in as a Putin supporter has now spread to China. They can’t say anything that addresses the points made so resort to ad hominem rubbish.
Fully aware Phil. Agree. It was tongue and cheek.
The most terrifying prospect for John Rapley and his fellow TDS travellers is that Trump might actually be right.
For them any alternative would be preferable, including seeing the world economy crash and a world wide depression
Well, that definitely explains how upset they are pretending to be! The only thing that gets them this worked up is the possibility of Trump succeeding.
Beijing is prepared to take the hit, no doubt secure in the knowledge that it is taking a far smaller economic risk than the United States.
Haha! As even this author admits, the trade imbalance is such that China sells more to the US than vice versa. Hence when China’s exports drop precipitously it will be much more seriously damaged, particularly since most other countries will strike up reasonable deals with the US.
Read Rapley, do the opposite.
The ‘Trump team’. What’s that then?
“Trump appears to have succumbed to the fatal flaw of many an empire in decline: hubris. He has over-estimated his strength and under-estimated his foes”
Maybe. Or maybe he just knows that it is now or never.
On last point – if so why naff off all the Allies you need in that fight at same time? Why cede ground all over the World to the CCP via your other strategies?
Trump’s primarily on a permanent ‘grift’ but also sometimes he has valid strategic points. What he lacks is then a properly thought through strategy. His natural hubris and belief in his own superior intelligence coupled with surrounding oneself with sycophants who lack experience, means he’s incapable of developing and sustaining really clever strategies. Instead it’s chaos masquerading as strategy. Remember how many times he went bankrupt too.
why naff off all the Allies you need in that fight
Who would that be?
You’re a Navy guy. You must know that the US keeps the Suez Canal open so that Europe can trade by maintaining a carrier battle fleet in the Red Sea that costs $billions daily. How much is your beloved EU contributing to that? Or to the defence of Ukraine? How much is the UK contributing? We’re in the process of paying a Chinese client to take over the Chagos Islands FFS.
It’s amazing the US has put up with this for as long as they have.
Err, slightly wrong part of the World HB and of course Trump does still want to hit Iran. That’s why he hit the Houthi’s.
But Japan, Taiwan, S Korea, Phillipines, Aus/NZ etc – all in vicinity of S China Sea and all naffed off by Trump (albeit he caved in yesterday in large part).
Destabilizing the links of dependency is part of the plan.
It’s usually a good idea if you don’t have a counter-argument simply to keep quiet and let it pass, you know.
Trump is not only a f*****g convicted felon he also a moron who creating economic chaos and recession globally, leading to the eventual downfall of America with his threat and every country globally been threatened by his tariff like what China will stand up against moron Trump who will also retaliate with similar tariffs increases if this moron Trump further increases his tariffs on China, all MUST also imposed similar tariffs on America as well as BOYCOT American manufactured items as that the only way to counter his tariffs threat where all those moron Americans who sided and voted for his return as the US President will be overthrown and have this convicted felon thrown in jail for life.
Dun waste your times giving in to his tariff threat which is this moron way of bullying everyone he and his administration feel is the only way to resolved their huge over US$ 35 Trillions outstanding debt which will never be repaid nor settled at all and will continue to enlarged further with this convicted felon Moron Trump and his moron administration.
Everyone MUST stand up against this stupid convicted felon Trump and NOT grovel and beg as all American people will very soon over throw Trump, his family and his stupid administration out of the government with this moron Trump continual tariff policy on Americans who will suffer far more.
Are you feeling unwell UH?
I only ask because that is a most intemperate response, whatever one feels about this.
Sounds very objective and not at all unhinged.
Way too hysterical. Calm down.
You’re just using nebulous language to make vague accusations sound profound.
What is an “Ally” and is there a Hierarchy in the Allied Coalition? Does one party have more duties than others? If there is a Hierarchy and America is at the top do other allies have a duty to adopt its posture when there is a political change in America? Or is America permanently required to maintain it’s 2008-2024 posture of apologizing for being America and never criticizing allies it feels aren’t contributing enough?
Well, he hasn’t surrounded himself with yes men. He’s well aware that Vance and musk are smarter than he is. It’s what he likes about them.
Peter Navarro? Or was that Ron Vara?
Slight aside – Scott Luttnick piled into Long Term Bonds apparently a few wks before the tariff plan. Interesting. Something I guess at least for the forced sycophancy, albeit he was starting to look a bit sick too on Tuesday.
And then the boys and their macho Signal text correspondence with classified intelligence info? And a real Estate friend as special envoy to Russia/Ukraine and the Middle East. Just sizing up the luxury condo possibilities? Yep he’s certainly surrounded himself with the brightest and best.
It’s a big tent government.
Usually there are at least a couple clowns.
Indeed that is true. However when the sensible are then forced to act like clowns too it’s a proper circus.
Scott Luttnick piled into Long Term Bonds
We had four long years of precisely this sort of corruption during the Biden administration and you had nothing to say about it at all.
Not quite sure as blatant HB. I’m not defending Biden but you point out the as obvious bit of corruption.
Sssshh! We are not supposed to think that anyone is smarter than him let alone tothink he might realise it too!
Seriously? Again? I am tired of these allusions concerning Trump’s supposed grand plans, his alleged secret wisdom and foresight. The man bankrupted his casinos. He advised citizens to try drinking bleach. In the last week or so he has almost bankrupted America. Trump is an idiot, plain and simple. How much more evidence do you need?
This is a superficial analysis. And I see China’s retaliatory tariffs as posturing–an outward show of strength. As most of us know, China enjoys a trade surplus with the US and will feel heat of the tariff escalation employed against it. The author seems to think it is all shine and rainbows for the Chinese economy and demography.
Repeating Putin talking points…evil. Repeating Putin ally, Chairman Xi talking points…enlightened.
Did you get your talking points from Fox today? Isn’t it so annoying when they change them halfway through the day and you have to say exactly the opposite of what you were saying 10 minutes ago as if its a strategy!
I like how your talking point is a talking point about a talking point.
The only advantage that China has over the United States in this trade war is the ability to force its citizens to do whatever it wants at the point of a knife.
Trump is just trying to fix the situation that resulted in hundreds of new sparkling, grand cities of the future popping up all over China while the American rust belt falls into decay. That is the deal that the Wall Street globalist neoliberals made 40 years ago.
So what does the Unherdosphere think of Trump’s recent announcement he’s suspending tariffs for 90 days except with respect to China?
Clearly he’s not willing to back down from China. But what about all the other countries? Is Trump caving to pressure from his own party, or were his initial shock and awe tariffs always a tool to quickly bring most countries to the negotiating table and he’s giving them 90 days to strike a deal?
How long before someone says “art of the deal” as if these clowns have the faintest idea what they are doing.
Absolutely the second. It’s rude to say ” I told you so” but that’s what a lot of us who don’t scream out of permanent TDS feel!
Incidentally has Mr Rapley forgotten the seriously bad behaviour of CCP during Covid? Banning API exports, medicines etc
I am more concerned about the curious company British academia keeps nowadays.
It’s all about China. This and pretty much everything else he’s been doing.
Tbh I don’t care
He’s bottled it. First sign of pressure and he’s completely changed course.
He’s learning that running a country is different to a business.
He’s always had the advantage of being born a billionaire, so he could be aggressive in his business dealings to the point of recklessness knowing full well most others would blink first, and if they didn’t and his business failed (as it did on multiple occasions) it wouldn’t affect his standard of living at all.
It’s harder to use the same tactics against nations
He’s caved for two reasons. Firstly Bond prices moved in the wrong direction and contrary to what one might have expected. That showed how bad this was. Secondly one can assume some senior Republicans had a word what a gift to the Democrats this is.
As regards China, he may yet cave too. He’s not given himself an off-ramp yet. China needs to be tackled but his strategy feels reactive and anyone want to strongly bet he’s thought it all through?
China should have been tackled two decades ago. Unfortunately Wall Street and the Blairites were too stupid and greedy to look after even their own long term interests. Forget about anyone else’s.
Hang on a minute HB, you missed out all the folks whose property value has increased. Come on that’s your ‘go to’ too, and you can’t be missing one of your beefs.
Do you really think there’s no connection between your unearned wealth and the size of the American and UK debt? Go back to school or, at the very least, turn off the telly, bin the newspapers and read some books.
He hasn’t caved: he’s postponed. To allow for negotiations.
Trump’s superpower is that he makes opponents contradict themselves because he knows they have no patience. They live by the theory that only he is an egotistical narcissist while they are not. This is obviously false. Its too easy. Jwatson and Billy Bob are good examples of how it works in negotiations.
Anybody who seriously looks at “allyship” knows that each country is made up of Friends and Foes. Foes
will reflexively condone his every move. Once he reverses course, they’re stuck in a contradictory pickle because now he did what they want and they’re still not happy. It becomes clear their only principle is hoping Trump fails. This proves foes are not actually allies but antagonists.
Narratives like “he caved” are not serious arguments. In negotiations, both parties are supposed to cave. If only one is willing to cave than that party has a valid claim to being a dealmaker while his opponents are ultimately going to be viewed as cynical obstructionists.
Black is white. Boys are girls. Reversing the thing you did yesterday, and said you would never reverse, is negotiating. Carrying a little stick and talking very loudly about how big it is, while you wave it around publicly so that the world can see for itself its actual small size, is how you win a fight you never needed to pick. Isolating yourself economically from a world that owns your supply chains, your bond market, your debt market and your currency…is setting up a yuuuuge deal.
Welcome to the inverse epistemology of our mass media age.
Its not isolation. Its asking for the freeloaders to pay their rent.
Trumps superpower is being able to get his more cultish followers praise behaviour they were vehemently opposed to just a few months previously
Well, whatever Trump planned or didn’t or whatever this all means in the great scheme of things, I for one need a stiff drink after the last week.
Too much verbiage is being pushed out about this topic at this early stage. Everything about this process will change, so prognosticating will always be out of date by the time it’s published.
This ^^^
Unfortunately this seems to be state of commentary (and commenting) writ large, not just on UnHerd.
Why is there a digitally-aged photo of Real Madrid and England star Jude Bellingham, smoking, in the header?
Oh is that who it was? I assumed it was a picture of a Chinese coal miner, smoking just below a “Danger Methane – No smoking!” sign
“China’s deftness results from what is, in contrast to the US, a clear strategy.”
This whole article is borderline gibberish from someone who clearly doesn’t understand trade policies, rules or economics and is certainly blinded by a loathing of Trump.
Worse, he has zero understanding of China. Xi is a barely competent bureaucrat, just like Putin, borderline incompetent. Mao wrote an article titled, “A single spark can start a revolution.” Xi and most people in the CCCP know this and are terrified of that spark because they don’t want to have the same fate as the USSR.
I am personally taking a massive hit from retaliation with an 84% tariff on US goods to China and I have little fondness for Trump or Xi but I am not blinded to the realities of the situation as the lamentable Mr. Raply appears to be.
Far too biased agsinst the USA. China cannot simply ignite domestic desnd overmight and is going to exerece a huge loss of jobs if it cannot sell its exports to the US market, which could easily result in political unrest.
GordonChang.com – He explains it beautifully.
I checked out his site and you are right.
https://thehill.com/opinion/international/5200874-chinese-military-crisis-xi-jinping/
It certainly shows how badly informed and foolish Rapley is.
Is this the same Gordon Chang who in 2001 published the book “The Coming Collapse of China”?
US Treasuries were probably largely being sold off to meet margin calls. China could have also started selling off its Treasury reserves as a warning shot.
https://capx.co/what-is-trump-doing-to-the-bond-markets
Treasury bills were always the Achilles Heel of Trump’s strategy. However with backroom negotiations now in process, presumably to burden share dollar hegemony, then the 90 day ceasefire is justified which also gives Trump’s team time to determine how to play the market in relation to China and whether the Federal Reserve needs to hold fast with interest rates in anticipation of inflation or whether to cut rates if a recession is anticipated.
Trump’s team has exactly nothing to negotiate with. Nothing. MAGA is done. America might still survive him if it’s lucky. And its remaining allies are generous.
Trump will need to start kissing asses fast, though.
Which Ally should we Americans fear losing the most? The Canadian Communist Party, the British Fabians, the Guild of Postmodern Frenchies or the German Party of Relativity and Climate Existentialism?
Stupid people who think they are clever are my favourites!
They certainly make it harder to point out why you’re the biggest idiot in the room, Champers. I will ruefully concede you that much.
Those dastardly ‘Red’ allies – (really?) – and their mates now collectively own Trump, tough guy. They all shat themselves laughing for a few minutes at his economically-illiterate idiocy, lazily dumped a few US bonds, then waited until America’s squillionaires slapped some sense into the few grown-ups in the MAGA loonocracy. In Canada’s case they even got the jump on the cretin-in-chief. (Because they are not cretins. Or Reds.) Those deeply pro-US nations you slag off…now own Donald Trump, champ. America’s only hope is recognising that. And also finally recognising that MAGA is a disaster for it. And treating Trump as the lame duck President he is.
‘The Don’ really thought that America was the global trading protection racket mobster! He got it 100% arse-about. And now the whole world knows it.
Especially China. Which is..erm, actually a communist autocracy. (Hadn’t you noticed, TB?) Unfortunately for us all, those ‘actual’ commies in this lop-sided swagger-athon own lots of America, too. Along with a bundle of other trading nations, big and small. Maybe enough to really f**k the whole world up, transform it into its image, in the way the US did post-WW2. Dunno. I do know which version of the world I prefer, though. As I say, it depends on how good Trump proves to be at behaving like a good little democratic, global capitalist boy from now on, kissing allies’ asses extravagantly and henceforth confining himself to golf, hair care and reality TV.
Did you see Howard Lutnick in DC a few days ago, T Bone? Pathetically waffling on, like a suddenly-scared little supplicant, about ‘the crazy‘ number of those allies you sneer at, calling up to ‘negotiate‘…oh, TB, ‘it was impossible‘ for poor little suddenly ‘respectful‘ Howard to be ‘respectful‘ to ‘all these wonderful allied countries‘, who suddenly ‘deserve respect‘…kissing ‘all these great countries‘ asses so desperately that a bloke wanted to vomit. What – now, Howie? All that obsequious crap about us allies deserving America’s ‘respect‘…now? Chortle. Scared much, tough guy?
Well. Fine, fine. Yes, there’s a good little boy, Howard Lutnick. Good little puppy. Kiss our asses, you good little global trade simp. We ‘might’ negotiate a way out of this fiasco for you. We ‘might’ give you Yanks a face-saving puppy biscuit.
Good boy, Don! Sit up, Don! Roll over, Don! Oh, that’s right: you already did.
What a yapping, crapping, blind old mutt MAGA is. It can barely scare any bad guys any more, too. Time to put it down, America. For everyone’s sake, including its own.
There are other winners of course. The insiders who have advance knowledge of DT’s flip-flopping on tariffs and how that will affect the markets have done very well. However fear not as there are independent investigators to check that out – oh dear I forgot, DT has sacked them all, how convenient!
None of this will matter once Taiwan is invaded and all commerce with China stops. We may as well go through the pain of decoupling now. I suspect national security concerns, not economics, is what is driving this.
But if we’re ever going to get out from under this tsunami of Chinese products we’re going to have to change some of our expectations. If we can’t, then we lose our wealth and our culture. A tariff war with China is how we avoid that.
Similarly, if we’re ever going to get our allies to stop treating us like Daddy Deep Pockets a tariff scare might help.
The only thing that’s certain is that Change and Uncertainty have been resurrected. That’s capitalism, isn’t it? Buckle your seatbelts.
I struggle to see what China’s strengths are!
At present it’s a matter of ‘face’ and nerve. Trump had ‘some nerve’ to take a knife to the the global trade ‘system’. Xi has lost ‘face’ by reacting impotently. Does he have the nerve to retaliate in the only effective way he has (for now) by attacking Taiwan ahead of his chosen schedule? ‘Face’ cannot easily be saved by delay.
At the end of the day one country is led by a guy who is demonstrably detached from reality and with no real plan (and who started the foray by punching all his friends in the face) and the other by a smart guy who seems to have a plan and a unified team. As in any corporate investment the most critical element is the quality of the leadership team. Place your bets.
Congratulations on a most learned article and by one who so obviously does their homework before opening of the mouth
The only matters I can add that only slightly or not touched upon are
Threaten China and immediately the whole citizenship gels and unifies Make no mistake regards that . Why do think Chinese civilization 5000 years old
China all too well knew this was coming and steadfastly been preparing behind the scenes quietly but surely
Not only have they planned on the immediate battle in front of them
But most cleverly set in motion
Diplomatic , Economic and governance reforms which ensures
That the USA and those stupid enough to align with America shall incur so much damage that they are in economic, military and terms of influence that they shall remain
Upon the canvas unless they agree to cooperate in developing a new Civilisation for the New Era in order
To create one that returns the balance and harmony between Humanity and Nature in order to create a more equitable future which is sustainable with moderate prosperity for all and not for the few
Those that remain upon the canvas and refuse the hand of friendship
That offers them to stand tall again
Shall merely be left where they lay
To wither and die
The Orange One hubris was predicted and predictable. Perhaps only those susceptible to hubris themselves bought the ‘masterplan’ nonsense.
You have a habit of making snap judgements long before the smoke has cleared and it becomes possible to take a balanced view. Too much knee-jerk ideological baggage. Let’s wait and see. It’s not as if the current trading regime is working for the vast majority of people after all. Why waste so much energy defending it?
Bond market HB. Not me who made the judgment.
Your Sunk Cost in the Orange One means you’ll stay blind for some time yet I’m sure.
Do you see Ursula for example returning to her desk and acting as if nothing happened? Continuing with business as usual? I await the reactions of her ilk with interest.
Sunks cost in TDS is also wasteful.
There was a time when I thought you might begin to understand some of this stuff. Not going to happen, is it? You’ll go to your grave thinking that Tony was the second coming. Sad, really.