[zmmmmm]

It seems to me the core issue at hand is that Trump has made a grave strategic error in terms of who really holds more cards in the trade battle, specifically with China.

This bond lever - the threat to abruptly shut off US debt supply - is just one of them. But China can also simply manage far more easily without US imports than the US can manage without Chinese imports. And for any given pain threshold, China can bear that far longer than the US will, because of the authoritarian control the government can exercise.

And then from a geopolitical point of view, even if China loses they win - because the rest of the world fully views this as an act of betrayal and lunacy by the US and the more negative the outcome the better China looks by comparison as a reliable, rule following partner on the world stage.

Basically what I see here is that we have a game of poker where China holds nearly all the cards and Trump is just pushing more and more chips onto the table.

[notahacker]

There's also the simple fact that there are an awful lot of countries other than the US for China to export to, and some of them are busy looking for new suppliers (especially since lots of "made in the USA" products have tariffs on their constituent parts). And China is much better equipped to change manufacturing priorities, and directionally the shift would be up the value chain....

[tim333]

>strategic error in terms of who really holds more cards in the trade battle, specifically with China.

I'm not sure who has cards is the problem so much as launching an unnecessary trade battle in the first place.

If you really wanted to onshore industrial production you could have announced sane policy in advance to give people time to build factories in the US etc. without a trade war needed.

[sanp]

He has bankrupted a few casinos. So, he is pretty good at poker.

[optimalsolver]

Bankrupting a business where you have a mathematically insurmountable edge is actually impressive.

[wahnfrieden]

It would be useful for laundering.

[ac29]

Large casinos are very expensive to build and operate. Even if they have favorable gross margins (the house edge), its pretty easy to lose money net of expenses.

[trilbyglens]

Also, don't forget to factor in the reality that many Chinese people live at and expect a far lower standard of living than Americans do. Americans by in large are some of the most spoiled and entitled people on this planet who think that getting a new TV every year is a necessity for life

[re-thc]

> error in terms of who really holds more cards in the trade battle, specifically with China.

This isn't 1v1 though. Maybe there was a time when US vs the rest would work, but now?

The problem is this isn't about import / exports of physical goods.

Once tariffs and bans happen on digital goods, services, etc the US is toast. Has Trump forgotten about them? China is already onto things like US films.

Game studios, Disney, Netflix, Hollywood, etc are all on the firing line.

Even sports like NBA, major league, etc would all crash. A large part of their income is from advertisements and broadcasting deals overseas.

[jajko]

I can imagine Amazon's AWS (or MS, Google etc) can be banned in Europe in same way Huawei tech was banned. That will hurt US economy.

Even if local alternatives may be lacking now, we can subsidize them for some time so they grow on scale, and thats more than enough for us, we don't need to be cheapest on the market. If we are reliable rest of the world will come to us too. Don't forget US vs EU are 2 mammoth +-comparable economies, and EU has more 100 million additional citizens.

4D chess move would be banning for example ASML machines for any US-related business, let's see how orange man handles his emotional swings.

This is all just a tremendously stupid set of moves. The problem is, people in current US power circles are visibly not smart, you can see it daily. So they inevitably fuck up things, and with massive moves massive fuckery flies to all of us. There is almost 0 chance things will end up as they are publicly spoken of - there are 2 options, dumb as fuck as I wrote or actually some sort of nefarious plan for trump's clan and cronies to get massively richer and suck a lot of money from markets and everybody and their pensions.

Actually I hope its the latter, smart evil can be somewhat reasoned with, pure dumb arrogance not so much you just have to keep licking that ar*ehole and pray for the best.

[ndsipa_pomu]

> I can imagine Amazon's AWS (or MS, Google etc) can be banned in Europe in same way Huawei tech was banned. That will hurt US economy.

I'm surprised that with the current shenanigans around DOGE and security that Europe hasn't banned them as I don't see how they can be considered GDPR compliant if the data can be plundered whenever Trump and his menagerie decide that they want to look for dissenting opinions.

[XajniN]

US-related businesses are the only buyers of ASML’s most advanced machines. The 300 million American customers are worth at least 3-4 times as those 400 million in the EU.

So, while China has better cards than the US, the EU has no cards at all.

[re-thc]

> US-related businesses are the only buyers of ASML’s most advanced machines.

Only because the US requested it i.e. banned China.

And who's US-related again? Oh you mean those that have to pay >30% tariffs? Are you sure they're related?

> So, while China has better cards than the US, the EU has no cards at all.

No? EU can just sell ASML to China instead.

[pwatsonwailes]

A strategic error would imply he actually has a strategy. No-one doing anything in American government right now has a strategy.

As long as he gets to play as much golf and watch as much TV as he likes, he doesn't seem to care much. I don't think anyone bought Trump, I think he's just signing whatever is put in front of him and taking credit for it so he can go back to playing golf.

[ENGNR]

Possibly true.

China has had net positive tariffs against the USA for decades though. Obama tried to use the WTO to label them as a currency manipulator. Trump tried some tariffs the first time around but they just raised theirs higher to keep the imbalance.

Not saying the current strategy is a good one. But America has lost the entire supply chain, racked up huge debts, and a dollar that encourages more and more consumption. Doesn't something have to happen eventually, before the problem gets worse?

[zmmmmm]

Sure, yes, the fact that the US now is in a weak position built up over decades is just the reality that has to be faced.

The path out of it is painful - starting with reducing US debt, and using a full complement of measures to diversify sources of goods and services (including bringing them domestically where it makes sense). It's something you do over a decade, in partnership with your allies, not a week on your own.

[re-thc]

> Sure, yes, the fact that the US now is in a weak position built up over decades is just the reality that has to be faced.

It's misinformation to say the US is in a weak position. It's not. It's just gone on to do other things. When we talk about these trade deficits do we include streaming services, television shows, films, games and whatever else?

> (including bringing them domestically where it makes sense)

It doesn't, that's the point. Would you rather have factories with workers below the minimum wage or industries like the NBA?

[leovingi]

> factories with workers below the minimum wage

China made that choice in the late 1970s and early 1980s and has progressed ever since and is now powerful enough to be able to stand up to the United States.

You have a warped view of what manufacturing is and how it can be built upon that is closer to children's cartoons than reality.

[re-thc]

> China made that choice in the late 1970s and early 1980s and has progressed ever since

So you're saying that China has grew out of manufacturing because a lot of it is moving out of China. In the same way the US has also moved out of manufacturing ages ago.

> is now powerful enough to be able to stand up to the United States

How do you conclude that the ONLY thing China did is manufacturing?

> You have a warped view of what manufacturing is

No, it goes to show you know very little about the world. It's not all just manufacturing. That's definitely not all that China does. If it was you wouldn't have to ban Huawei and Tiktok.

Do you know how many games come from China now? A lot of US and EU game studios are at least partly owned by Chinese companies e.g. Tencent.

[leovingi]

>China has grew out of manufacturing because a lot of it is moving out of China

China's Manufacturing Production [1] and Industrial Production has increased year-on-year for the past 10 years, excluding abnormal events such as Covid, so where are you getting your data? If you meant to say that they are transitioning to a higher level of manufacturing, instead of the sweatshops they were associated with in the 90s, this is true. But it was the low-level manufacturing that allowed them to build up both the capital and the skill necessary to advance further and further.

Hell, you've got a naval empire (the United States) that is currently unable to come even close to the Chinese ship-building capabilities - their output dwarfs the US by 232x [2]. It's not something that happened overnight and it's certainly not something that was strategically planned out 30 years ago - it is a slow process that started with low-level outsourcing and allowed China to grow into the behemoth it is today.

Sooner or later the US was going to have to deal with this fact and it seems like that time has come. Whether or not there's a plan, whether or not it will even work - I have no clue, you have no clue and neither does anyone on this forum.

Also, to counter another point you made - "When we talk about these trade deficits do we include streaming services, television shows, films, games and whatever else?" - you can't fight a war with an economy based on streaming services, TV shows and games.

[1] https://tradingeconomics.com/china/manufacturing-production

[2] https://www.americanmanufacturing.org/blog/chinas-shipbuildi...

[mdemare]

If you want less consumption, and pay off debt, maybe ... raise taxes?

[XajniN]

No one wants less consumption, you want to pay less taxes. The only way to reduce taxes is to reduce spending.

[ajross]

> Doesn't something have to happen eventually, before the problem gets worse?

The linked article is LITERALLY pointing out that the "something" you want to "happen" is in fact making exactly the problem you're talking about WORSE.

I don't get it, I just don't get it. We're all getting poorer, very rapidly, on every imaginable axis: higher domestic prices, lower international demand, higher interest rates (the linked article), lower asset valuation in US dollars, loser US dollar value globally. Literally everything is worse. And you're still digging for some kind of coin that might have some shine on the other side that you missed.

[pjc50]

> dollar that encourages more and more consumption

Under consumerist capitalism, more consumption is generally considered to be a good thing. See all the people complaining about the price of eggs under Biden. I wonder how they're doing.

The tariffs mean that Americans will be able to afford less stuff. That's the stated objective: buy more expensive American goods rather than cheaper imports. It remains to be seen how a country which got started around a riot against import taxes is going to handle this.