When POTUS Trump announced high tariffs on Chinese goods, the Commies came back with retaliatory tariffs and all the New Economists (fresh from their discussions on vaccines) announced that oh noes we’re going to suffer because rare earth minerals etc.
Um, maybe not (some excerpts):
China Just ‘Folded’ in the Trade War
Beijing has ordered its airlines not to take delivery of Boeing aircraft, and the plane maker has now flown back, from China to the U.S., three 737 Max aircraft that were about to be delivered. Due to the long order backlogs at both Boeing and Airbus, this punishment imposes, as a practical matter, almost no cost on Boeing. Yet if Trump were to order Boeing not to deliver parts or provide services to Chinese airlines, China would soon have to ground a large number of its airliners.
However:
Companies in sectors including aviation and industrial chemicals said that some of their products had already been granted a reprieve, while local media reported that some semiconductors had been spared tariffs.
And the U.S. has the advantage because:
Unfortunately for Xi, he must make concessions. His economy is far smaller than America’s, and he is the one running large trade surpluses — China’s merchandise surplus last year against the U.S. was $295.4 billion, up 5.8% over 2023.
Worse, China’s economy is probably contracting, something evident from price indicators. The country is in a deflationary spiral: In March, the Consumer Price Index was down for the second-straight month and the Producer Price Index was down for the 30th consecutive month.
Meanwhile, China is in the middle of a slow-moving debt crisis, and Xi, having rejected consumption as the fundamental basis of the Chinese economy, must as a result export more to rescue the increasingly grim situation at home.
Trump has the right of it: the U.S. is the big dog in international trade, and all the cheap shit that China exports to the U.S. pales into insignificance compared to the vital stuff we export to them — aircraft parts, technology and chemicals which they can’t reproduce by stealing the technology or reverse engineering, because their manufacturing equipment and systems are incapable of doing so.
I don’t comment on the tariff thing much because a) the topic of macro-economics is, to put it mildly, not my strong suit and b) I suspect that Trump’s whole tariff initiative is part of a long game which I can’t figure out at the moment.
Especially when I read stuff like this:
President Donald Trump said Sunday that his tariff policy will substantially reduce, even completely eliminate, income taxes for some American workers.
Trump’s gang is full of big brains and even more experience, and given the 4D strategies constantly being used by the Trump Administration across so many spheres — economics, politics and even social — I’m left wondering whether the tariff thing should not be studied as a stand-alone initiative but as just part of a greater whole.
these trade negotiations with the US negotiators working for a stronger america are decades overdue. The course correction might be hard in the short term but I’m willing to suffer some so that my family can prosper in a few years.
Giving away the store to the ChiComs over the past 50 years certainly hasn’t worked so we must try something new.
The PRC has a rather robust counterfeit aviation parts industry.
I doubt tariffs will have that large of an impact in the short term.
The Donald is at his core a decades-experienced businessman. Having dealt with players in many cultures, he understands the Oriental ethos — you never get a straight answer from them. The Chinese have a culture spanning over 5 millennia; nothing remotely close exists in the Western Canon. They always play The Long Game.
The Chinese economy is imploding, slowly perhaps, but it’s circling the drain. The “one-child” policy has resulted in a workforce that’s ageing, not just from the obvious, but more alarmingly (for them) because of one of its unforeseen consequences — the shortage of young women in the population due to families opting to abort or kill baby girls. Young men in the culture are seen as more capable of supporting their elders in their dotage than are young women and are becoming frustrated with the lack of suitable mates.
Trump is trying to reverse the effects of feckless U.S. foreign policy over the past 75 years, both parties guilty (one more than the other it must be said), during which the Chinese economy prospered owing to the tech transfer which was required to do business in China as well as overt bribery of U.S. politicians (Bill and Hillary Clinton, call your offices). Do the math here: They have an ideographic language; the fastest Chinese typists writing in their own language can AT BEST do 5 words a minute. So for the most part they don’t do it anymore, they use English in business and technical correspondence.
China has not only an ageing demographic, they’re not getting to fleece Western businesses for the technical expertise they had to have to become a world economic player as comprehensively as they once did, and Trump wants to put a full stop to that as well.
All the screaming about tariffs is baloney, and most of the nomenclatura knows it. They’re not intended to be in place for the long haul; their purpose is to bring the various players to the bargaining table, and it’s worked in U.S. trade negotiations with over 100 countries so far. Even deeper in the weeds, which is almost never mentioned (intentionally so), is that for the most part they have indeed been “reciprocal”; “You slap duties on goods I ship to you, you’re getting it back in your face in kind.”
It’d be fair as well to recognize that for most of the countries in the Orient and Southeast Asia, and for damn sure almost ALL of Western Europe, their economies would still be no better than Third-World latrines without very heavy U.S. economic, infrastructure and technical support after World War II.
The Chinese economy as currently practiced has serious structural flaws and cannot be sustained for much longer, at least not without gigantic cultural upheavals (think “massive pogroms”). Their integration of state and business — which is about as succinct a definition of Fascism as I could offer — will inevitably fail owing to supply-demand and capitalization inefficiencies.
Xi’s hanging on to power by a thread and with the help of the firing squad, but he won’t live forever. He’s essentially eliminated all his rivals — as did Stalin in the ’30s — and left a vacuum of capable successors in the wake.