Isn't this essentially "we're closing borders"?<p>Since the gloves are officially off, I'm wondering about something. Doesn't China hold a whole lot of US treasury bonds? What happens to those famous 10 years yields if China sells all its US bonds (why would it want to keep them if the relationship is dead)?
Meanwhile, Apple stock is up 3.5% at the time of writing. What gives? Has Wall Street already priced in the "104% is so unreal, there <i>has</i> to be some kind of deal or exemption in the works"?
The thing is, Trump needs some exit ramp for this. He's incapable of admitting fault, and will keep going until something catastrophic happens - only to throw other under the bus.<p>China knows how to play him, he's an open book. Predictable as the clock.<p>But he can't end this himself, someone else has to pull that lever and take the blame - unfortunate as it is.
How do we expect Trump to respond to this? 200% tariffs? He's already shown that the only thing he knows how to do is fire off even more tariffs. He expected the world to just capitulate to him.
Hard to see how this benefits anyone. Or who's going to be hurt more by it. America's tariff move under Trump is a symptom of mass psychosis. But I think China's response is a huge gamble that the psychosis can be broken with careful application of pain - before that pain hurts China even more.<p>Personally, I buy almost no consumer products, and it's true that most people in the US who backed Trump are debtors and consumers who are going to see prices go through the roof. But there is no guarantee they will blame their leader. The cognitive dissonance implies they will blame anyone else. There is some hope that they'll revolt against Trump if things get bad enough, the way there's some hope for democracy in China, I suppose. But at the same time, I don't know that China's aggressive response is going to politically move things in that direction, because it's so easy for the nationalists to rally around the flag - regardless of the economic pain they're experiencing. China itself knows this and leverages it with its own nationalists. And this response is going to cost China dearly. It may be counterproductive. Then again, I think it's a bold move, and if I were in China's position I think I would have to try the same and wait to see how long it takes for America to cry uncle.
Trump caved as expected day after EU passed a countertariffs resolution. Exactly what I predicted 2 days ago.
<a href="https://news.ycombinator.com/item?id=43613377">https://news.ycombinator.com/item?id=43613377</a>