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Trump's capitulation to China shows a valuable lesson for those he bullies

j brown's body

"A Soros-backed animal"
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"When President Donald Trump launched his trade war on the world, he issued a stern warning: “Do not retaliate and you will be rewarded.” China ignored the warning. It was rewarded anyway. This morning, Trump largely suspended his trade war in return for nothing but promises of ongoing discussions. There is a lesson here for everybody Trump threatens, whether countries or businesses or universities.

...As an exercise in trade policy, this makes no sense. But to treat Trump’s behavior as if it were narrowly tailored to the objective of reordering global trade misses the symbolic role it plays. Trump is performing a character, the presidential version of the boss he played in The Apprentice, sitting in a plush leather chair doling out justice to quavering supplicants. His threats of conquest against Canada, Greenland, and Panama, and his unilateral renaming of the Gulf of Mexico, advance no practical objective. Indeed, they generate resentment that weakens his leverage over those countries.

...This makes for an unusual style of governing, to say the least, and even a decade into the Trump era, the president’s targets often respond with confusion. But the evidence suggests a fairly clear pattern: Although Trump instructs his targets to submit, doing so merely sets them up for more humiliation and abuse. The genuinely complicated factor in these negotiations is that “winning” with Trump is often impossible, becauseo the relationship itself is lose-lose. Trump does not appear to recognize the possibility of a positive-sum engagement, and his attempts to turn a productive connection into an exploitative one create losses for both sides. This is most obvious in trade, where Trump’s protectionist instincts have spread pain around the globe without generating any gains. His extortion of domestic firms and civil society has likewise undermined some of America’s most admired sources of innovation, for no offsetting benefit other than the expansion of Trump’s own power.

Trump is a classic bully who craves submission and fears conflict. His fervent supporters want him to be Michael Corleone, but he’s more like Biff Tannen. Standing up to Trump does not mean that you win. But giving in guarantees that you lose."

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If only all the world were Trumpco customers...


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Trump folded, It was a beat down by the good guys, China.
 
Contrarian take, but I don't think Trump folded. I think he paused. Big difference.
 
The real message is .....throw me any scrap and I'll impose 10%. Trade deficits, repatriation of production and artificial barriers be dammed.
 
Contrarian take, but I don't think Trump folded. I think he paused. Big difference.
Yes, it seems this is how his admin will work. He'll feed us all bullshit in 90 day increments for the rest of his term.
 
The real message is .....throw me any scrap and I'll impose 10%. Trade deficits, repatriation of production and artificial barriers be dammed.

10% is here to stay as long as he and like-minded people are in power. He's done with free trade. The trade that exists between specific countries is to be worked out. The 10% is there to be the permanent reminder that we live in the post-free trade era.
 
Yes, it seems this is how his admin will work. He'll feed us all bullshit in 90 day increments for the rest of his term.

I, like you, am skeptical that we can abandon free trade in this manner. I will say, however, that there might be more strategic thinking within the WH than I gave it credit for. I don't know whether it's more reactive or proactive. It seems more reactive, honestly, but the point is, there is some moderating force within the WH. I am guessing that Bessent is becoming a more dominant force in Trump's inner orbit. Musk is already more or less gone, and Navarro seems muted, so that probably means that Bessent is the Cohn/Mnuchin of Trump 2.0
 
I, like you, am skeptical that we can abandon free trade in this manner. I will say, however, that there might be more strategic thinking within the WH than I gave it credit for. I don't know whether it's more reactive or proactive. It seems more reactive, honestly, but the point is, there is some moderating force within the WH. I am guessing that Bessent is becoming a more dominant force in Trump's inner orbit. Musk is already more or less gone, and Navarro seems muted, so that probably means that Bessent is the Cohn/Mnuchin of Trump 2.0
Yeah, he still has to sell his soul but he might be halfway competent.
 
Yeah, all these tariff fiascos has shown it's pretty easy to get what you want from Trump. He will always fold.
 
Other countries have combined global trade with strong unions and welfare states.



Countries can also work together to make globalization more fair. Like for example through minimum tax on multinationals.


While Trump trade wars and transactional approach to global relationship will hurt the US but enrich Trump and his cronies.


 
Now Xi and his CCP Bois in Bejing have to make good on several Trump requirements over the 90 day suspension.

Beijing has to break up local makers of fentanyl who continue to provide the ingredients for the drug into the US. Indeed, as much as the CCP has controls over the population, local officials still prove elusive and slippery. It's local debt that's strangling the financial system, not the Bois in Beijing who are not the sole or leading culprits. US conservatives would admire the fiscal prudence of the Bois in Beijing who are natural born penny pinchers.

CCP Bois have already approved a resumption of several rare earths minerals the US needs and that it had prohibited for export due to Trump's "Liberation Day" stuff. Trump saying he'd turn to Canada for rare earths minerals instead got the Bois shaking and moving on this.

Beijing has to commit to buying lots more US goods and commodities and make more approved investments in the US or Trump will get a billionaire to buy Tik Tok away from the Bois and jack up tariffs again besides. Tik Tok is anyway getting tighter scrutiny for what it allows or doesn't allow to suit only themselves.

Xi has to come through or else.
 
I concede that I, too, thought Trump had folded, and to a degree, one can argue he did because he did bring the tariffs down substantially, at least temporarily. However, I am beginning to think that this might have been his strategy all along, say what one will about it.

As one economist I follow periodically put it, Trump front-loaded the bad news. I guess another way to look at it is that he front-loaded the shock to get everyone's attention and to make sure everyone worldwide knew that he wasn't messing around. He's serious about upending the existing neoliberal trade order and replacing it with a modern form of mercantilism, and from their point of view, there's no going back.

The other piece to all of this is energy. Trump is working with Middle Eastern countries a lot lately because they have oil, and Trump's administration wants the US to collude with ME oil producers to put pressure on Iran, Russia, and Venezuela...which also goes back to China. Weakening these three and having the ability to control oil pricing leaves China quite vulnerable as they import the vast majority of their oil.
 
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