Tariffs Catch-All

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dcphx said:
I'm not sure China has as much "hunkering-down potential" as you do. My understanding is that China cannot operate (ie feed their population) without substantial imports of both fuel and food including fertilizer. China can be cut off from important supplies via sanctions and blockade far outside the short operating range of the Chinese Navy. However, that would require cooperation from our many allies and trading partners that Trump just told to go screw. There is also the very real probability that such an act could quickly turn into a shooting war.
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Well, I don't know all that much about the hunkering down potential in total. I was merely referring to the idea that China can deprive their citizens of material goods and they are powerless to stop it, whereas the American government has a very hard time doing that.

Nobody will back up the US for sanctions on China. It's too important a trading partner for basically everyone. That was true Jan 1 of this year. Now, it seems unlikely that anyone will back US sanctions at all unless they agree.

Today I saw some article saying that Trump was hoping to use tariff pressure to get other countries to get behind a China boycott. LOL. He has no idea how people work, does he? He certainly doesn't understand international politics. Absolutely nobody is going to get behind a China boycott because Trump threatens them with tariffs.
 


So … no deal? Look, purely selfishly, I want them to figure this out and not tank the economy. I want to retire in the relatively mid-term (next 3-5 years tops) and I don’t want these incompetents blowing that up, TBH.


That said, from a purely POLITICAL STRATEGIST POV, you don’t put the POTUS in a room with representatives from another country, particularly non-peers in terms of title, unless you are certain to walk out with a deal s/he can tout. You just don’t.
 
Oh, he be touting. Did you not reas about the bigly progress? MAGA will eat that up. That's all they need, so much winning for them.

Then reality sets in for them in approximately 4 to 6 weeks.

And don't worry about retirement nyc, full recovery long before you retire. Hell, we made it out of the Great Recession, worst economy and markets of our lifetimes. Unless you were 100% in growth stocks (and diversified), you were back to even in 2 years or less. Then it took off like a rocket.
 
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“… Bessent said earlier that exchange rates could be on the agenda but Ryosei Akazawa said neither side took up the topic.“
 
dcphx said:
I'm not sure China has as much "hunkering-down potential" as you do. My understanding is that China cannot operate (ie feed their population) without substantial imports of both fuel and food including fertilizer. China can be cut off from important supplies via sanctions and blockade far outside the short operating range of the Chinese Navy. However, that would require cooperation from our many allies and trading partners that Trump just told to go screw. There is also the very real probability that such an act could quickly turn into a shooting war.

I've long felt that China isn't built to wage military war, they wage war via business and economics. In that light, January 20th, 2025 might as well have been September 1, 1939.
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"Hunkering-down potential". I seem to recall that during the covid lockdowns, they had tremendous hunkering down stamina. Under Xi, it seems it takes a huge amount of pressure for him to do a U-turn.
 
Kraftyheel89 said:
And don't worry about retirement nyc, full recovery long before you retire. Hell, we made it out of the Great Recession, worst economy and markets of our lifetimes. Unless you were 100% in growth stocks (and diversified), you were back to even in 2 years or less. Then it took off like a rocket.
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Really, Trump is doing the same supply chain breakdown that he did last time with covid. He didn't fix it last time. It took a different President to do that. If Trump actually fixes it before his term runs out, then that's a pretty bad indicator how the next Presidential election will go.
 
I see the EU central bank is cutting interest rates. So how will that affect our bond market since that seems to be a point of major concern?
 
BlueSmoke said:
"Hunkering-down potential". I seem to recall that during the covid lockdowns, they had tremendous hunkering down stamina. Under Xi, it seems it takes a huge amount of pressure for him to do a U-turn.
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From what I understand, Chinese state media have been prepping the country for economic war against the US, and so the populace (at least those who consume news media) look at it as a badge of honor to sacrifice for the good of the country.
 
BlueSmoke said:
I see the EU central bank is cutting interest rates. So how will that affect our bond market since that seems to be a point of major concern?
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Ordinarily, it would be expected to somewhat weaken the Euro against the US Dollar and dampen interest in the EU bonds due to assumed downward pressure on those yields, increasing the relative strength of the dollar and driving more investors to buy US Treasuries, but things are so out of kilter at the moment and this rate cut was so widely anticipated/baked into expectations anyway, who knows?
 
heelslegup said:
www.csis.org

The Consequences of China’s New Rare Earths Export Restrictions

China has imposed export restrictions on seven rare earth elements and magnets in retaliation for new U.S. tariffs. These materials are vital to defense technologies, but the United States is entirely dependent on China for their supply.
www.csis.org www.csis.org
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Trump is going about it in a stupid way but I will give him some credit in that we should have never allowed ourselves to be so reliant on China for these things.

The solution would be subsidies to build up US capacity for security purposes or at least create a reserve.

The dumbest move is what Trump is doing.
 
ChapelHillSooner said:
Trump is going about it in a stupid way but I will give him some credit in that we should have never allowed ourselves to be so reliant on China for these things.

The solution would be subsidies to build up US capacity for security purposes or at least create a reserve.

The dumbest move is what Trump is doing.
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Seems to me the better strategy would have been a Marshall Plan-like initiative in Africa, where these rare earth minerals are in abundance. We didn't do that, though (I can't imagine why), and we've now essentially ceded Africa to China via its Belt and Road Project. I don't blame Africa for jumping on China's capital, but it puts the entire continent in the hands of a modern day King Leopold, when we could have been working closely with them for our mutual benefit.
 
lawtig02 said:
Seems to me the better strategy would have been a Marshall Plan-like initiative in Africa, where these rare earth minerals are in abundance. We didn't do that, though (I can't imagine why), and we've now essentially ceded Africa to China via its Belt and Road Project. I don't blame Africa for jumping on China's capital, but it puts the entire continent in the hands of a modern day King Leopold, when we could have been working closely with them for our mutual benefit.
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That too but it is my understanding that we have plenty of them just not the mining and infrastructure to do so. There is also the environmental impact.
 
ChapelHillSooner said:
That too but it is my understanding that we have plenty of them just not the mining and infrastructure to do so. There is also the environmental impact.
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No, you're right, and I was too broad and sarcastic with my initial post. One of the reasons this whole China thing is overblown is because of how many rare earth minerals we get from Africa rather than China. My son is doing a project on this right now and it astonished me how reliant we are on Africa. But my takeaway from that was:

(1) How incredibly stupid it is (across multiple administrations) that we haven't launched a corollary to China's BAR initiative, but focused on economic and environmental justice;
(2) How even more incredibly stupid it is (under Trump II) that we're cutting USAID and such a huge percentage of our humanitarian aid to Africa at a time when China is wooing them more and more every day; and
(3) How even MORE incredibly stupid it is that Trump II would be revoking green cards from people like South Sudanese, which is almost certain to drive these highly vulnerable countries into China's sphere of influence.

Now, we don't get may rare earth minerals from South Sudan right now. But we get tons of them from Botswana, Mozambique, DRC, Burundi, Gabon. If it's South Sudan now, why would it not be those countries next? And who knows what underlying resources could bring South Sudan from a state of existential war and calamity into a modern nation? One of my great frustrations with Trump and MAGA is they can't seem to think more than two minutes into the future. Their worldview is 90% past, 9.9% present, and 0.1% future. And we're not operating in a vacuum. The Marshall Plan was insanely expensive, but there's no doubt whatsoever it was the best investment in the history of the modern geopolitical world. Why would we not learn from the good parts of history as well as the bad?
 
An even better solution would have been to use low-interest loans and subsidies to encourage US and foreogn companies to solvew raare earths and expand manuf in the US. As Biden was doing. Just expand those efforts and avoid the destrictive tariffs which were done mostly to subsidize a tax break for high net worth individuals and corps who would be fine with a 25% rather than 21% max tax rate.
 
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