China’s container bookings to plunge up to 60% as US tariffs wipe out trade.
https://t.co/90A7GGHqUV— South China Morning Post (@SCMPNews) April 16, 2025
Posted on 04/17/2025 8:14:24 PM PDT by SeekAndFind
In the tariff war between China and the United States, a lot of chatter in the Pravda Media is about Xi Jinping's defiance, his outreach to European countries and other less important but collectively significant developing countries, and his retaliatory moves against America.
They make it sound like China has a lot of cards to play in the trade war with America.
China has put civilian government officials on a "wartime footing” and ordered a diplomatic charm offensive aimed at encouraging other countries to push back against U.S. President Donald Trump’s tariffs. https://t.co/rZWU2zsARQ— The Japan Times (@japantimes) April 14, 2025
Collectively, these stories tell a tale: Donald Trump may have bitten off more than he can chew in his economic war with China. Trump's moves will hollow out the American middle class! Europe will choose China over the United States! We are doomed!
The Chinese are putting up a very brave front, until recently matching Trump's blow for blow and pointing to Chinese willingness to endure everything up to eating grass for a year to defeat their adversaries. The Chinese plan for the long term!
Yeah, well, not so much.
It all sounds impressive, and some pissed-off ally countries have even hinted at turning Chinaward as a response to what they consider a stab in the back from President Trump.
China’s container bookings to plunge up to 60% as US tariffs wipe out trade.
https://t.co/90A7GGHqUV— South China Morning Post (@SCMPNews) April 16, 2025
Except...Reality. Our ticked-off allies are acting like 6-year-old children angry at their parents, threatening to run away. As much as they resent the United States, they are utterly dependent upon us and chose to be so. They are militarily weak and have sputtering economies that rely on the US as an export market. The United States, not themselves, defends its sea lines of communication, and they all know that China is a predatory power and not a reliable economic partner.
"Experts say the relationship bt #Europe & #China is rooted in a decades-old reality: a Chinese marketplace effectively closed to many EU cos bc of regulatory burdens & the Party’s buttressing of Chinese cos...The EU trade deficit w/🇨🇳 was $332B in 2023"
https://t.co/iWkxZCMKbL— China Beige Book (@ChinaBeigeBook) April 16, 2025
The US not only represents 25% of the world economy, which is quite impressive in itself. But it has about 40% of the world's consumer spending. No manufacturer of consumer products can afford to turn their backs on the US. China may be an attractive market, but it is not sufficiently large enough to make a dent in their losses should the US close our markets to them.
Which brings us to China itself.
🟢🇺🇸The #US started the #tariffwar
--disrupting global trade and market stability🌎
🟢🇨🇳#China responded with necessary countermeasures
--to safeguard its rightful interests and uphold international fairness & justice.🛡
🟢🕊For real negotiations to work, the #US must --End "maximum pressure" tactics 🚫 --Stop threats & blackmail ⚠ --Commit to equal, respectful dialogue 🤝 with mutual benefits 💡
https://t.co/g6ANoIGrmr pic.twitter.com/RoHVzXO4K0— Chinese Embassy in US (@ChineseEmbinUS) April 16, 2025
All that bluster sounds good, but it hides a stark reality: their economy is utterly dependent on US consumption. As much power as they have over us--they can cause us temporary pain as we adjust to finding new suppliers--we have infinitely more over them. Even their holdings in US debt are a double-edged sword. The US has relied on China to purchase government bonds, but as the old saying goes--if you owe the bank a small amount of money, they have power over you. If you owe the bank a billion dollars, you have power over them.
The tariffs on China have been DEVASTATING. Not will be devastating. They are already devastating.
🚨SOLVENCY ISSUES: Xi Jinping cannot ‘wait out’ Donald Trump’s tariffs
China's economy is reeling from the impact of tariffs, and public discontent is growing. On Douyin, China's version of TikTok, videos show citizens openly criticizing the government's rigid stance on tariffs,… pic.twitter.com/rJQkrZfAVW— Project Constitution (@ProjectConstitu) April 16, 2025
SOLVENCY ISSUES: Xi Jinping cannot ‘wait out’ Donald Trump’s tariffs
China's economy is reeling from the impact of tariffs, and public discontent is growing. On Douyin, China's version of TikTok, videos show citizens openly criticizing the government's rigid stance on tariffs, with some even taking to the streets in protest. Chinese authorities are cracking down, forcibly dispersing crowds and suppressing evidence of unrest, but these efforts can only hold for so long. As joblessness and food shortages deepen, desperation is setting in, pushing people to the brink. China's heavy reliance on the U.S. market gives America the upper hand—we can outlast them until they yield or face internal upheaval, potentially threatening President Xi's leadership.
China's government is and appears quite strong because it is. But something can be both very strong and very brittle--meaning that it performs well until the moment it shatters. Think ceramics or glass, both of which can be very strong until the moment they shatter. They don't bend and spring back--they are good until the breaking point, and then boom.
Exclusive: The Trump administration plans to use ongoing tariff negotiations to pressure U.S. trading partners to limit their dealings with China https://t.co/8IvIESCzHK— The Wall Street Journal (@WSJ) April 16, 2025
China's government is not loved, but it is tolerated because it is strong and because it generally delivers on its major promise: economic growth, pulling a billion people out of poverty as quickly as possible.
Tariffs aren't just a threat to that strategy. If Trump really pushes, Xi Jinping's government is in real trouble, and not the kind of trouble that means a midterm loss or failure to get reelected. This is regime-threatening. Xi, who looked to be in the catbird seat, could be facing a collapse of his legitimacy as leader of China.
The U.S. plans to use tariff negotiations to pressure its trading partners into isolating China’s economy. In exchange for tariff reductions, nations may face demands to limit Chinese involvement in their markets, potentially weakening Beijing’s position ahead of future talks.
https://wsj.com/politics/policy/u-s-plans-to-use-tariff-negotiations-to-isolate-china-177d1528
U.S. Plans to Use Tariff Negotiations to Isolate China
The Trump administration plans to use ongoing tariff negotiations to pressure U.S. trading partners to limit their dealings with China, according to people with knowledge of the conversations.
The idea is to extract commitments from U.S. trading partners to isolate China’s economy in exchange for reductions in trade and tariff barriers imposed by the White House. U.S. officials plan to use negotiations with more than 70 nations to ask them to disallow China from shipping goods through their countries, prevent Chinese firms from locating in their territories to avoid U.S. tariffs, and not absorb China’s cheap industrial goods into their economies.
These measures are meant to put a dent in China’s already rickety economy and force Beijing to the negotiating table with less leverage ahead of potential talks between Trump and Chinese President Xi Jinping. The exact demands could vary widely by nation, given their degree of involvement with the Chinese economy.
The White House and Treasury didn’t respond to requests for comment.
U.S. officials have broached the idea in early talks with some countries, people familiar with the discussions said. Trump himself hinted at the strategy on Tuesday, telling Fox Noticias he would consider making countries choose between the U.S. and China in response to a question about Panama deciding not to renew its role in the Belt and Road Initiative, China’s global infrastructure program for developing nations.
One brain behind the strategy is Treasury Secretary Scott Bessent, who has taken a leading role in the trade negotiations since Trump announced a 90-day pause on reciprocal tariffs for most nations—but not China—on April 9.
Bessent pitched the idea to Trump during an April 6 meeting in Mar-a-Lago, saying that extracting concessions from U.S. trading partners could prevent Beijing and its firms from avoiding U.S. tariffs, export controls, and other economic measures.
The tactic is part of a larger strategy being pushed by Bessent to isolate the Chinese economy, which has gained traction among Trump officials recently. Debates over the scope and severity of U.S. tariffs are ongoing, but officials largely appear to agree with Bessent’s China plan.
It involves cutting China off from the U.S. economy with tariffs and potentially even cutting Chinese stocks out of U.S. exchanges. Bessent didn’t rule out the administration trying to delist Chinese stocks in a recent interview with Fox Business.
Still, the ultimate goal of the administration’s China policy isn’t yet clear.
Bessent has also said there is still room for talks on a potential trade deal between the U.S. and China. Such talks would have to involve Trump and Xi. White House press secretary Karoline Leavitt read a new statement from Trump during Tuesday’s press briefing suggesting a deal with China isn’t imminent.
“The ball is in China’s court. China needs to make a deal with us. We don’t have to make a deal with them. China wants what we have…the American consumer,” Leavitt said when reading Trump’s statement.
It is also not clear that the anti-China line has entered into negotiations with all nations. Some countries haven’t heard demands from U.S. negotiators related to China, say people familiar with the talks, though they acknowledge that negotiations remain in early stages. Many expect the Trump administration to raise China-related demands sooner or later.
Bessent has shown his desire for anti-China pledges from U.S. trading partners before. In late February, he said that Mexico had offered to match U.S. tariffs on China as part of negotiations over Trump’s tariffs on Mexico imposed because of the fentanyl trade. Bessent called Mexico’s offer a “nice gesture,” but the idea didn’t find much traction with the administration.
Since then, Bessent has taken a more central role in trade negotiations, assuming a lead in talks over reciprocal tariffs after Trump announced his 90-day pause on April 9. The Treasury secretary is slated to meet with Japan’s economic revitalization minister as soon as Wednesday and has laid out a list of nations he believes could soon reach deals with the U.S., including Japan, the U.K., Australia, South Korea, and India.
China is conducting its own trade diplomacy. This week, Xi traveled to Vietnam—a major U.S. trading partner hard-hit by Trump’s tariffs—and signed dozens of economic pledges with the Hanoi government.
China views Trump’s reciprocal trade gambit as an opportunity, Peter Harrell, the former senior director for international economics on Joe Biden’s National Security Council, said on a panel discussion at Georgetown Law on Tuesday.
But China’s ability to counteract U.S. trade policies is limited, Harrell said. While the U.S. remains a “massive net importer,” China is reducing its imports from the rest of the world and focusing on self-sufficiency.
China “isn’t going to replace the U.S. as a source of demand for the products that a bunch of these developing countries…make,” Harrell said. “So the economics of this are going to prove challenging for China, but I think we see them playing the politics of this reasonably savvily.”
pic.twitter.com/Id30hyyRHs— Spotlight on China (@spotlightoncn) April 17, 2025
The Trump administration plans to use ongoing tariff negotiations to pressure U.S. trading partners to limit their dealings with China, according to people with knowledge of the conversations.
The idea is to extract commitments from U.S. trading partners to isolate China’s economy in exchange for reductions in trade and tariff barriers imposed by the White House. U.S. officials plan to use negotiations with more than 70 nations to ask them to disallow China from shipping goods through their countries, prevent Chinese firms from locating in their territories to avoid U.S. tariffs, and not absorb China’s cheap industrial goods into their economies.
These measures are meant to put a dent in China’s already rickety economy and force Beijing to the negotiating table with less leverage ahead of potential talks between Trump and Chinese President Xi Jinping. The exact demands could vary widely by nation, given their degree of involvement with the Chinese economy.
China's strategy of growing its economic power and influence depends on a river of money with its headwaters in the United States. And its ability to make deals in countries not hostile to the United States is only possible because the US tolerates its moves and is committed to using only modest soft power to oppose the moves.
Donald Trump is not in a mood to tolerate expanding Chinese influence. Look at the Panama Canal port deals. Trump's goal is not so much to own the canal as to deny China influence in the region. China, not Panama, is the target.
In fact, most of Trump's seemingly bizarre foreign policy moves--Canada as the 51st state and annexing Greenland are about trying to change the political geography to keep China from gaining influence in the Arctic.
The flow of information out of China on economic performance since the tariffs hit is sparse, but I have been checking in on the social media chatter coming out of China, and the news is bleak. Consumer spending is down, export products are being sold at firesale prices, and business owners are locking doors and leaving employees unpaid. This is all chatter right now, but also likely true.
Trade wars suck for everybody involved, and when the cost of Chinese-made products go up there will be some pain here in the United States, whatever Trump and his people say.
But none of this pain will be an existential threat to Trump, the country, or the Republican Party. There will be a price to pay, but it will be modest in the longer term.
Not so for China. Their regime is under threat because their hand is much, much weaker. Weaker than Trump's and weaker than people think.
Of course, if China were a normal country, what Trump is doing would be a horrible policy. Generally speaking, destroying a trading partner's economy is both morally questionable and terrible for business. Normally you would cut a deal.
But China and the United States are heading for a war, and a big one at that. Xi Jinping has made that abundantly clear, and he has counted on making the US economy dependent on China to keep us cowed.
Trump is turning that logic on its head.
We were in China last month for three weeks. Rental prices are down there deals on various goods, I don’t know how much of that is attributable to the tariffs
Too bad you didn't stay there.
That's right!
It's how the whole mind control deal works, don't you see.
You flood the media and little minds with disaster and thug stories to get what you need. Think about the thugs we've spent $36 trillion of our hard-earned dollars creating, going back decades: Ho Chi Minh, Noriega, Ayatollah, Saddam, Slobodan Milošević, Gaddafi, Putin, and Xi.
Notice the pattern? First, create the monster and then attack! It works -- most of the time.
“I don’t know how much of that is attributable to the tariffs”
Appreciate the report. Probably a lot. They’ve been over-capacity and dumping goods in foreign markets for years. IMO they need to go thru a downturn to reset the domestic capital to sound economic activities, generating reliable income.
It’s the normal economic cycle of a production economy which the leadership can’t get its head around. So it will be much worse on the people than it should be.
The lengthy article illustrates beyond doubt that the writer has no clue about China. The author assumes Xi desires to maintain the status quo in world trade.
That is not the objective of Chairman Xi or the CCP. The economy must be completely destroyed, wrecked beyond recognition, before the new China Socialism form of purer Maoist communism can take control of it all.
The people of China must starve and literally die in order to achieve such a level of pain they cry out and welcome the CCP promised salvation and something to eat
Xi the Pooh is having mandarin red hats made up as we speak: MCNKA (Make China North Korea Again)
With a LOT of help from our own communist/leftist tyrants here in the U.S.
I heard a week or so ago that they were anchored offshore as during Covid.
In a Buyer/Seller relationship, who has the leverage? If the buyer can start manufacturing their own items, what is the implication to the seller?
F the ChiComs. We should have nuked Beijing in 2020.
Murdering bastards.
L
RE: In a Buyer/Seller relationship, who has the leverage?
Depends on the goods the buyer needs and whether or not the seller has them.
If there are alternatives to the seller, and the alternatives have enough capacity to replace the opposing seller, then the buyer has leverage. If the buyer can make them at a price equal to or lesser than the seller’s price, the buyer has leverage. But if it takes time for the buyer to create the business conditions to make the needed product, then the seller has temporary advantage.
Too many moving parts to make a judgment here, especially when it comes to critical minerals we need for defense equipment and other industries.
must be fentanyl causing your projection
# 2 and 3 pics not China methinks .
Politics in Asian countries resembles kindergarten. Saving face has the highest importance. This project failure is one epic face slap. Bringing it up often will help hasten the total tofu-dreg collapse of the CCP.
Everyone saw that building (to be) collapse.
I've been posting my theory for a long time (most recently here) that China is taking the long view with fentanyl in the United States.
I posted before that it's not just to destabilize our society, it's to kill our military before they become our military.I believe the fentanyl poisoning of our children is a part of the Chinese long-term warfare strategy.
Instead of fighting our troops in Taiwan and elsewhere in 10 years, they are killing off our future recruits today so they never get the chance to grow up and join the military.
They are strategically atrophying our military muscle by killing off the next generation of soldier. Then they will attack where ever they want.
-PJ
There's the rub.
Adding a price to goods purchased by people and companies that is given to a government is not a tax? Well. I stand corrected.In a fair-market economy, a tariff on a commodity that is under-priced (i.e., sold below cost) is not a tax, it is a fine.
Consider the case of the semiconductor-dumping from Japan in the 1980s, and then tell me whether you think the response is a tax.
In the United States it is illegal for a corporation to sell products below the costs to produce them in order to drive competitors out of the market. Large integrated corporations are not allowed to let the profits from one division (for example, soaps) offset the losses from another division (for example, paper products) in order to sell their paper-products below cost to drive rival single product paper manufactures out of business. This is called "predatory pricing" and is a violation of anti-trust laws.
In the 1980s, six Japanese semiconductor manufacturers (mainly NEC, Toshiba, Hitachi, and Oki) flooded the United States with cheap memory chips in order to drive American memory-chip manufacturers out of business and dominate the semiconductor market. They were essentially using American accounting laws against the American companies because they couldn't legally compete with the artificially reduced prices of the chips coming from Japan. In 1987, President Reagan imposed a 100% tariff on Japanese products sold in the United States, including televisions and personal computers until Japan changed their semiconductor pricing policies. However, by this time the damage to the American semiconductor industry was done.
Questions:
- Was the American consumer helped or harmed by the introduction of cheap memory chips?
- Is buying illegally priced semiconductors similar or not to buying a stolen piece of jewelry from a fence, for example?
- After buying illegally priced semiconductors from Japan, is it a "tax" on American consumers to bring those prices back in line with fair-market cost accounting practices or is it a fine on Americans who were purchasing illegally sold products in the past and are continuing to do so in the present?
Bringing this back to the present discussion, I'm not saying that BMW, for example, is illegally pricing their automobiles in the United States, though Germany is imposing a 10% tariff on American cars sold in Germany as a bar to competition in German.
The Chinese steel case is different. The Chinese government is subsidizing the cost of producing the steel, which results in predatory pricing of steel on the open market. Imposing a tariff on Chinese steel sold in the United States is not a tax on steel consumers, it is a fine on China for using antitrust practices against American consumers.
While the American consumer benefits from the lower cost of the subsided products, it is a form of stealing from American producers of similar products who, by law, cannot compete with the prices of steel from China. The tariffs are intended to penalize the consumers of these products to encourage them to buy different products instead, and failing that, to level the marketplace to keep American producers viable in the market until China can be convinced to stop their predatory pricing practices in the United States.
That is the essence of a trade war.
-PJ
Thanks for your input, but that begs the question— Is the US Government entirely free from the accusations of subsidizing certain industries like China is doing?
For instance, giving $7,500 in tax credits for incentivizing the adoption of electric vehicles ( benefitting TESLA of all companies ).
Also allocating $5 billion in taxpayer money for building a national EV charging network and additional funding for battery production and recycling.
The difference is that the subsidy is going to the consumer in the form of a rebate after the sale, not to the producer in the form of selling at a loss. In the former, the sale already occurred; in the latter, the future sale is speculative.
I don't think a scheme like that would work for a private company in China (if there are such things); this is a case of the company being owned by the government, so it costs what it costs and the losses are absorbed by the government.
When western governments subsidize industries with direct cash, it's usually to spur initial development of the industry where there wasn't one before in order to incentivize and promote its growth when it's in the nation's interest to have that industry. This is done to support a long-term desire to wean the country off of foreign dependency on that industry, not to drive competing companies out of business (despite those other company's eventual loss of market share). Once the industry becomes self-sufficient, the government subsidies are usually terminated.
Spending government money on infrastructure (like EV charging stations) might be a subsidy to promote the growth of EV cars (private oil companies built the gas stations, auto manufacturers did not), but I do think it would be better to subsidize the development of private charging station companies. This would likely be a new business subsector offshoot from the energy sector.
Whether existing oil companies add rows of charging stations next to their gas pumps (with the coordination of local utilities to provide the electricty), or new companies form to build standalone charging stations and related convenience stores modeled after gas stations to create a new subsector, this would be preferred to direct ownership of EV charging stations by the government. Subsidies in support of either model might be warranted, including working with electrical utilities to expand the "grid" to supply the electricty to for the growth of EV charging for either model.
Right now, Tesla built its own network of charging stations to promote distance travel. The government has been slow to build anything comparable. I'd like to see private charging companies grow to fill this need.
Just my top-of-mind thoughts...
-PJ
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