China vs US trade war

2,492 Views | 16 Replies | Last: 8 mo ago by Dr. Doctor
jamey
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4:41p, 4/17/25
AG
Anyone have any insights on who has the upper hand here?

Just about everything I've found online seems to come woth a healthy dose of whether it's a D or R news source but I'm just interested in the business end of tariffs and who holds the leverage


Ran across this, which seems level headed


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FobTies
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5:30p, 4/17/25
The US has much shorter patience and pain threshold. China knows midterms are right around the corner and the MSM will work against Trump. They also prefer to sit back chanting "Jer-ry.. Jer-ry.. Jer-ry" while Powell and Trump fued.

It's more likely the CCP sits on their hands, ultimately making small concessions that Trump spins as a huge victory. But, there is an outside chance they dump bonds or mortgage backed securities if things escalate too far.
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jamey
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5:36p, 4/17/25
AG
No doubt the US can vote their way out of the economic pain while China can eat dirt and see if.thst helps


I've seem where China may also withhold rare earth's which they're the kings.
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Dave Robicheaux
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9:27p, 4/17/25
AG
Listen to VDH everyday
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bigtruckguy3500
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11:23p, 4/17/25
I'm not super smart when it comes to this stuff, but I think China has a lot more tools in fighting a trade war.
  • They can very easily manipulate the value of their currency
  • They are not a democracy, and can thus do whatever they want
  • They can subsidize their industries
  • They can and do ship products through 3rd countries to take advantage of lower tariffs through them
  • Their consumers have far higher tolerance for discomfort than the average American
  • Their consumer class is increasingly able to purchase their own goods
  • China has already stated no rare earth minerals to the US
  • There are a lot of products that have no domestic alternative. They're almost exclusively made in China, perhaps a few alternatives world wide, but not enough to fill the US market demand - those products will cause the average American a lot of discomfort

I'm not opposed to negotiating reduced tariffs, or imposing tariffs with a clear strategy. But it appears as though there is no strategy here. Or maybe the strategy is to be unpredictable and scare China that way. Maybe we realized that engaging in a trade war with the whole world at once only motivates other countries to form alliances against us.

In my opinion, blanket tariffs are dumb. Tariffs are used to level the playing field, or to protect your national industries. If we want to export widgets to China, and they make their own widgets, and put a tariff on our widgets, then we find something they export to the US, an state "we're going to tariff this, unless you take the tariffs off our widgets."

So the question is, what do we export to China that they put tariffs on? What new markets will open or grow if they drop tariffs on all American goods? Conversely, if we drop all tariffs on Chinese goods, how will that affect our local industries?

All that being said, we have the largest economy in the world, and the most consumeristic and wasteful society in the world. Everyone wants to sell us stuff, and we want to buy from everyone. That does give us a good bit of bargaining power.
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stallion6
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In reply to FobTies • 7:53a, 4/18/25
AG
FobTies said:
The US has much shorter patience and pain threshold. China knows midterms are right around the corner and the MSM will work against Trump. They also prefer to sit back chanting "Jer-ry.. Jer-ry.. Jer-ry" while Powell and Trump fued.

It's more likely the CCP sits on their hands, ultimately making small concessions that Trump spins as a huge victory. But, there is an outside chance they dump bonds or mortgage backed securities if things escalate too far.
Do you really think Trump cares about the midterms? US absolutely has the upper hand due to trade deficit alone. It will be interesting to see who blinks first.
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YouBet
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In reply to bigtruckguy3500 • 8:07a, 4/18/25
AG
There is a point of diminishing returns here though.

People said the same thing about the USSR....until it collapsed almost overnight.
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JDCAG (NOT Colin)
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In reply to stallion6 • 10:54a, 4/18/25
AG
stallion6 said:
FobTies said:
The US has much shorter patience and pain threshold. China knows midterms are right around the corner and the MSM will work against Trump. They also prefer to sit back chanting "Jer-ry.. Jer-ry.. Jer-ry" while Powell and Trump fued.

It's more likely the CCP sits on their hands, ultimately making small concessions that Trump spins as a huge victory. But, there is an outside chance they dump bonds or mortgage backed securities if things escalate too far.
Do you really think Trump cares about the midterms? US absolutely has the upper hand due to trade deficit alone. It will be interesting to see who blinks first.


Trump absolutely cares about mid-terms.
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jamey
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In reply to stallion6 • 11:41a, 4/18/25
AG
stallion6 said:
FobTies said:
The US has much shorter patience and pain threshold. China knows midterms are right around the corner and the MSM will work against Trump. They also prefer to sit back chanting "Jer-ry.. Jer-ry.. Jer-ry" while Powell and Trump fued.

It's more likely the CCP sits on their hands, ultimately making small concessions that Trump spins as a huge victory. But, there is an outside chance they dump bonds or mortgage backed securities if things escalate too far.
Do you really think Trump cares about the midterms? US absolutely has the upper hand due to trade deficit alone. It will be interesting to see who blinks first.


We have the upper hand financially


But ultimately I think its a matter of pain tolerance

We can vote, mid terms for example

The Chinese have nothing, other than some massive uprising to force Xi out, or his assassination. It's not like he hasn't been disappearing people forever
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Dr. Doctor
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2:59p, 4/18/25
AG


This tells me we are in for a bit of pain if we continue down this path. China not so much.

~egon
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jamey
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10:05p, 4/20/25
AG
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Sims
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In reply to Dr. Doctor • 8:58a, 4/21/25
AG
Dr. Doctor said:


This tells me we are in for a bit of pain if we continue down this path. China not so much.

~egon
Deflationary pain is actually a more bitter pill to swallow - so China pay be in for more pain.

If we have to go look for another supplier, or ourselves, that will mean higher prices for sure. It will also give someone else the opportunity to step in as a lower cost supplier (compared to ourselves or our next supplier) and hold that inflationary pressure down to some degree.

On the other side, China won't be able to go find another customer that can pay the same price as the US given China is going to have to look for one. So they are facing deflationary pressures which could result in decreased demand, decreased production and potentially stagnation or recession. For a command & control econonmy, this means they have to artificially keep production up to a larger degree than they already are.

I think there will be pain on both sides. I also think there is a much finer line to walk for China than there is for the US to reach a decent outcome for their populace.
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Aggie1205
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In reply to jamey • 1:43p, 4/21/25
AG
jamey said:


If it feels like it can handle the pain, China could refuse to sell raw materials to the other countries in SE Asia to manufacture with, as even companies that have opened plants in Vietnam, Cambodia, etc need to source many common consumer goods raw materials from China. This would mean no source for many goods for retailers thus leading to a bunch of difficult decisions and likely more retailers going out of business.
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jamey
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4:10p, 4/24/25
AG
These guys seem to think China won't do a deal and if theres a deal it's because Trump folded


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traxter
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In reply to jamey • 12:51a, 4/29/25
I'm not sure if it's media fear mongering, or if it'll truly play out, but supposedly Trump is being warned of empty shelves soon and that has him scared. I feel as though there will reach a tipping point where either we turn around and avert a major recession, or we go over and no one is able to reverse the damage.

And what I mean by that is once people start losing jobs because businesses are preparing for decreased revenue, then people will start changing spending habits, and will start falling further behind on their mortgage than they already are. Which will start a positive feedback loop, by which tings just continue to spiral.

Honestly, I wouldn't mind if the economy just stayed flat. No better, no worse. Allow me to continue invest a lot of money into my retirment and stuff. Then in like a year or two start coming back up. But that's selfish of me.

Either way, if things don't improve soon, Nov 26 will be a blood bath for republicans.
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Sims
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In reply to traxter • 8:03a, 4/29/25
AG
traxter said:
I'm not sure if it's media fear mongering, or if it'll truly play out, but supposedly Trump is being warned of empty shelves soon and that has him scared. I feel as though there will reach a tipping point where either we turn around and avert a major recession, or we go over and no one is able to reverse the damage.

And what I mean by that is once people start losing jobs because businesses are preparing for decreased revenue, then people will start changing spending habits, and will start falling further behind on their mortgage than they already are. Which will start a positive feedback loop, by which tings just continue to spiral.

Honestly, I wouldn't mind if the economy just stayed flat. No better, no worse. Allow me to continue invest a lot of money into my retirment and stuff. Then in like a year or two start coming back up. But that's selfish of me.

Either way, if things don't improve soon, Nov 26 will be a blood bath for republicans.

I think a lot of the tone adjustment you see from Trump has to do with a level of trust and comfort being gained by Bessent. If you'll notice, Trump has been referring lately to him as "Scott" rather than names leaning toward an official or formal capacity. At the end of the day, this trade war isn't Trump vs Xi, it's Bessent vs Xi. We'd be very wise to have Trump start to focus on coalition building of Americans - as difficult as that becomes with duplicitous, American fatalist media.

It's going to have to come down to a populist leaning voter to keep Republicans moving forward. Your third paragraph is a perfect microcosm of the group of Republicans who, unfortunately, will defect in the midterms out a sense of selfish comfort (no offense intended, just mirroring your sentiment). Trumps going to have to keep the pulse of the ones who currently aren't comfortable and getting less so and then judge how much is too much.

At the end of the day, Trump and his team had to move fast and had to accept that it would appear chaotic. They could have moved "thoughfully and strategically" but that is Adminsitrative State code words for status quo, unproductive and illusion of progress.
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Dr. Doctor
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In reply to Sims • 10:19a, 4/29/25
AG
I don't think there'll be deflationary on China's side. Or, more of, I don't see wide-scale deflation. Sure, the 800 TEQs of cheap toys can't go to Indonesia that were bound for the US, but you could ship it to Mexico (or another country that has less tariffs), relabel it, then ship to the US. Will it raise prices? Sure. But the delay in some materials, I think, will cool the overall trade. What if halloween items come 3 weeks later? What if Xmas decorations come 2 days after Xmas? That will be more damaging to the economy for both vs. a heavy machine coming in 3 weeks late for a plant.

But I also see China moving production and demands to other needs. Remember, India and China hate each other. While India is not going to replace the US overnight, repairing the tensions on their end can help with some of the losses from the US.

Where is the US going to get the 'cheap, quick and easy' labor that China has built up over 30 (40+) years tomorrow?

~egon
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