47
votes
US forges ahead with 104% tariffs on China
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- Title
- China criticises Trump tariff 'blackmail' as market turmoil settles
- Authors
- Joe Cash, Steve Holland
- Published
- Apr 8 2025
- Word count
- 984 words
If this sticks this is basically the end of direct trade between the US and China. There’s almost nothing that makes economic sense at 104%.
I imagine a deal will be made but otherwise we’re looking at supply shocks far worse than COVID ever caused.
I genuinely don't see the end state here. China had a retaliatory trade package lock stock on the previous round and responded lightning fast, indicating that they're very willing to throw hands. There's no telling what their response to this absurd tariff rate will be.
This will without a doubt hurt the American consumer significantly. Almost all consumers will be priced out of all goods. Even "Made in America" goods that rely on certain materials or components may see price hikes.
Even ones that don't, quite frankly. Why would an American manufacturer sell something at a much lower price when you can just sit at a comfortable level juuuust below the imported and tariffed goods?
In a prolonged trade war this will also impact the rest of the world that relies on Chinese trade. While the Chinese money pool is ample, it's not infinite either, they can't keep up the manufacturing pace when the largest consumer economy stops buying their things.
I've learned in the past days that the chinese exports to the US only makes up 15% of all their exports. That doesn't sound like a crippling amount in case it would fall away, especially since the chinese people are probably way more able and willing to deal with economic hardships in a trade war.
It looks to me as if the US is far more dependent on China than vice versa. (Is that a correct usage of vice versa?)
That is generally what happens when you prevent a country from trading with you, they'll just find another partner. We have enough historical precedence for this and it's already happening with the promised increase of trade between China, SK, and Japan.
Don't look at the 15% as if it's nothing though, with an export close to 3.5 trillion, 15% is quite a sum. China owns global trade. This will be genuinely painful for China even if they manage to offload a bunch of the incoming deficits to other countries. I don't think they can fill a 15% gap on short notice.
Even so, you're absolutely correct. The US is far more dependent on China than vice versa (yes, that's correct!). China doesn't lose out on goods, expertise, and whatever else, they lose out on money. The US loses out everything manufactured in China. Empty shelves and all that. Businesses going under because they can't source their stuff. Stagflation. Losing competitive advantages in other markets due to high prices. Yada yada.
The rest of the world is clearly not aligned with the US and will happily provide China the lifeline by continuing trade. Usually, when the US wanted to crack down on a certain country, they could expect the entire EU (and to some extent NATO) to barrel down on these countries with additional trade sanctions in lockstep. However in his stellar wisdom, Trump decided soft power is for softies and threw away all the soft power needed to leverage others to join in. Fatal mistake.
It'll then boil down to who can bear the most pain. The first economy or the second? The one that no longer trades with others? Or the one that still has the rest of the world buying everything they have? The one threatening their allies? Or the one posting Reagan clips?
Well, I just agreed to a clip of Reagan that Chinese diplomats posted on Twitter in the response of the actions of the POTUS. That is a new one.
Now, I feel like it should be added that the current Chinese economic strategy already is unsustainable, and this will make things worse in the mid-term for their various problems. But basically tariffing the entire world is like the king throwing a tantrum in their own court. You know that the rest will then work together for their own personal gains.
Honestly the collateral damage is insane on it's own. And while I think most countries will be hit harder by this than the US, the US has stacked this up al together. Which goes beyond any reasoning and... well, maybe I should just stop here. The arguments make themselves on why this is bad for everyone.
That last part is a bit horrid to write out. It's such a bad policy that it's difficult to contribute to the discussion talking about why it's bad for the US because the arguments are so painfully obvious. The better discussion is how other countries are going to shift their trade, adjust their alliances, and perhaps whether this'll end the dominance of the dollar.
I just hope it won't be to bad for the people, globally. That's all I can think of. This isn't just a thing of capital, but of pharmaceuticals, essential services, developing countries developing, and things that directly touches people's lives.
Both a rare Reagan W and a Chinese market policy W.
It made me laugh so much because it's absurd that China is posting Reaganism and the US is showing increasing Maoist protectionism. It's topsy turvy out there.
Yup, well done!
War.
I predict shit gets bad, Trump talks to China and gets convinced he’s made a “deal”, and the tariffs are either reversed or severely cut back. There’s also a chance the supreme court acknowledges these tariffs aren’t within the president’s power to implement.
And there is the remote possibility an oligarch has the president either assassinated or bought off for billions. Think of how much of Amazon’s inventory is from China. Bezos is done-zos.
Edit: There's still the possibility this is a "dump and pump" operation as widely predicted since the election. Crash the markets, buy low, restore the markets. Easy money for the oligarchs.
Yeah this is a major part of modern hype strategy. Fuck something up, wait until the deal is "we'll allow you to crawl back to us" and claim you fixed it.
$TRUMP and $MELANIA definitely look like trial runs on a multi-leg pump and dump.
And yeah, if I were a billionaire and not in on it, I'd probably be looking at some friendly ex-MI6/Mossad/whathaveyou for hire. If one is that obssesed with money, I can't imagine having this much net worth being destroyed be taken lying down.
Oh so Amazon might be usable again? Lol
No, China is not that dumb. They will just build some mutually beneficial economic alliance with everyone except the US and ride out Trump.
Also the Chinese have endured much more significant suffering more recently than the US, so if it turns into a pissing contest of who can suffer more, they'll probably win via duration.
If it gets close to that bad, all they have to do is out last the US until people actually start building guillotines and dragging republicans on stage. (I don't think it will go that far).
Huah
Won't this also mean, then, that a country could buy from China, make some 'adjustments' and then sell it as their own product to the US at an inflated price and sidelining the tariffs?
Dunno if I'm asking an insane question or if it's just that my question is sensible but the situation is insane... difficult to keep up with it all these days.
Americans paying double for anything out of China would definitely leave a lot of space for arbitrage opportunities. It is crazy, but the world is crazy.
Yeah it would basically mean that the US would subsidise other countries for trading with it. To which, wasn't the 'goal' of the tariffs to combat that 'problem'?
I use quotes because honestly they're governing like a bunch of arrogant middle school kids would. And I don't feel like that statement is particular radical or anything - it's just that fucking stupid.
Yes, and that was already happening before Trump was even elected. China would ship products to Vietnam from which it was sent to the US to skirt any tariff or import restrictions. I think the rubber hoses story was a big one that got some attention?
Since he's cosplaying a pirate republic it may not be as useful since the war against the world sees everyone tariffed, but even then Vietnam has half the tariffs China is now facing.
We've also seen a promise between Japan, South Korea, and China to increase trade relations. Perhaps we'll see goods moved from China to those two since both have vastly lower tariffs too.
Tl;dr.
Yes.
Edit to add: also, the unfathomably large amount of goods manufactured in China is, well, unfathomable. This will more than double the price for almost everything manufactured ever.
Given their own economic woes it's no surprise they're hitting back fast and hard. Telling Trump to fuck off and rally up nationalistic support is a solid strategy for them.
This policy only gets more dumb when you consider my other comment though, the effects are close to subsidising logistics in other countries, most likely developing countries, and taxing your own consumers for that. All the while encouraging other countries to trade more with each other and less with the US and well, you know the drill.
This geopolitical strategy is so stupid that I can completely believe this comes from a shitty LLM prompt.
I don't think it's a geopolitical strategy or anything fancy like that. It's just Trump wanting his way or the highway. He expects the world to bow to his whims and function the way he thinks it should. Reality and facts aren't really a factor in his decisions beyond how he can use it to justify them to the public.
This isn't just me ranting, I'm 99% sure he has narcissistic personality disorder. Just look at the list of traits from Mayo Clinic, he ticks off all of them. All his actions make more sense from that viewpoint. These tariffs are more spite than strategic, he raised the tariffs on China because he's pissed they didn't immediately kowtow to him when he threatened them.
I can pretty much guarantee he doesn't care about the consequences of his actions on the US, probably hasn't even thought about it. He just wants to lash out at anyone who ever refused to contort themselves to fit into his personal view of reality and how it should center around him.
I think he’s also just kinda not really
thought aboutaware of the ways that a country isn’t a company. If you’re the head of a company, you can just fire people that you don’t like, and the company just absorbs that loss until you rehire. Likewise the head of a company can just choose to stop working with some particular supplier or client, and the hit to the bottom line is just the value of that agreement, and the company absorbs that cost.But when you’re dealing with a country, big sweeping changes like this will cause enormous disruption (not in a good way) and the result is likely businesses going under and if I’m being realistic, significant numbers of deaths.
Oh yeah, he definitely approaches politics with the business mindset. Unfortunately he wasn't even that good at running a company. He's pretty clearly used to getting his way due to the power of his name, whether due to people wanting to appease him or just assuming he's super knowledgeable and competent because of his fame.
Yeah fair enough, I actually pointed out to other people the very same thing. He's a textbook example of someone with NPD. Along with generally being stupid, but well prepared for this term(as well as people around him), it's not difficult to see this being a very dangerous combination. Really, I mentioned geopolitics because I'm so used to seeing countries interact with them on principle of geopolitics and not... being run by someone like the fermented mandarin.
Really, the big question is what he'll take down with him.
Yes. For example, Canada and Mexico.
Make Smuggling Great Again
I used the same article in a previous comment I made on a post about the Nintendo Switch 2 pre-orders delayed by tariffs.
You aren't, this is literally dobe already. Even for example build all the parts in one place, then assemble in another that has better tariff treatment.
That's one reasoning tariffing even the penguins is a bad idea, people get upset when there is no work around.
Country of origin rules are specifically designed to address these kind of shenanigans. It will definitely happen, but there are limits to what you can get away with without just lying — how much of an “adjustment” can you make to, for example, an orange or a t-shirt?
It's interesting that you mention t-shirts... there's a whole bunch of shenanigans going on even today due to the complexity of import duties on clothing. Like they'll ship it "damaged" to Mexico and then "repair" it, etc
I'm not saying I agree or even "think" Trump has thought this through, but one of the arguments that there are tariffs on all nations is to prevent this sort of thing.
Now, that would require a level playing field across the board, which, you know; isn't happening. Lol.
Hey we're up to 125% now. Guess they've done away with any pretense that there is math justifying this.
https://www.theguardian.com/business/live/2025/apr/09/stock-share-markets-us-china-trade-trump-tariffs-business-news-live-updates