So that’s the dumbest thing Trump is doing. Deporting low income workers when he’s trying to bring low income work back to America. It’s literally the opposite of what you would want to do. Yet here we are. The stupidity I feel is the most stunning thing about all this. I knew Trump was insane, but completely idiotic was not something I thought was part of the deal.
China’s not negotiating. This is the best result for China. As long as USA is going to continually be belligerent with tariffs to all nations, China actually would not benefit with preferential treatment.
China wants to let the tariffs slowly but persistently eat away at USA’s economy. 30% is just about right as Mexico and Canada are at 25%. China doesn’t need to be the cheapest, just affordable enough that Americans will still buy. So while trade will decrease it won’t stop. This gives China the breathing room they need to build up supply chains everywhere else. All the while Americans will afford less and less as tariffs eat away at their income. This will lead to less business creation activity and destroy manufacturing as the manufacturing inputs being tariffed makes USA products unaffordable.
If this looks like China is capitulating, all the better. Though most people realize it’s Trump that blinked. Since their counter actions aren’t really tariffs to begin with. China can order their companies who they buy from and more importantly who they don’t.
You mean a product that has no shipping costs can be replicated infinitely for free and maintains high paying jobs is worth more than sweat shop factories? Say it ain’t so. Obviously we want to give up on YouTube and MS office etc… So we can put tiny screws into iPhones.
China absolutely has the power over the US to make the US feel pain. The problem is any use of that power would make China feel just as much pain. It would be self-immolation. The three main things China can do are.
Cut all exports. Ironically, Trump did that to himself so that’s why Trump capitulated.
Sell all US assets. Not just bonds. Of course this would absolutely destroy China’s economy, so a no go.
Nuclear war. But this is the end of humanity, so also a no go.
So China has the power, but would need to basically be willing to end life as we know it, or do what Trump did to himself. Again, ironically that was the one thing that didn’t involve total annihilation and Trump willingly committed seppuku. So weird.