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Notes -
https://x.com/TrumpDailyPosts/status/1909263788295041257
https://x.com/unusual_whales/status/1909411006423392583
So the two biggest economies are now locked in a full-scale trade war... I suspect this will be more severe than previous skirmishing. In the past China imposed restrictions on imports of Australian wine, lobster and coal due to us calling for an inquiry into COVID. The Australian government basically ignored this without retaliating and eventually (with a change of govt over here to the less anti-Chinese Labour party) the restrictions were dropped. And they didn't touch iron ore, our biggest and most important export.
But nobody really cares about Australia, there's no loss of face in restoring trade relations like there would be with being seen to submit to Trump. You can show magnanimity to a weaker country but you probably can't show weakness to a peer power. Plus the US-China tariffs seem to be much more comprehensive, there's no shielded goods listed. I highly doubt that Xi will back down here like Trump seems to be asking. Giving a one day ultimatum is quite rude.
It seems that Trump's strategy is to shake down the US's weaker trading partners (the 'other countries which have requested meetings') and try to smash the stronger powers like China and possibly the EU. The EU might even fall into the 'weaker' category if Trump can link security to the trade relationship, Vance and co wanted to send Europe the bill for bombing Yemen since it was mostly European trade flowing through the Red Sea. The US has opportunities for leverage in terms of energy flows now that Russia is persona non grata and with defence via NATO. On the other hand, the EU is run by Trump-haters and they're hardened experts in economically wrecking their own countries, so they may show some backbone.
Anyway, who has more leverage between the US and China?
China's exports to the US ($500 billion) are mostly manufactured goods, electronics and machinery. These are ironically the things you'd need to industrialize the US, though a lot is also consumer goods. China dominates certain industries like port equipment as seen here: https://old.reddit.com/r/Unexpected/comments/11jsyyf/well_thats_unfortunate/
https://tradingeconomics.com/china/exports/united-states
The US's exports to China ($144 billion) are a mix of agriculture/energy and electronics (semiconductors are included in this category), aircraft, machinery.
https://tradingeconomics.com/united-states/exports/china
Personally I favour a supply-focused view of trade conflicts. If you're losing out on $500 billion worth of goods due to high tariffs (an additional 50% on top of the 34% and the previous tariffs really add up!) then that's worse than 34% or 84% if Xi matches on a mere $144 billion. Many of those goods will be prerequisites for US production. A much smaller proportion of Chinese imports will be prerequisites and soybeans/gas can be bought from elsewhere. Plus the Chinese approach to industrial policy seems much more sophisticated, they target key sectors to build up economies of scale. They foster development in high-tech industries with huge state backing. They do plenty on the supply side, tariffs only affect prices and demand. I think China is not too concerned about losing US imports, they want to replace them with indigenous suppliers on the high-end anyway and have been working hard to do this for years and years, that's Made in China 2025. There is no equivalent comprehensive program to reshore production in the US.
And if China loses some of their exports, at least they retain production capacity. Those mobile phones and plastic toys could go to Chinese kids instead.
I've seen others online favouring a demand-focused view, so there is room for difference on this (elasticity matters a lot).
I think China will come out ahead here unless Trump manages some crazy 4D chess bullying other nations into tariffing China too. China is the central hub of the world economy in terms of trade flows, their economy is larger in real terms and their political system seems to be more stable, less erratic.
Edit: https://x.com/typesfast/status/1909362292367802840
This seems even crazier if true, it's like Trump is deliberately trying to crash the US economy with these hasty, no-warning orders and fines. See the thread for details. This is how you don't do industrial policy.
My impression after obsessively monitoring this situation for days (of course) is that neither side will fold, tariffs are here to stay, and everyone will be poor and mad for it. China of course won't fold, the idea that they're at risk is preposterous, they can well weather complete cessation of export to the US.
Broadly I have concluded that the main problem the US faces is racism towards the Chinese; the ill-earned sense of centrality and irreplaceability. I believe that Trump, Navarro and the rest of that gang are as misinformed as the average MAGA guy on Twitter, given how they speak and that amusing formula. Americans still think that their great consumption is the linchpin of Chinese economy, 10-30% of their GDP (it's more like 3%); that the Chinese produce apparel, “trinkets” and low-quality materials (they also produce things that Americans plausibly cannot start producing at the same quality in years); that American IP is vital for their industry (they're making their own software, OSes, CPUs…) and so on. The idea that American de-industrialization is a product of betrayal by Wall Street Elites who offshored jobs to China also feeds into the delusional notion of possible parity – but the truth is that there has never been a point in history where American industry had scale or diversity comparable to what's going on in China now. The issue with their bad financials is also overblown; as for losing markets, they have the capital at hand for consumption stimulus. This guy from Beijing writes:
Accordingly, with a higher real GDP, their effective debt to GDP ratio may be as low as 150%, not 200-300%. They have US assets to sell too.
So China can trivially absorb half of the overcapacity freed by reduced trade with the US, and might find buyers for the rest.
My thesis is that in picking this fight, Americans don't understand that they're actually not that big of a deal. Unfortunately, their delusions are globally shared and become reality in their own right. But perhaps not enough to offset the gross physical one.
The actual dangerous thing for China here is that Trump seems determined to immiserate the whole planet, completely irrespective of any geopolitical rivalry, because he's an illiterate anarcho-primitivist and thinks that all trade is theft unless it's barter, basically. America vs. The World, especially with a chain reaction of tariffs on Chinese (and likely also Vietnamese etc…) capacity spillover, results in massive reduction of productivity for everyone. For now, nations like Vietnam are unilaterally dropping tariffs on American crap, but that can't be a big effect because their tariffs were low to begin with, and Americans just don't and cannot produce enough at price points that people of those nations can afford. (We may see IMF loans for 3rd world countries importing overpriced American beef or Teslas or whatever to placate Don, but I doubt it'll be sustainable). I suppose in the long run the idea is that Optimus bots will be churning out products with superhuman efficiency, at least Lutnick argues as much. But that's still years away. Perhaps this extortion of zero balance trade (so in effect, the demand that trading partners buy non-competitive American products) is meant to finance the transition to posthuman automated economy. Bold strategy.
I am of course very amused and curious to see how it'll go. Will Fortress America intimidate the rest of us into submission, likely forever? Or will it be so stubborn, brutal and ham-fisted that humanity will finally rebel and ostracize the rogue state, letting it broil in its own supremacist fantasies? Can Bessent et al. turn 1D “trade le bad” checkers of the King of Understanding Things (懂王) into 4D chess? We shall see.
Suppose you wake up tomorrow morning, and find that, worse than Gregor Samsa, your consciousness has been transmigrated into the skull of The Donald. Further, the divine agency enacting this alteration has placed an aegis upon you, such that you cannot blow your brains out in horror; for your many sins, you have been given the penance of wielding great power to Make Things Better.
What do you do? What does "better" look like, and how do you steer things to get there? Assume that, like Trump, you are not particularly bound by norms or even your own prior positions, that you have a great deal of sway over ~50% of the American public, and that you have more-or-less full control of the dominant political party which currently has tenuous control over all three branches of Government. What would the plan be?
I don't want my country to rule China. I certainly don't want to be ruled by them, but I stubbornly believe it's possible to step back from what I perceive to be a long-metastasizing American global empire and to move toward a world where we get our own country working and simply leave other people alone. I'm open to the idea that Trump is a swinish idiot and I am as well, but what does actual wisdom look like? Was it a good idea to help build China into the unrivaled manufacturing and arguably economic colossus that it currently seems to be? I'm pretty sure it wasn't a good idea to try to invade and destroy multiple other countries in the name of "spreading democracy", but maybe you disagree? Was Biden on the right track? Obama? Bush? Or if the string of presidents preceding Trump were all cold, merciless imperial manipulators and Trump is a moronic rampaging swine, can it really be that both of these things are perfectly equally awful, or is one in some way preferable to the other?
There's a thing you wrote one time, about how your people and mine could never be friends, that our relationship would always be conducted across gunsights. Maybe so. But I, at least, have zero desire to actually start shooting, and I perceive the people on my side who want to start shooting, who believe the conflict to be innate and existential, as the enemy that is innate and existential to me. Maybe this is naive. Maybe the perspective I perceive from you is correct, that everything is doomed and the evil always win, and no matter how things change they always change for the worse.
A year ago, the narrative was that Trump could not win, and that if he did win nothing would actually change. Now the narrative is that he's changing everything for the worse. Maybe so! I'm waiting to see what the next updates say, though.
There are so many things wrong with what Trump is doing that I find it silly to write a serious response. Literally an LLM would manage. For one thing, accept Von Der Leyen's offer of mutual tariff drop, that's enough of a “win” for your base and an actual economic boon! Apologize to Denmark and negotiate expanded military presence in Greenland under the existing framework. Offer China a mutual reduction in tariffs for sectors where you actually cannot back up your confidence. Tell Bukele to send back the wantonly arrested innocents for a fair trial. Stop gutting STEM research institutions. Crush or pay off the longshoremen, abolish Jones act. Buy a shitton of equipment for manufacturing drones. Put a few bombers on Guam instead of in Afghanistan, send a garrison onto Taiwan. It's not really complicated, he's done too many errors.
Many questions. Was it a good idea to help build China? Probably not, but was it a bad idea to exploit their growth for salvaging your own one? I guess not again. Invasions? I think that was dumb. Biden? Yes, I think that Biden, or rather the system behind his limp body, was highly effective in reaching at least some subset of relevant goals of the Empire, it was going pretty smoothly. I am surprised to see them so thoroughly vanquished so fast.
How to deescalate? Oh, that's a big one. I think it's psychologically impossible, the US isn't willing to be #2, even if that carries none or minimal material demerits. Neither is Xi willing to give up on his system, or on Taiwan. History will decide.
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What were “his people” and “your people”, in this context?
Russians and Anglos, IIRC. His framing, not mine, but the point seemed reasonable. Given our history, particularly post-USSR, I do not expect Russians to assume Anglos are pursuing cooperation with them in good faith.
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I can of course only speak for myself, and not the Trump administration, or even the "MAGA movement" as a whole.
IR policy wonks would say that this suggestion is nonsense; that any conflict between the US and China is just the rational, mechanistic outcome of two world powers who are both vying to secure their own interests. But for my part I will acknowledge that, yes, there is a racial element to the designation of China in particular as a geopolitical adversary, as opposed to some other nation. Ceteris paribus, I would prefer for world power to remain concentrated in the hands of European and European-derived peoples, as opposed to non-European peoples. (This is largely already a doomed project due to the ongoing mestizofiction of America, but, you know, you can't win 'em all...) And I particularly don't want power to rest with the Chinese, who have produced a civilization that (in its current phase of historical development at any rate) I view as uniquely soulless and utilitarian. (I do not view all non-Europeans, or even all East Asians, as exactly equivalent in this regard; if Japan were in China's position instead, I would be welcoming them as liberators!)
The Chinese, too, have a sense of centrality and irreplaceability. They too believe that they have a world historical mission to be the center of world civilization. Very well then, we shall see who prevails.
But all this only goes so far as influencing the fundamental choice to take up the conflict in the first place; it has no bearing on the strategic considerations for how the conflict should actually be navigated. China is obviously very powerful and capable, and it would be the height of foolishness to underestimate them as a nation of "trinket producers".
A change in American economic policy sent global markets into a tailspin, so objectively speaking, America is in fact a big deal.
Latinos are reasonably western euro, certainly moreso than Slavs.
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I can only say that engaging with the Chinese, and with people like you, has gradually convinced me that White People (Hajnali European stock specifically) are basically jumped-up serfs, the confused lower caste of prawns from District 9, with little more to offer to the world sans stale kanging and hollow, corporate-coded pretense of “soul” that, if it ever existed, resided in your currently extinct owners. You don't even notice my point about simple economics and logistics, so lost you are in your racial superiority masturbation. But of course those issues are related.
But it isn't, and you are largely responsible for that, because your previous generation had the exact same attitude towards the Japanese. Deaths from overwork, rigid hierarchy, soulless collectivist automatons cheating and copying to flood the markets and dispossess our Christian Germanic workers – this can't be allowed, can it? Oh, what a pity that now that we know them better, Japan is a geriatric country of no ambition, that mainly produces anime to give you some respite from the toxic antihuman sludge of your own media. (Presumably this is the fault of Joos. Somehow for all your natural nobility of spirit you are not capable of resisting a tiny tribe of natural wordcels. At least the Chinese managed to overthrow the Manchu).
Regrettably, China is 10 times larger and the same tricks won't work.
Yes, you can do a great deal of damage to humanity. This is akin to the bafflingly swinish line of argument that “China needs us more than we need them, because they need to sell their valuable manufactured goods to someone; our consumption is more valuable than production”. We shall see how well this philosophy works.
Speak for yourself, serf.
What I see is the inverse. The professional managerial class seems to have internalized this idea that intelligent reasonable moral people should not exercise agency.. That intelligent reasonable and moral person does not just do things, and if they do the inescapable conclusion is the individual in question is not reasonable, not intelligent, not moral, and possibly not even a person.
Ironically this valorization of non-agency and the demonizing of those like Elon Musk and Daniel Penney who break from this is itself the road to serfdom. The serf is a serf because he prefers the guarantees of servitude to the risks of being a free agent.
So how has this intelligent reasonable agency worked out for you? Not tired of winning yet?
It's actually been working out reasonably well. So no, I am not "tired of winning" yet.
Godspeed! More wins to come then.
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This is a better treatment: https://www.themotte.org/post/1827/culture-war-roundup-for-the-week/315895?context=8#context
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He's a spurned Russian nationalist who has run into the arms of the Chinese. A tragic outcome I don't wish of the Russians writ large. Being a serf isn't a problem so much as a traitor. Justifying that, welcoming the Chinese overlords, on the accusation of Europeans of being serfs is... interesting especially given this criticism is in context of the erratic behavior of high-agency people rocking the boat, like you said.
This is of course a projection of your own tribalism and your own deluded moral framework.
Your problem is that your only guiding light, the only salvation you see for your people, is Nazism, and Nazism is still quite degenerate and NGMI. I won't talk of its moral merits, it's just strategically bad because it's aestheticized desperation and refuge from hopelessness in animalistic impulses. A stronk chieftain (high agency!), will to power (rock the boat!), blood-based tribal identity, vibes over facts… in effect, reject modernity, retvrn by rolling back the evolutionary clock 9000 years, to where an average European was a fat bipolar slob with 65 IQ. Nazism was swiftly crushed by Capitalism and Communism. 80 years later, they remain the dominant forces on the planet and continue their dialectic and coevolution. You like to think that Judaism is still more important, the root of all evil. Well, it's underrated for obvious reasons, I'll give you that, but Earth is a big place, and your struggle with Joos is ultimately quite parochial.
I have observed many sincere Nazis over the years and most are suicidal. It doesn't have to be this way. Accept that the dream of Aryan greatness is dead, but you can live if you accept this world on its own terms, where your people have some advantages and disadvantages entirely irrespective of “jewish manipulation” or “suicidal empathy” or what have you, and need to manage them soberly. In particular this requires a good understanding of where you stand relative to that huge chunk of humanity in East Asia. One approach is to cope with 4chan gifs of tortured dogs and industrial accidents, or the book of Ralph Townsend. Another is to grow the fuck up.
And yet you run into the arms of National Socialism with Chinese Characteristics... No, Nazism is a dead political movement, not something to be treated as a cheap foreign import. I want to see something new, not trying to rehash a dead ideology, and certainly not turning traitor and running for the embrace of the Chinese who hold those same racial sensibilities you mock Europeans for, and which Europeans do not themselves actually hold.
You simultaneously mock Europeans for being "not capable of resisting a tiny tribe of natural wordcels" and for being parochial when they do voice resistance. You just hate Europeans, particularly the West Europeans, you see them as your enemy and you always have. It's unfortunate. Whatever you accuse me of, my hope for the future is fundamentally pro-European, I want the best for Europe and the United States and I do not want to see them under Chinese hegemony. That's not the future I wish for Russia either. You can mock the suicidal Nazis, I will mock the despondent Russian nationalists who have decided to become Chinese nationalists to have some sort of vent for their understandable but misguided hatred of Europe.
It's a funny joke but really, they're not any more National Socialist than any normal European state was before WWII. They are quite different from historical Nazis. They have a representation for minorities (even repressed ones) and affirmative action, they have legalized gender transition, they employ open furries in the PLA (explicitly as fursuit engineers, to develop next generation combat armor). Their notions of “degeneracy” or “racial hygiene” would be quite alien to Germans. The basic level of care for the ethnic majority is just what a state is supposed to do. And Socialism – that they owe to being literally Marxists, with a big portrait of Marx in their main hall of power and stuff. They're far more Capitalist than the Third Reich was, too. Xi has restored the cult of personality, though. Seriously speaking, it's its own complex thing, and should be considered on its own merits in its own historical context, not as a copy or a pastiche of Western paradigms. When all is said and done they're just a modernized Chinese empire.
I apologize. My sarcasm there may have been too confusing. I don't think Jews are solely guilty for the quality of your media. Jews, from what I can tell, genuinely like their sermonizing slop, but so does the audience, and creators are increasingly Gentiles too. I think you just have ran out of gas. Particularly Americans. Your culture is vulgar and plain bad, and you should feel bad about it. Your mavericks are sleazy hustlers at best and psychopaths at worst, and you do not resist your worst impulses to bow before the undeserving strongman. You come up with zany and harmful ideas and then force them upon everybody else. Thus, you are what has to be resisted now, at least until you improve somehow.
I don't hate Europeans. I am disappointed in you. In you collectively and in you, SecureSignals, personally. You are less than what I figured, you don't deliver on the crucial advertised open-mindedness and ability-to-change-opinions features, and you take pride in stuff that's completely meh or plainly disgusting. You're like some purebred dogs. Remarkable, peculiar, WEIRD phenotype, but no spark, or almost never. Disappointing.
And at the rate you're going, you may well see Chinese hegemony. It is indeed unfortunate because the Chinese themselves never had it in them to establish one, I don't think. Too insular, too mercantile, too autistically uncharismatic, and frankly not capable enough to dismantle natural affinities and alliances. They'd have secured their backyard and grew content to have limited trade with barbarians, and this was the scenario I still consider preferable. But a few more iterations of low-IQ, smug WINNING and ROCKING THE BOAT, and who knows, they may have to pick up the crown tossed their way.
And the ironic thing is that all this is because you'd have wanted your own hegemony, because for all the denialism – the dream, the hope of being Intrinsically Racially Superior, crushing lessers under the jackboot, still lives and yearns for confirmation. Alas.
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To the user who reported this comment with:
lol. Dase has been productively commenting since before you knew this forum existed.
That said, I’m going to remind him not to put words in other peoples’ mouths. Especially not with this level of sarcasm.
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An intellectual like yourself is no doubt familiar with the extensive Chinese online theories that they secretly control the CCP.
I do know this and I wonder how that coexists with the common East Asian respect for the Hebrews. Have they considered playing one great tribe against another? Or learning the Manchu ways to beat them at their own game, like Koreans try with Talmud? I should ask.
Some have crawled deeper into a similar rabbit hole and instead declare that China hasn't existed since the Song or the Ming.
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My own impression (and you are likely more familiar than I) is that most Chinese never think about the Jews, a smaller group of boomers and people interested in international politics are vaguely or in rare cases substantially philosemitic, and then young very right wing men online are antisemitic in a vintage /pol/ type way, hate Israel etc.
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No, I did notice your point about economics and logistics. But your point wasn't relevant. The likelihood of winning a conflict has little relevance to whether that conflict should be waged in the first place.
Ironically, and contrary to your accusation, it is the serf who acts in accordance with prudence and rationality. The serf is a serf precisely because he correctly calculates that servitude is what gives him the best odds of continued survival. The nobleman, in contrast, acts in accordance with virtue, even when the outcome is certain destruction.
A Nietzsche quote for every situation:
It actually has a lot of relevance. The real reason you act like it doesn't is that you do not seriously engage with the possibility of losing, and losing badly (losing what? To what degree? How many cards do you have left at the point of losing, and what terms can be negotiated?). People make unreasonable maximalist demands when they are assured of their invulnerability. You treat a great power conflict like another Middle Eastern adventure, “oh we found WMDs in this shithole, our Democracy will perish if we do not conquer it hue hue!”. It's an instinct that's hard to overcome after a century of uninterrupted wins and cost-free losses. The same Main Character Syndrome, coupled with low human capital in Trump team, explains decidedly suboptimal and cost-insensitive means that were chosen for prosecuting the conflict. Americans think they can afford anything, because that's recorded in their institutional DNA. But they have never fought a superior power, due to it never having existed prior to this day. So they have developed an auxiliary belief that the very fact of them antagonizing any power confirms it is inferior. It's hard to feel pity for such a narcissistic people.
In Imperial Russia, there was a trend when mujiks, LARPing as nobles, initiated duels over petty spats, murdering each other with axes; eventually the state had to put its boot down. Due to extremely low literacy rates they couldn't have plausibly cited Nietzsche when doing so, but I believe that they'd have appreciated your quote.
Self-serving, petulant, handwavy, shallowly aesthetic notions of virtue are cheap and easy to brandish in defense of one's animalistic impulses; any kind of impulsive retardation can be dressed up as a calling of aristocratic, virile masculine nature, there's a whole genre of extremely popular Western music about it, authored by the impromptu warrior aristocracy of the streets. Your own elite has been wiped out to such a degree that this whole discourse is vacuous, we can't consult with a living bearer of a tradition, only speculate. It is plausible that I am wrong and there's just never been any substance to the whole fraud.
America fought Britain twice and the Ottoman Empire once when they were far superior powers.
I know. This was a completely different America, it's like saying that Moscow was once conquered by Poles or something (Russians are very proud of that episode, thanks to propaganda in history lessons, but obviously there is no memory, institutional legacy or military tradition that survived) – a dim fact people learn in school. America that lives today was born in the Civil War and was fully formed in McKinley's era, probably. Since then, it was straight up dunking on weaker powers. With some tasteless underdog posturing from time to time, of course.
Really, very proud? Because, against all odds, it ended with Romanov dynasty rather than a Polish king, or did you mean to write 'Poles' there?
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Missed your writing. Glad you’ve rejoined us briefly in this transitional period while we no doubt wait for ASI to materialize and save/destroy us.
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I am well aware that losing is a live possibility, and I know exactly what losing would look like. Losing means a Guangxi Massacre in every American town and city. Losing means obliteration; losing means being consigned to the graveyard of civilizations. Still we press on.
Given that your deepest yearning is for technology to liberate us from life as it has existed hitherto, it is unsurprising that you find these values to be unintelligible.
It's not clear what must happen for the world to end up like this, but America is a nation of dreamers; I suppose you can effect even this result if you keep pressing on. However, my optimistic theory of American loss is that due to constant bluffing and irresponsible policy epilepsy the USD loses its status as reserve currency, your fraudulent markets deflate, your internal racial contradictions bloom, and after a while you get a lot quieter and less obnoxious as your living standards crash down to roughly Polish level, which is actually very neat and, given your current course, more than you deserve. The traffic to your shores dies down, as mandated by the Great Leader Donald Ieyasu Trump; the rest of humanity, free of the loathsome star-spangled yoke, peacefully trades and gets richer, while you lick your wounded pride and dream of revenge.
A median scenario is that you simply accept the existence of a bigger guy on the block (bloodlessly, or after trying your luck one last time in the South China Sea) and retreat to your hemisphere, living much the same lives as today.
And I suspect that you know this. But it's too painful to imagine such a world, a boring high-probability world where the sky didn't fall, but you're no longer the uncontested Main Character Nation. Visions of massacres and genocides are anesthetic in comparison, they return you to the familiar domain of Marvel movies. Any Avengers-Level Threat, by laws of narrative, ultimately gets defeated, so there really aren't any stakes or hard decisions to make this way.
That should be Iemitsu if you are looking for whoever enacted sakoku.
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I would happily accept either of these worlds. Certainly they sound much better than where things seemed to be heading as of last year.
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If china was just producing plastic junk it wouldn't be an issue. BYD can produce cars at a similar quality as American companies while using their enormous home market, their mineral and processing capacity and the fact that Chinese engineers cost 20% of what American engineers cost. Far more Chinese people in the 100-120 IQ range go into trades while the west unfortunately dumps low Iq people into these jobs while pushing the slightly above average into meaningless office jobs.
Free trade was great in 1950 when the US bought bananas and sold cars. It isn't great when almost everything can be produced in China, India, Poland or Vietnam. China can even compete with AI models and satellite systems. The US can't compete without tariffs. The US risks becoming a real estate bubble using debt to buy goods from Asia.
Free trade was based on American supremacy, the rise of tariffs is the US becoming one country among many. The US isn't a global empire any more, they are a sphere of influence and need to be self sufficient.
Also with covid and Ukraine we should have learned that self sufficiency is paramount and that the US shouldn't be dependent on convoluted global supply chains. Having several supply chains in the world with local suppliers is a lot less fragile.
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People do keep pointing out that Trump has had this fixation with tariffs and the US being screwed by the world for so long that Japan was his original target.
I have wondered if he simply slid China into that same niche and never updated anything else.
This whole thing is demented but if you imagine Trump is still in the 80s or 90s in his head fighting the trade war he never got to fight then, it makes a bit more sense.
This would actually make more sense yes. Allegedly, Trump’s Love for Tariffs Began in Japan’s ’80s Boom:
That's from 2019. If China is just a stand-in for Japan (which he also tariffed anyway), it is no wonder that he acts so brazenly. You can bully Japan with no repercussions. He can finally get back at them for that piano humiliation.
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Yes I agree, much of US GDP is nonsense, it's like an inverted pyramid with the manufacturing base too small and services too large. There are of course real services like R&D but there are also more or less fake services, HR training sessions and legal compliance, managing tax... There's real education and fake education, those schools in America where nobody can perform to grade level, useless or negative-value degrees...
Just because money is changing hands, it doesn't follow that it's a good thing. Fentanyl raises the GDP after all. Metrics of production should be prioritized over financial flows.
I don't think it's really possible for this to be true on a grand scale. After all, if the American GDP is in some way fake how come the median American can buy so much Chinese production with his or her dollars? The ratio of durable goods consumption to GDP in the US is not vastly lower than it was in the 60s, and that small decrease we would expect given that the average person obviously has many more 'consumer' services to spend his money on these days in a way that is obviously real consumption than he did in the 60s.
Consumption is indeed high but production is too low. That's my point. It's an unstable position to be in. There are lots of people in the US who are very wealthy and prosperous but shouldn't be.
Physical production? I don't see why this is a problem if service production rises to compensate (except for e.g. national security reasons which has nothing to do with whether some service jobs are 'fake' or not). Yes the US runs a BoT deficit but the durables deficit is like an order of magnitude bigger than the overall deficit - that is to say service exports wouldn't have to rise that much to eliminate the deficit, which would certainly be easier than trying only to boost physical goods exports in which the US obviously has far less comparative advantage, especially in mass production.
How could this even be true in an inter-country sense? If production is too low, what sustains consumption? Foreign investments in American instruments? But surely these prove that investors are satisfied in the likelihood that future American production, on which they are trading, will be able to make good their investment? Service exports would be the other candidate, but then these, if they are competitive on the open world market, clearly 'deserve' their price.
I don't really understand tbh, and I don't mean that in a rhetorical sense. How do you perceive the supposed 'instability' of the US position unravelling?
A lot of Americans have completely made-up jobs, working in DEI or consulting or HR, compliance (with bizarre laws), educating people with ridiculous nonsense... it's not productive activity. Some of those jobs are useful but much are not.
They're basically sucking wealth away from productive enterprises since they consume wealth but do not produce wealth. The US runs huge trade deficits to support a high level of prosperity, relying on the social construct of 'the US is the greatest country in the world, with the strongest military and the safest currency' so that people maintain confidence in the US dollar.
See this doesn't necessarily any problem with trade as such, as this is an internal dynamic - if regulation produces non-productive workers who piggyback off productive workers in 'real' sectors, it's just shuffling around the fruits of production among Americans.
If this is the explanation for how the US sustains non-productive work, how come other Western economies have observed a similar turn toward services?
I meant to say sucking wealth away from productive enterprises around the world. Suppose Zhang in Chongqing makes an iphone that goes to a product manager who doesn't do any useful work, just sits around in meetings all day. This is an unstable dynamic in my book. It would be unstable even within a country if you have a class of elites who laze around all day and a class of workers who make goods for them. When Onlyfans whores delight in their paid-off houses it incites a lot of resentment amongst people with shit jobs. Elites are supposed to lead wisely, that's why they're supposed to get goods from the workers.
Other Western countries are poorer than the US. Not everyone is cut out for productive work, there are internal status games and politics... But the US is unusually rich and has a high trade deficit, the US is the biggest offender. The rest of the West (with some exceptions, though German industry seems to be declining fast) is relying on prestige, not production. Degree mill universities, immigration ponzi schemes, selling enterprises overseas. Selling assets to pay for consumption is bad, profits and capabilities head overseas.
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Largely because China (like everyone else) is buying your assets and the USD is the global reserve currency.
Trump is doing what he can to fix this pathological situation, by being laser focused on goods.
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I don't know if I'll be able to find it, but I saw a clip of an interview (edit: or speech I guess) with Bukele, where he recounts how the world's (or El Salvador's) top economists' told him "nooo! you can't just arrest all the gangs, that will tank the GDP!".
EDIT: Found it
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Its not hard to pick out a few industries youre strong in. The only number there thats worth taking seriously for macro measures is electricity. And that still seems consistent with the 25% number - manufacturing generally needs more electricity than services, e.g. Icelands GDP is not actually underestimated. Theres an argument that services are BS and therefore Chinas economy really is better - but at that point, youre far enough from conventional economics that GDP is a questionable measure anyway.
But he actually argues that the Chinese services sector size is underestimated, by Chinese accounting mainly.
It's not a workshop country. The thesis isn't that they have a strong industry - everyone knows that.
If Chinas service economy is actually triple of what those numbers say, it gets you from 125% of US to ~155% - not a significant change to debt/GDP.
This is still propably a problem with the concept rather than the measurement - depending on how exactly PPP is defined, but just a few things being weirdly expensive it would likely miss. With housing especially, if you consider the value of location at all, its hard to see how international "quality" comparisons could be made.
Why are they not captured?
Fair. This author thinks that the real scale is Chinese economy is 2x of the US or more, all things considered.
I think American housing value is inflated by the peculiar, unique necessity of getting away from Undesirable People while still being in the vicinity of jobs, schools and other desirable factors.
For example, how do you compare the utility of a high-status American SUV and a noname Chinese SUV with some crazy AI-driven suspension or drone launch pad, especially if they do not meaningfully coexist on either market?
And how do you expect this fact to make its way into PPP determinations? I mean even aside the overton considerations, is there any way to say how much of US housing prices are due to this, beyond "I reckon"? At risk of meme-ing, if I said that living in a free and democratic country is valuable to consumers and this is reflected in the prices of the naturally limited houses-near-XYZ in such countries, how do we know youre right and Im wrong? Indicator measures arent useful if measuring them is epistemology-complete, which is why PPP is almost certainly defined in a way that cant detect these things.
Im sure this is true in some cases, but I dont think its true "across industries". And with services it seems like the default case - e.g. the "style of waiting" in everyday-grade european restaurants propably isnt offered in the US - so they propably have some strategy to capture it anyway
I think that if we are trying to genuinely compare apples to apples, PPP is inadequate between significantly different developed systems and we may indeed have to fall back to Marxism-Leninism and factors of production. In the end, what is being discussed is whether China will be able to finance their debt, and any analysis must have to backchain to the possibility to say anything about that.
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I might have missed an update, but have you changed your mind on this recently? A boiled-downed version of your opinion on the topic, that seems to be stored in my memory, is something to the effect of: China is doomed to be at the mercy of hypercompetent Anglo boomers who will rule the Earth for the foreseeable future. Or am I misremembering something?
No, you're correct. In fact, had the US continued the course it had just half a year ago, I'd still be largely holding this opinion. But the election of an illiterate boomer strongman does change matters. Xi also has managed to not do anything too self-defeating long enough. I admit I was wrong: the US does not have a functional elite to make appropriate use of its genuine (if transient) political, economic and technological advantages and keep the Chinaman down.
ASI may restore my faith in the previous model, but this is looking like a remote possibility.
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