I just posted the below as a comment but I figured I’d start a thread, too, because I’m curious and I feel like a week of obsessive news reading hasn’t really shed any clarity on anything.
Now that China has refused to back down from Trump’s escalation, I’m wondering how Trump is going to wiggle out of this one. He can announce a 90 day pause with some lie about how China begged him to come to the table to save face domestically, but that maneuver might not actually bring China to negotiations. China seems to be in “never interrupt your opponent when he is making a mistake” mode and I don’t see them responding to something like a temporary pause.
The pro tariff crowd seems to be thinking that China will go into a recession before the US does, so the US will win the game of chicken, but China probably has more options for responding to a recession, especially given the fact that the government isn’t a bunch of idiotic, bumbling aristocrats and the flight from the US bond market has continued. No one is going to want to lend us the money it’ll take to weather a serious downturn given the fact that we’re run by crazy people.
So, assuming Trump is made to see the warning lights again, what does he ask for? He has jiu-jitsu’d himself into a no-win position because reshoring all of the manufacturing that left four decades ago is a nonstarter. I guess he could demand that China agrees to import a certain amount of US goods to lower the trade deficit, but they made that offer last time and then immediately ignored it because why wouldn’t they? It’s unenforceable because any retaliatory action the US could take brings us right back here. So what is a non-idiotic offer to China to get talks started? What will their opening demands be?
None of that matters. He’s speedrunning to multipolarity because in the case of a peaceful (relatively) unipolar world, a country in a better position to dominate global trade becomes the new pole rather than having everything break down.
Doing tariffs on everyone then only on China but to the max forces everyone else to pick sides which creates a multipolar world. If he didn’t do tariffs there would just be a shift to China as the pole slow enough that every player including the us would realign themselves to keep trade going.
It’s not good, but it’s whats happening.
He is still doing tariffs on everyone
Much less of tariffs on everyone.
A modest import tariff can actually encourage both nations to develop or have a bunch of other outcomes. A big ol tariff shuts down trade between two countries and requires that both develop trade relationships with other nations that make up for the missing goods.
Both the us and China can get along without* each other, but it’s gonna make other countries have to develop to cover those gaps.
If you’re about to buy a cell phone, get an iphone before they send production back to India. They had to move it from there back to China because the Indian facilities were too contaminated for electronics assembly yields at the microscopic scale apple was doing.