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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.
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.
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.
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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