6 ms·

It's worth pointing out that China has been preparing for this exact trade war since 2016, when Trump first threatened it. And they have fairly good centralized

It's worth pointing out that China has been preparing for this exact trade war since 2016, when Trump first threatened it. And they have fairly good centralized command structure to force individual businesses to prepare for things like this. China is the primary target of the war, even if Trump thinks that trade imbalances with Vietnam are also theft from the US, as he frequently and loudly says. The administration has lots of China hawks, it does not have any Vietnam hawks. Additionally, China is much better prepared for a trade war in that it has a populace that has been very well conditioned to go through hardship for longer term wins. The US does not, and there will be massive revolt for small hardship, or even the perception of hardship. This is largely why Harris lost: she was blamed for the inflation under Biden, even though the US did far better than the rest of the world economically for the period 2021-2024. The prior trade war with China was short and inconsequential, Trump could buy off the farmers who were really hurt by it with less than a dollar sum of 10-11 digits. That won't be possible with the trade war that's currently planned, and the effects will be large enough to cause large inflation, while simultaneously providing zero methods for investors to safely build US-based production capacity. The US has benefitted for a couple generations by being the reserve currency, meaning that we can make big mistakes and not suffer for them, while any other country would suffer. This coming trade war, if it actually happens, may finally break this exceptional status.

ericmay 2y ago
As much as China can prepare, it's still in a pretty vulnerable position and the whole "the Chinese people are more conditioned for hardship" is as much Chinese exceptionalism as any claim to American exceptionalism. At the end of the day they lose millions of jobs, factories shut down, and people suffer there too regardless of the CCP marketing about being "tough" and "prepared". Appear strong where you are weak or something like that. Meanwhile the US can see prices go up, but aside from a few specific items we can buy or make the things that China has been. At an increased cost, sure, but Americans can handle it. > The US has benefitted for a couple generations by being the reserve currency, meaning that we can make big mistakes and not suffer for them, while any other country would suffer. This coming trade war, if it actually happens, may finally break this exceptional status. Very doubtful. The main danger is lack of fortitude with continuing and enforcing policies, and letting ideological battles get the best of the Trump administration for cutting good and fair deals with the EU and others. You're welcome to invest in Chinese, Russian, or whatever capital markets, though.
- skywhopper 2y ago
  We can “buy or make the things China has been”? Buy from whom? Make in what factories, with what workers, with what supplies, equipment, and materials?
  - ericmay 2y ago
    Ok if we can't then you're proving the need for economic and policy measures to make it so we can. But yes, instead of buying a made in China t-shirt you can just spend a little more and buy one made in the USA, or even other non-authoritarian governments throughout the world (EU for example).
    - epistasis 2y ago
      We instituted many processes during the Biden era for bringing manufacturing to the US. They were all carrot based: provide stability for capital investments and even some tax benefits. This resulted in massive investments in factories in the US, the most in a generation. Tariffs do not provide capital security, they do not make it cheap to build the factories and in fact gigantically jack up the cost because we need to import a lot of the machinery to get the manufacturing going, and building the entire supply chain from scratch would add massive lead time to the other factories that use the machinery. Further, the need for onshoring cheap tshirt manufacturing is far from clear. We have massive amounts of our workforce in far more productive areas that produce absolutely massive amounts of GDP, and reallocating the workforce to tshirt manufacturing makes us far poorer. We are cutting drastically from scientific research, where each dollar spent by the government generates 2x-10x GDP, and telling those scientists to go work in factories. The very same types of factories that our trading partners would give up in an instant if they had the hi tech scientific research instead. What do we need? Certainly not tshirt factories. We need scientists, services, and more productive sectors of the economy. It is absolute idiocy to give up the higher tiers of the economy only possible in the US in the 21st century, to return to far lower 20th and 19th century productivity level.
      - ericmay 2y ago
DrillShopper 2y ago
> it does not have any Vietnam hawks Only chickenhawks that dodged the draft
heisenbit 2y ago
In the mind of a serial bankrupcy expert being in debt gives one leverage. In reality all the piled up treasuries give China breathing room and their sell-off would put the US under stress. The US may be the largest customer of China but is dwarfed by internal customers and the rest of the world. Loosing customers hurts China but it can be compensated. Now as a supplier of volume goods China is much harder to substitute. And as a supplier of specialized high-tech goods China is impossible to substitute. Loosing suppliers in manufacturing breaks complete value-chains so there is colateral damage. On the other hand imagine some smaller critical US component breaking a supply chain in China - there will be fewer of such cases and bad cases can be handled with exceptions. Much different from the US situation where there are many more specialized components from all over the world are impacted. Let's look at car head-lights. These are highly integrated components, designed and manufactured by third parties using tools made by forth parties with the knowledge not in the hands of the car manufacturer. Swapping them may well need re-designs and re-certification. Hard to put an estimate on the overall process but it won't be quick. And last but not least how is new business attracted: The rule of law makes a country safe for an inherrently very risky process of overseas investments. Expats are critical resources for knowledge ramp-up and managing the first years. Billionairs with a seat on Trumps table may not care so much about the rule of law but SME business do. Expats who may move with their family need to be able to rely on visa, green cards and travel being safe. The opposite of what is needed to attract business is done as far as one can see from afar. A trade war with no clear path for winning started from a position of weakness.
Workaccount2 2y ago
China's economic situation right now is worse than the US. They have incredible debt (accounting for provincial debt which is essentially state debt, China is not a federation), a massive housing asset bubble, and an aged population that is expensive to care for. Never mind also being stuck in a deflationary cycle with a high youth unemployment rate. And this is just working with the self-reported numbers from an authoritarian regime. The biggest crunch to the US will be to the consumer, the biggest crunch to China will be the worker. People in the US will need to buy less shit, and pay more for what they do buy. People in China will need to work fewer hours and bring home less money. Of course, the situation is fractal and ridden with unknowns. But I think a lot of people have this view of China as being a young slick economic powerhouse and the US being a weak economy with old decrepit money pile. That's far from the truth.
- tommica 2y ago
  What is the difference between paying more for the item VS having less money to spend? Both to me seem like being unable to afford the things you need.
  - Workaccount2 2y ago
    Americans buy a ludicrous amount of stuff they only think they need. American consumerism is unrivaled in the world. In the US the poor are the ones who suffer from obesity. From having too many calories available cheaply. Let that sink in. The US is so much further from "needs not being met" than anyone understands.
    - bobthepanda 2y ago
      right, but so far the consumerism has been the only thing doing bread and circuses away from the real problems of housing and whatnot. it's interesting that many things like televisions and phones went from being multiples of rent or mortgage payments, to the reverse, so now cutting back on consumer spending to afford necessities wouldn't do a whole lot.
eunos 2y ago
> Additionally, China is much better prepared for a trade war in that it has a populace that has been very well conditioned to go through hardship for longer term wins It's funny that I saw more and more opinions that Chinese will win the trade war by shopping and eating out more.
- deleted 2y ago
  [deleted]

ericmay 2y ago

As much as China can prepare, it's still in a pretty vulnerable position and the whole "the Chinese people are more conditioned for hardship" is as much Chinese exceptionalism as any claim to American exceptionalism. At the end of the day they lose millions of jobs, factories shut down, and people suffer there too regardless of the CCP marketing about being "tough" and "prepared". Appear strong where you are weak or something like that. Meanwhile the US can see prices go up, but aside from a few specific items we can buy or make the things that China has been. At an increased cost, sure, but Americans can handle it. > The US has benefitted for a couple generations by being the reserve currency, meaning that we can make big mistakes and not suffer for them, while any other country would suffer. This coming trade war, if it actually happens, may finally break this exceptional status. Very doubtful. The main danger is lack of fortitude with continuing and enforcing policies, and letting ideological battles get the best of the Trump administration for cutting good and fair deals with the EU and others. You're welcome to invest in Chinese, Russian, or whatever capital markets, though.

skywhopper 2y ago
We can “buy or make the things China has been”? Buy from whom? Make in what factories, with what workers, with what supplies, equipment, and materials?
- ericmay 2y ago
  Ok if we can't then you're proving the need for economic and policy measures to make it so we can. But yes, instead of buying a made in China t-shirt you can just spend a little more and buy one made in the USA, or even other non-authoritarian governments throughout the world (EU for example).
  - epistasis 2y ago
    We instituted many processes during the Biden era for bringing manufacturing to the US. They were all carrot based: provide stability for capital investments and even some tax benefits. This resulted in massive investments in factories in the US, the most in a generation. Tariffs do not provide capital security, they do not make it cheap to build the factories and in fact gigantically jack up the cost because we need to import a lot of the machinery to get the manufacturing going, and building the entire supply chain from scratch would add massive lead time to the other factories that use the machinery. Further, the need for onshoring cheap tshirt manufacturing is far from clear. We have massive amounts of our workforce in far more productive areas that produce absolutely massive amounts of GDP, and reallocating the workforce to tshirt manufacturing makes us far poorer. We are cutting drastically from scientific research, where each dollar spent by the government generates 2x-10x GDP, and telling those scientists to go work in factories. The very same types of factories that our trading partners would give up in an instant if they had the hi tech scientific research instead. What do we need? Certainly not tshirt factories. We need scientists, services, and more productive sectors of the economy. It is absolute idiocy to give up the higher tiers of the economy only possible in the US in the 21st century, to return to far lower 20th and 19th century productivity level.
    - ericmay 2y ago

DrillShopper 2y ago

> it does not have any Vietnam hawks Only chickenhawks that dodged the draft

heisenbit 2y ago

In the mind of a serial bankrupcy expert being in debt gives one leverage. In reality all the piled up treasuries give China breathing room and their sell-off would put the US under stress. The US may be the largest customer of China but is dwarfed by internal customers and the rest of the world. Loosing customers hurts China but it can be compensated. Now as a supplier of volume goods China is much harder to substitute. And as a supplier of specialized high-tech goods China is impossible to substitute. Loosing suppliers in manufacturing breaks complete value-chains so there is colateral damage. On the other hand imagine some smaller critical US component breaking a supply chain in China - there will be fewer of such cases and bad cases can be handled with exceptions. Much different from the US situation where there are many more specialized components from all over the world are impacted. Let's look at car head-lights. These are highly integrated components, designed and manufactured by third parties using tools made by forth parties with the knowledge not in the hands of the car manufacturer. Swapping them may well need re-designs and re-certification. Hard to put an estimate on the overall process but it won't be quick. And last but not least how is new business attracted: The rule of law makes a country safe for an inherrently very risky process of overseas investments. Expats are critical resources for knowledge ramp-up and managing the first years. Billionairs with a seat on Trumps table may not care so much about the rule of law but SME business do. Expats who may move with their family need to be able to rely on visa, green cards and travel being safe. The opposite of what is needed to attract business is done as far as one can see from afar. A trade war with no clear path for winning started from a position of weakness.

Workaccount2 2y ago

China's economic situation right now is worse than the US. They have incredible debt (accounting for provincial debt which is essentially state debt, China is not a federation), a massive housing asset bubble, and an aged population that is expensive to care for. Never mind also being stuck in a deflationary cycle with a high youth unemployment rate. And this is just working with the self-reported numbers from an authoritarian regime. The biggest crunch to the US will be to the consumer, the biggest crunch to China will be the worker. People in the US will need to buy less shit, and pay more for what they do buy. People in China will need to work fewer hours and bring home less money. Of course, the situation is fractal and ridden with unknowns. But I think a lot of people have this view of China as being a young slick economic powerhouse and the US being a weak economy with old decrepit money pile. That's far from the truth.

tommica 2y ago
What is the difference between paying more for the item VS having less money to spend? Both to me seem like being unable to afford the things you need.
- Workaccount2 2y ago
  Americans buy a ludicrous amount of stuff they only think they need. American consumerism is unrivaled in the world. In the US the poor are the ones who suffer from obesity. From having too many calories available cheaply. Let that sink in. The US is so much further from "needs not being met" than anyone understands.
  - bobthepanda 2y ago
    right, but so far the consumerism has been the only thing doing bread and circuses away from the real problems of housing and whatnot. it's interesting that many things like televisions and phones went from being multiples of rent or mortgage payments, to the reverse, so now cutting back on consumer spending to afford necessities wouldn't do a whole lot.

eunos 2y ago

> Additionally, China is much better prepared for a trade war in that it has a populace that has been very well conditioned to go through hardship for longer term wins It's funny that I saw more and more opinions that Chinese will win the trade war by shopping and eating out more.

deleted 2y ago
[deleted]