Wanted to prompt a greater discussion on tariffs specifically and solely focused as a tool to make China implode and remove the #1 competitor to the US. And yes, I say this with the bias of being an American (if you are European or non-American you may not care and that's fine). Let's remove Trump and his current execution from this equation, and the argument of bringing back jobs to the US since those are contentious and not related to this sole purpose.
My belief is tariffs on China specifically -- again for the purpose of accelerating China's implosion -- make a lot of sense assuming careful execution. Let's walk out the negatives for China:
- China has debt to GDP ratio of >300% (limited room to issues debt to stimulate its economy)
- Big demographic headwinds with pop now declining every year and low birth rate, with additional headwind of
- Few friends globally given complete abuse of trade rules / IP / etc in the past 3 decades, bullying its ASEAN neighbors. India hates China, ASEAN hates China (given the country is becoming more aggressive in asserting its will over the region...all to say they won't aggressively pivot away from China due to practicality, but neither will they step in heavily to absorb China's goods
- As long as Europe raises its trade barriers to China -- which they are HIGHLY incentivized to do given otherwise their entire manufacturing based economies will be hollowed out -- China has nowhere to go but domestically which leads to next point
- China domestic economy is in the doldrums. Property bubble burst, economic sentiment is poor, youth unemployment super high, entrepreneurs are fearful of govt, etc. There is little juice to squeeze
If we tariff China to the point where it's uneconomical to buy Chinese goods -- while will be painful NT for us -- we are sitting in a rare moment where we could drive the country into implosion and hopefully a democratic revolution if the Party fails to deliver on its economic promise. This will necessitate also laying tariffs on Vietnam / Cambodia / workaround countries where Chinese companies are deliberately moving the final piece of low value added manufacturing there to avoid the China tariffs (we've been seeing this play out for 3+yrs).
That said, this means NOT, NOT, NOT putting tariffs on EU, India, Australia, Japan + SK, Africa, Latam, Canada, Mexico, etc. In this way we'd preserve our key international relationships while taking down a big competitor. If we want to bring back manufacturing, that probably warrants a more subsidy-oriented approach vs. erecting trade barriers against reliable partners. What are your thoughts? Let's have an open discussion on this as I'm perfectly open to changing my mind if there are reasonable counterpoints. Just some thoughts I'm throwing out to prompt discussion and debate
As much as people complain about US hegemony, China authortarianism over the world would be far, far worse. A party that is accountable to no one, with no moral compass and one armed with AI / nuclear / automation would be a massive net negative for the world
Not saying the US is 'best' for the world, but it's easily the lesser of two evils if you had to choose. Not even remotely a question. Taking down China is paramount to the US, and very good for the rest of world
And a frontal "take down" assault of China is the only solution?
Not the 'only solution' but it is the most permanent one. Another competitor will one day emerge, but just as it took China 3 decades it'll take that a long time for that to happen. We've extended America's lead another couple decades with this action (of course though there will need to be other things that happen like unleashing entrepreneurial energy in the US via good immigration for world class talent, relaxing onerous regulations, etc)
Pax Americana has statistically been the most peaceful time in the world to date.
True, but does feel like there's some correlation fallacy here.
I am not sure US has a better moral compass. What we view ourselves and others view us could be very different.
I think at the very least, the US has the public / voters to reign it in once in a while even if there are abuses otherwise. China's CCP has no such thing
No government/politician has one hahaha
Far, far worse for whom and in what way? Merely because they aren't democratic? The US is ostensibly democratic yet hicks in the south and rust belt worker who were too blind to see the writing on the wall about US manufacturing almost completely deadlock the political system because of the way the senate is set up. Also, not sure why you think China doesn't have a moral compass compared to the US. By my count, the US has caused a lot more suffering in the world in the past 100 years than China has. Not to mention the US is backsliding into authoritarianism as well.
Pretty smoothbrained take, I must say, and I'm no CCP shill, born/raised in America but wishing suffering upon a billion + people is pretty abhorrent.
A couple of things that China does that I feel are unequivocally worse than the United States:
And none of that touches our judicial system, the capriciousness of the CCP and the 'disappearing' of dissidents or vocal opponents of the Party, economic freedoms like movement of capital and equity ownership, etc.
Additionally, counting suffering over the last 100 years is pretty irrelevant. The US and China aren't anything close to their 1925 counterparts (China isn't even the same political entity). China hasn't had the ability to do anything on the global scale for most of the last 100 years, they couldn't put up any resistance against the Japanese in WW2, remained fairly isolationist in the decades after (with the notable exception of providing millions of bodies for canon fodder in Korea), and only started building a military to rival ours in the 21st century. Since then, they've been a regional bully, propped up Russia's war in Ukraine and have been a major buyer of Iranian oil (the largest state-sponsor of terrorism in the world).
Finally, in response to some points in your other comment, they only pulled massive people out of poverty by adopting market-based reforms and opening the country to international trade, i.e. adopting a Western economic philosophy. Their treatment of minorities is restricted to small numbers because the vast majority of the population is Han Chinese (about 92%). More telling is their history of civil rights, which has failed not just their minority populations but also their ethnic majority.
CCP bots are working over time to give you that many MS's......
The only question that needs to be answered in any of these discussions is is this in the best interest of the American citizens? If it is, then do it, if it is not, then don't. So in order to answer whether or not this is in the best interest of the American citizens, you need to analyze the short-term consequences on Americans and compare that to the long term gain.
Every time you guys bring up this discussion of fair trade, tit for tat tariffs, tariffs used as a negotiation tactic, weakening our competitors/enemies, etc...you always talk about it as if it is absolutely necessary and pay zero attention to the effects on Americans. It's as though you've completely forgotten what the job and responsibility of the US government and POTUS is.
I think taking down China (again, not in the current execution but what I propose above) is very much in the long-term interests of America. Do you feel otherwise? If so, why?
I couldn't agree more that we can't just manage for the LT gain and completely ignore the short-term -- i.e. we need to make the path as smooth as possible. But frankly, it's impossible to do it with perfect smoothness for America given the state of the imbalances. We could have done it 10yrs ago, but extreme times call for bigger corrections. Anyting we can do to make things smoother though is better, so I'm thinking subsidies for companies to invest in the US, tax cuts for lower/middle income Americans, etc.
I don't see why these two things are mutually exclusive
I'm not sure how to feel. I'm not well-versed enough on this topic. Ideally we could all just trade and live in peace together. If you can present to me an argument that China's economic growth is really that detrimental to the US, then I could be open to it, but don't forget that everything you read about and understand about China is most likely a very western POV. Realistically, China probably just wants to be left alone and to prosper economically. The same goes for all the other countries the US has rough relationships with. From their perspective, we can't keep our hands out of their cookie jar. Who's right? Who's wrong? I don't know. But I'm not so sure China has a government team specifically created to plot the down fall of the US. The point of my comment is not to debate whether or not China is a threat, but more so to offer a different, perhaps better, question.
Doesn't really affect the average American. Cheap Chinese stuff benefited American consumers and corporate shareholders as much as, if not more than China.
Manufacturing jobs had already been in steady decline before China entered into the picture. Manufacturing output per capita today in the US is still higher than China. With or without China, the US manufacturing GDP would become less important compared to its consumer spending and service GDP anyways.
China is fast supplanting us in the energy needs for AI rn....anything we can do to slow them down or make them crack is worth it. Assuming of course we don't destroy our economy or our close allies IMO
Where did you get China's debt-to-GDP ratio? IMF has it under 90%
Yeah I'm seeing 85.7%
See links below. This incl local govt debt given China has deliberately pushed federal govt debt to local levels in order to access better funding abroad. These local govts are in many cases virtually bankrupt
https://carnegieendowment.org/posts/2025/02/the-relationship-between-chinese-debt-and-chinas-trade-surplus?lang=en
https://www.reuters.com/world/china/chinas-central-bank-says-debt-level…(,of%20China%2C%20said%20on%20Thursday.
Carnegie China uses a metrics total social financing (TSF). That is the total debt, public and private. What is that number for US?
I would have to assume that the reason China ranks second in our imports from all countries in dollars is due to them having the capacity to produce at a low price. I would think that without China, prices for US consumers would rise substantially and we may not be able to get all of the goods that they produce and sell to us.
Yes, and the sky is blue? I don't disagree with what you said above, but that doesn't address the argument I'm making. If you disagree with my fundamental argument, I'm curious to hear why and on what points
I think in order to take down China, you would have a plan in place to replace them. What is youe plan to replace them?
Cutting them out entirely isn't possible (nor is it necessary per se), I think it's more accurate to look at it as replacing the majority of our imports from today (let's say 60-80% ballpark). This happens two-fold (the first in mid-term, the second in longer-term):
At the end of the day though, I think your premise is misguided where the US govt itself absolutely must 'mastermind' a way of replacing China after we accelerate its implosion -- capitalist markets are very good at reorienting and figuring it out in the aftermath. Just look at Ukraine where they were big suppliers of gas going into manufacturing and other key industrial inputs...supply chains just shifted to other countries. China will not be as seamless as Ukraine of course, but larger point stands that the aftermath will get figured out not via central planning but by entrepreneurial energies & dynamism
China is only a threat for the following reasons.
Their ancient "9Dash Line" of ownership on basically all of South China Sea pool is a direct violation to the more modern Maritime Law. Taiwan also has a bigger, more ancient "11 Dash Line" based on old Chinese empire shipping routes...but China has 9 bceause China took away two dashes in solidiarity for the North Vietnamese after the wars and Taiwan doesn't recognize that action
The increasing violations of Hong Kongs 50 year reabsorption agreement between China and the UK, where Hong Kong slowly dissolves from UK control and becomes a part of China.
Their incistence that Taiwan is still part of China. Very important considering Taiwan makes all our high end chips. Chips 2nm in size that go into your new M5 macbook. Chips that go into your latest Chat GPT. But most importantly, chips that go into F22s, and next gen fighters with AI drones at their flank, and AI driven Apache attack helicopters, and BlackHawk stealth bombers
Because of capitalism, America outsourced our production of high end strategic goods and chip fabrication to the South China Sea, and most importantly, we outsourced it to a country which is claimed by the CCP at direct odds to capitalism... for better or worse. As such the SCS has basically become the new Silk-icon Road. China now more than ever, due to chips, sees Taiwan reunificafion as a core ambition linked to the future prosperity of the CCP on the world stage. In response to the SCS importance and Chinas increasingly public claims on Taiwan and various islands in the SCS, US and its allies and China istelf have all been developing its own navies with goals of enforcing trade routes and future territorial ambitions. This has gone so far that Japan... yes Japan.. whom we took away a military from after WWII... is now being allowed to build their military up in response to the threats imposed by the 11 Dash Line.
The CCP are not a world military threat nor do they have world conquest ambitions. They are a regional military threat whose entire military focus is based on naval dominance of the SCS. They see future prosperity linked fo controlling trade and means of production, via overproducing, so it can continue strangle the west and leapfrog us according to longstanding CCP goals/ what they refer to as their 50-100 Year Plans.
Whether or not you want to agree with it, Trump is ramping up the economic war with China to discourage China from growing bigger than their collar. In order to do that many things need to happen...which may be a subject of future discussion.
You anti China hawks would love nothing more than an escalation into a physical war with China. I hope you all get conscripted and get sent to the front lines when the time comes.
What an incredibly ignorant response. I'm kind of amazed here, what in the world do you know about me that would indicate I want to get into a shooting war with China? When did I say anything about a hot war, even once? You are exactly the kind of slimy person that makes actual debate impossible
Let me be CRYSTAL CLEAR -- I 10000000000% never, ever, ever want to get into a shooting war with China. Taking them down via purely economic means is the only route I think is worth pursuing. If that doesn't work, then I fully believe we should avoid any kind of hot war with China
Sure buddy, waging full economic war with the second largest economy and military peer will lead to peace… Do us all a favor and lay off the internet. Or better yet, go post on Reddit where your views are more welcome
Nah. Trump dodged draft. The biggest hawk, John Bolton, in his first term, also dodged draft.
True, these people are traitorous cowards who whip up anger at a foreign boogy man to divert attention from how badly American oligarchs have ripped off the blue collar class for the past 20 years. And then they will send the same folks to die en mass to preserve American imperialism.
It's more likely that you'll get sent though man, VP bankers are the equivalent of the shortest leper in the leper colony lmao
On the flip side, a VP banker like realtalk with little ability to think for himself would make a good meat shield on the battlefield. I guess everything has its own purpose, no matter how small
This site is almost unusable. There are so many bugs
China can fight a long-term trade war with its $3.2 trillion reserves, export redirection, and government control, but it’s more vulnerable due to its 20% GDP reliance on exports, with 16-17% going to the U.S., and risks of growth dropping below 4%, sparking unrest. The U.S., with exports at 10-12% of GDP and only 7-8% to China, plus a service-based economy and dollar dominance, takes less of a hit, absorbing tariff costs with minimal growth loss (0.5-1%). The U.S. can endure longer with less effect; China bends first under sustained pressure.
With the EU and all of these other countries seemingly interested in negotiating towards increased free trade, I’m not sure that China can afford to fight a trade war by itself. Trump only serves for four years: Xi Jinping is going to be President for life. It’ll come down to how much unrest he’s willing to handle.
China hasnt increased their holdings of US Treasuries in over 10 years. What you wrote as a strength is actually a US weakness as the opposite has occurred, they have been tightening up their belt in both foreign and domestically held holdings of US Debt. In fact they have ben downsizing significantly to fund their governments manufacturing stimulus goals in hopes of tying their high end machinery and various products into future Belt and Road Initiative deals/loan packages.
They just publicly announced a big spending package on manufacturing at the CCP yearly meeting on longer running plans. Right on cue they began unloading US Treasuries. The peak happened a few days ago after tarriffs which Bloomberg even acknowledged was large enough that it disrupted the bond issuance market and caused a jump in longer dated yields.
The best approach is to leave China alone, let them do whatever they want with Taiwan, stop the meddling, and at the same time bring critical, national security related manufacturing back to the US.
Acknowledge the US hegemon is over and there will be an equal or even superior super power, let go of your ego and stop looking for confrontation, while at the same time make sure you have enough firepower (both literally and non-literally) domestically to sustain and defend yourself. That's the only way the two countries can peacefully coexist.
And trust me, there are 1.5 billion motherfuckers in China for the government to manage, they are not interested in taking over 350 million spoilt Americans.
I feel like your hope relies a lot on "That said, this means NOT, NOT, NOT putting tariffs on EU, India, Australia, Japan + SK, Africa, Latam, Canada, Mexico, etc." which does not seem to be the case. At this rate Trump's going in with the subtlety of a bull in a china shop tariffing everything under the sun which is just going to drive everyone else to rally around the next largest entity that isn't bullying them.
I also think you're overstating the degree to which other countries hate China - undoubtedly the IP infringement and the geopolitical tensions with neighbors over territorial ownership foster resentment but I'd wager that the in-your-face "fuck you give me money" attitude pushed by Trump/Vance are going to turn people in other countries against the U.S. more than the former does against China, especially since it's both more direct & insulting and it's going to impact people's day to day lives & prosperity vs. "more fishermen got into a dispute with Chinese fishermen, next at 11."
The EU, Japan Vietnam, UK, India, Israel, South Korea, and others are preparing to negotiate; if anything, I believe this could reorient international trade towards an American centered free market economy global economy with fewer trade barriers than ever before. Though China’s been notorious for IP theft and currency manipulation, it isn’t as strong as people think. Per Reuters:
China’s export reliance (20% GDP, 16-17% to U.S.) and $800B in U.S. Treasuries make it more dependent on the U.S. than the U.S. is on China (10-12% GDP exports, 7-8% to China). In a prolonged trade war, the U.S. can endure longer with less pain; China risks unrest if growth dips below 4%, despite Xi’s long-term grip on power. In 3.5/3.6 years, Trump can do a lot of damage to destabilize Xi’s regime - if Xi believes Trump is willing to do that, even at the expense of the American economy for a period of time, he might cave and make a deal.
I don't know how much stock I'd put into broad statements of "preparing to negotiate" - Japan/South Korea/China similarly announced a trade agreement for the first time in 5 years directly in response to Trump's tariffs too. It's difficult to say what each group's negotiation is going to look like.
I'm also not sure what you mean by "reorient international trade towards an American centered free market economy with fewer trade barriers than ever before" - are you suggesting that the world economy wasn't American-centered previously? For context, Singapore currently imposes 0 tariffs on American goods and their PM recently spoke about how the previous era of trade stability/free trade with the U.S. is over & to brace for changes in the world order.
Lastly, I think you have the Xi/Trump political positions reversed - while it's true that China is more exposed economically, the nature of elected leadership in America means that they're going to be far more vulnerable to public unrest than the leadership in China who have more unilateral power to just tell their population to "deal with it." Trump's antagonzation of every single other country in the world (minus Russia and Belarus) also means that he is indirectly mitigating the impact on China's economy by bolstering their international relations.
del
Your argument appears logically sensical. However, there are two drawbacks:
Maybe not, but making Xi Jinping fear a potential economic implosion of China might make him amenable to negotiating more favorable trade terms with the US.
This is a complete and fundamental misunderstanding of Chinese policymaking process and the underlying cultural forces that drive it. China will not back down from such a significant escalation, especially given their leadership has significantly more political capital to expend in fighting a trade war than Republicans. Trump and the GOP really only have 1.5 years until midterm elections to "win" this trade war, at which point they are almost certainly guaranteed to lose the House and potentially the Senate if things really go sideways.
This is why Carney and Canada are taking a hardline stance against the US despite their economy being much more exposed to tariffs than the US. Tariffs are a unifying force at the moment for the rest of the world - Canadian voters are (at least today) indicating they are willing to suffer pain to not back down. Tariffs are a polarizing and dividing force in American politics because we are the aggressors in this trade war. This inherently limits the political capital Trump has to fight this war.
On #1 -- how would this play out? The only way I can see this happening is China invading Taiwan (as it would make no sense for China to attack mainland US, that's unwinnable for them). Though even here, as long as we don't cut China off from Taiwanese chips entirely (but rather just restrict them from purchasing the leading nodes) it would be massively harmful to them as well since once they invade, everything in Taiwan related to foundries becomes worthless (these things are very fragile)
On #2 -- in the short run, no. In the long run, absolutely since the US will be the dominant power....which means enormous bargaining power against any other countries for resources / trade terms / etc. Key to remember the ROW isn't doing well right now, except for India and maybe ASEAN to some extent. I'd argue that's a pretty good setup, esp since we'd be crippling China technologically -- which gives the US far more time to innovate on key things like AI / industrial automation / humanoids / drones / etc
Fair points all around. I suppose the only question is whether these benefits should be prioritized over the consequences that you too have hinted at: geopolitical instability and short term (let's not sugarcoat it) suffering of US consumers. It is a hard sell.
However, I do agree with your rationale. You appear to be well informed.
Tariffs on China raised; 90 day pause on reciprocal tariffs on the rest of the world to allow negotiations. Thank you, Mr. Ackman.
lol Trump is such a clown and saving face now. Can’t wait until you all tell me how this was all part of the Art of the Deal.
“b-bu-but Trump doesn’t care about the markets” lol
Would you be surprised if Trump and the team bought leveraged ETFs on the S&P 500 before the announcement?
TQQQ up 35% today. Would not be surprised.
Icing on the cake is Karoline Levitt telling the press the public beef between Elon and Navarro is "just boys being boys and you should be thankful to Trump for the most transparent presidency ever"
Never been gaslit so hard...
As someone who doesn't really care about politics:
Honestly, I wonder if you did any research on GDP or Asia-to-US export at all, which can be pretty basic. China currently has a relatively small portion of its GDP related to the U.S., like 2%+, while economies of Vietnam, Taiwan, Hong Kong, Malaysia, etc. all have higher reliance on the U.S.
If you wanted to use tariffs to limit China, this is not how you do it. These Trump tariffs are how you destroy American power. If what you want is to take out China as a competitor to America, the tariffs would be something to the effect of
(1) [50%-plus] tariffs directly on China.
(2) [50%-plus] tariffs on any imports from third countries where the exporter is owned/operated by a Chinese entity.
(3) [50%-plus] tariffs on any imports from third countries that are contracted to manufacture for a Chinese entity.
This holds water.
My thought was if the goal was to neutralize China, a ratcheting tariff of 1% per quarter paired with seeking closer trade ties with Africa, LatAM, SE Asia, India and the EU would do much better. I sincerely doubt that US manufacturing is ever going to be low value labor intensive items, but we absolutely could have growth in precision machining and higher end capital intensive products. However, reshoring manufacturing will take years if not decades and starting by adding a tariff that grows by an amount that allows for companies to plan as a part of capital budgeting would be useful.
100%. Some of the most ardent supporters of tariffs fail to account for the fact that factories aren’t conjured out of thin air the second tariffs are signed into effect. Ridiculous.
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