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US and China slash tariffs as trade war cools
It looks like we will experience a de-escalation of the tariff battle between the US and China.
How does this line up with your personal predictions for how this was going to proceed?
My belief was that both sides would maintain 100+% tariffs but exempt essentially everything that matters. This development shows that I was wrong and I don't understand something about the events that have occurred. Does anybody have any ideas on what I missed?
The tariff's hurt China too. For reasons I can only speculate, all I've ever heard about tariffs are that they are stupid when the US does it, and brilliant when other countries (especially China) do them to us to protect their industrial base. While there may be something to the specific circumstances that could support this narrative, it is rarely evident in the reporting. If you've ever been inoculated against Gell-Mann Amnesia, you'd detect a psyop going on here.
China has basically stopped even reporting financial figures, not even the fraudulent ones you need to read between the lines of. There is effectively no reliable information about how the tariff's are impacting China's economy. But rumors are coming out that it's manufacturing sector in panicking, with factories sitting idle and orders drying up. Even if reshoring is years away, companies literally cannot afford to order from China while the tariff's are in place. I was watching some of Gamer's Nexus's coverage of the tariffs, and companies were saying that with the tariff's they would lose $100+ selling a $100 PC case for example. So all they can do is shut down production and hope a solution presents itself. They haven't sold through their US stock (yet), but they sure as shit have cancelled their orders no matter what the penalty they have to pay.
I factored that in to my prediction when I made it. Do you think the situation over there is so dire that they can't even afford to try and save face?
They have state controlled media. They can always just lie. Also, they can just cheat on whatever deals they do make and brag about it. Maybe Trump won't even notice.
I donno man. Even before 2024 Trump, I've been seen weird "read between the lines" predictions that China's economy is secretly fucked. But I never know what to take seriously, because it's basically a choice between believing state run media, or cranks. One side says everything is amazing and they have 8% GDP growth, the other side says China is already in a recession.
Then again, they say the same thing about the US...
But I find it not impossible to believe that inside the black box that is the Chinese economy, the wheels already came off long ago and it's just barely holding together with chewing gum and rubber bands.
And the rubber bands were manufactured in China.
Unless China is absolutely fudging their population numbers to UNDERCOUNT their population drastically (which would be a galaxy-brained move) then they are absolutely fucked in the medium term. There is no way to counterbalance a population where there's a massive class of consumers (the old and decrepit) and not nearly enough producers (young-middle aged workers) to keep everyone at a reasonable standard of living.
Its baked in. The collapse will come, Wile-E-Coyote already ran off the cliff, but they may be able to keep him from looking down for a while with propaganda and manipulation, or manage the fall down better than expected.
The problem with all this nonsense (yours and @WhiningCoil's) is the projection of the degenerate American condition where somewhat organized 20th century things are next to impossible to do, so you have to rely on Bronze age factors like the proportion of – to a large extent functionally illiterate, obese, criminal and unhealthy, but at least physically mobile – population to kick the can down the road. Infrastructure cannot be adapted. Automation cannot be done, that's fake news, that'd require, like, electric engineering and other nerd shit that doesn't offer good P/E for the financial fraud class to get fat off. The olds will consume the surplus, or else revolt, because you cannot do anything against pensioners (eg provide very cheap industrialized welfare to have them shut up, or as @veqq says, just let them live out their lives in the naturally cheap countryside). Housing bubble will crash and bury the economy, because of course, the debt is secretly much higher than it seems, because Communists always lie with their fake statistics, we learned that from the Soviet Union, the previous “champion” of electronics exports and gacha games.
It's surreal to watch how their nation-scale companies like BYD operate, compare this to the shambolic, truly late Soviet bullshit going on in the US, and then observe all this Gordon Chang tier punditry. Their working age population is right now just short of 1 billion people. They're, it seems, overall higher quality people too, they live longer, ask for less and work harder. Tighter margins all around, higher efficiency of converting revenue to capex… There is, admittedly, a lot of population locked in agriculture and low-productivity sectors, so fine, the effective discrepancy in workforce might be “only” 5x. Do you seriously imagine that economies of scale in a nation with 5x the American workforce will amount to Wile-E-Coyote running off a cliff. Okay, I'll keep watching how it goes.
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They don't have much wealth. Because wages continue to increase quickly, the 30-40 year olds are sending their parents more money each year than their whole anemic pensions, while saving themselves (although what asset classes they can save substantial sums in, is questionable right now.) It's not like the US where e.g. retired UPS workers get pension adjustments over inflation while current workers don't and aren't on track to receive any such benefits. (Also, the Chinese old seem to return to/reside in the country side, living very cheaply and consuming even less than their paltry wealth would suggest, compared to the racket of e.g. US retirement homes.)
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Yes, there is. "Keep everyone at a reasonable standard of living" is not a requirement for what remains a Communist dictatorship.
But it is a requirement for ruling China. The communist party knows that its mandate comes from being able to "Keep everyone at a reasonable standard of living" ; in fact, the mandate for anyone ruling China, communist or not, is to fulfill that need.
If they can't guarentee reasonable standards of living, then revolution and uprisings are on the table.
That it is not, as Mao demonstrated.
It is perhaps more accurate to consider the pre- and post-Mao CCP as entities that share continuity but otherwise represents a break, in the same way that the Tang overthrew the Sui in the 6th century (after the Sui were bankrupting the country to invade Goguryeo) but essentially retained its edit: broad institutions and ministries.
One important thing to note about the Mandate of Heaven is that it is less extensive than the divine right of kings elsewhere in the world. The right to rebellion is explicitly written into the Mandate of Heaven.
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I mean, compared to the disasters and mismanagement that occurred pre-mao, the great leap forward really isn't that much worse. Regardless, Deng came to power right after and instituted his reforms; I'd say a prolonged period of mismanagement would have definitely sparked another revolution.
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I don't know about "secretly fucked". But they are very dependent on exports, and the US is their second largest market (after the E.U.), so whether they were fucked before or not, the tariffs fuck them now.
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