The idea of getting ripped off with trade deficit is just extremely stupid.
You go to a restaurant to buy food. You pay money in exchange for the food. You have a trade deficit with the restaurant. So are you getting ripped off? What should you do? You go to its kitchen and cook them a dish?
How many of us grow our own crops? Kill our own animals? We set up an economy so we can focus on what we are good at, and then we trade!
TLT dropped a lot today. On Wed last week it rose when the first tarriff news came out.
With funds unwinding now, we’ll probably see bonds continue to fall tomorrow.
Trump halts the crazy tariffs on other countries, except China. This is playing along the lines of that Chinese poster and Cloudflare CEO scenario.
But firms would still halt investment. It’s too uncertain to commit capital. Everything depends on the whim of one man. A stupid 80 year old man.
What he is saying, “Since you didn’t resist my r??ing, I would r??e you less and come back 90 days later.”
What Bill is saying is exactly what I am thinking… Now we know who are in which camps.
Thinking Aloud: Will some nations drop tariffs and VAT/GST/Sale tax to zero? What else can they replace the lost in tax revenue? USG has 10% tariff and State sale tax, other nations can’t afford (supposedly is fair 
) to offend Trump.
To really wall off China, you need to have these countries that US has low tariff with, all put up huge tariffs against China. Basically a US centered trade bloc, free inside the bloc, but all have huge barrier against China.
I still don’t think that’s Trump’s plan. Simply because he’s stupid and truly believe in tariffs. He blinked this time because markets tanked so bad and his people like Ackman and Elon are all applying pressure. Trump is a bully. He only understands force. You can’t reason with a bully. Just hit him where it hurts.
But China will still interpret this as a huge conspiracy against itself. Doesn’t matter if this is Trump’s intention or not. Getting off other countries’ throats but being even more hostile towards China further convinces Xi this is Trump’s plan all along.
We are escalating an already serious conflict between two nuclear powers. China is not Russia. Russia’s economy is about the size of Guangdong, a province in China.
The huge irony is that such a US centered trade bloc with China outside is exactly what we got in TPP that Obama and Hillary negotiated, and Trump tossed away. That’s why I still think Trump is just being stupid as always. He doesn’t have any grand geopolitical plan.
The Trans-Pacific Partnership (TPP) was a proposed trade agreement negotiated under President Barack Obama as part of his administration’s pivot to Asia. Announced in 2009, the TPP aimed to create a high-standard trade bloc among 12 Pacific Rim countries, representing nearly 40% of global GDP. Its objectives included boosting U.S. exports, supporting job creation, and establishing consistent rules for trade and investment across the region.
Key provisions included reducing tariffs, liberalizing services trade, strengthening intellectual property protections, and setting enforceable labor and environmental standards. It also introduced rules on e-commerce and fair competition between state-owned enterprises and private companies. Strategically, the TPP was designed to counter China’s growing influence by ensuring the U.S. shaped global trade rules.
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Perhaps no plan is an outstanding plan. Opponents will not get his plan.
Trump also want them to drop VAT/GST/Sale tax to zero. It will be hard for these countries to find alternative tax revenue. Btw, what you are describing is what I think will be eventually, ok, not exactly.
One useful thing that comes out of this is, whoever says this is the Dear Leader’s plan all along, is either dumb or lying. No need to consider what they say in the future.
84% is old news. What is the response to 125%?
WSJ:
A mere recession is obviously better than depression, but it’s wild that a sitting American President willingly push America into a recession of his own making.
Internment camp for Chinese is a very real possibility.
Decoupling with China will not only affect trade. It will also affect people. The Chinese government has already issued travel alert to its citizens, warning them of the danger traveling to the US. There will be fewer Chinese students coming to study in the US. Some lesser known small colleges depend on the money these students bring in. Some may go belly up.
Many college professors who came from China originally may choose to go back to China. Trump has been cutting their research funding, and many of his racist fans may soon be targeting the Chinese too.
