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This was a reaction to the China rare earth news. If and when that resolves it will simply revert back. It may very well be true we are due for a major correcti

This was a reaction to the China rare earth news. If and when that resolves it will simply revert back. It may very well be true we are due for a major correction or bubble pop but this wasn’t it.

delichon 1y ago
And to Trump slapping on a 100% tariff. Clearly a great decoupling is going to happen and it will be painful, the question is the timing. This is a plausible brink. From here, all that needs to happen to make it so is nothing. The current policies will do it.
- Fade_Dance 1y ago
  I'm not sure this is a plausible brink. The initial "tariff board" situation was 10 times more severe than this, and additionally this is a repeat of the same playbook. This won't be the start of (further) major decoupling unless it's what China wanted in the first place, and they needed another 6 months of preparation before committing to the path. If China says "Go ahead and tariff us 100%. All rare earth exports and re-experts to the US are banned", then that's when to expect changes that won't be reversed any time soon. Everyone knows that Trump will blindly auto-escalate in response, so China saying so would mean "this is the outcome we prefer" and all that follows from there.
  - chneu 1y ago
    China has spent the last year(arguably the last decade) moving their supply chain to not rely on the US. Trump is about to bail out a handful of US industries because of it. Specifically agriculture has taken tens of billions of dollars in losses because China entirely stopped importing US soy and other crops in the last year. Trump's whole shtick is that the world NEEDS the US no matter what. He's absolutely wrong. China has heavily invested in countries to avoid this exact situation.
    - Fade_Dance 1y ago
      I agree, which is why it's plausible that there is a scenario where the bluff is called.
- okl 1y ago
  Game theoretic modelling commonly results in early escalation followed by a slower de-escalating as a winning strategy. Fits into the strong-arm approach to politics of exercising power to expand power which the current US administration seems to follow. Thus, I wouldn't think that decoupling or falling of a cliff is the intended goal.
  - AaronAPU 1y ago
    No matter how many times Trump uses the strategy he literally wrote a book about, the reaction to the initial escalation is always the same. It is remarkable.
    - ambicapter 1y ago
      Did he actually write that book, though.
tilxeycneg 1y ago
This will be worse off for them; Shanghai and Beijing real estate prices dropped 50% in some places in September and October. Their long 6 day national holiday in October had a 20% consumption drop compared to 2024. Same with box office, dropping by double digits compared to 2024. And this is before the 100% tariffs.

This was a reaction to the China rare earth news. If and when that resolves it will simply revert back. It may very well be true we are due for a major correction or bubble pop but this wasn’t it.

delichon 1y ago

And to Trump slapping on a 100% tariff. Clearly a great decoupling is going to happen and it will be painful, the question is the timing. This is a plausible brink. From here, all that needs to happen to make it so is nothing. The current policies will do it.

Fade_Dance 1y ago
I'm not sure this is a plausible brink. The initial "tariff board" situation was 10 times more severe than this, and additionally this is a repeat of the same playbook. This won't be the start of (further) major decoupling unless it's what China wanted in the first place, and they needed another 6 months of preparation before committing to the path. If China says "Go ahead and tariff us 100%. All rare earth exports and re-experts to the US are banned", then that's when to expect changes that won't be reversed any time soon. Everyone knows that Trump will blindly auto-escalate in response, so China saying so would mean "this is the outcome we prefer" and all that follows from there.
- chneu 1y ago
  China has spent the last year(arguably the last decade) moving their supply chain to not rely on the US. Trump is about to bail out a handful of US industries because of it. Specifically agriculture has taken tens of billions of dollars in losses because China entirely stopped importing US soy and other crops in the last year. Trump's whole shtick is that the world NEEDS the US no matter what. He's absolutely wrong. China has heavily invested in countries to avoid this exact situation.
  - Fade_Dance 1y ago
    I agree, which is why it's plausible that there is a scenario where the bluff is called.
okl 1y ago
Game theoretic modelling commonly results in early escalation followed by a slower de-escalating as a winning strategy. Fits into the strong-arm approach to politics of exercising power to expand power which the current US administration seems to follow. Thus, I wouldn't think that decoupling or falling of a cliff is the intended goal.
- AaronAPU 1y ago
  No matter how many times Trump uses the strategy he literally wrote a book about, the reaction to the initial escalation is always the same. It is remarkable.
  - ambicapter 1y ago
    Did he actually write that book, though.

tilxeycneg 1y ago

This will be worse off for them; Shanghai and Beijing real estate prices dropped 50% in some places in September and October. Their long 6 day national holiday in October had a 20% consumption drop compared to 2024. Same with box office, dropping by double digits compared to 2024. And this is before the 100% tariffs.