The EU has significant barriers to US agricultural products. These are not just tariffs, but non-tariff regulations regarding hormone usage in livestock , GMO prohibitions, stricter regulations on pesticide usage, etc.
The EU heavily subsidizes their agriculture-$399 billion equivalence per year when our farm subsidies are about $36-37 billion, less than 10% of European subsidies. When they want to export industrial goods at Zero tariff levels they are counting on their better quality cars, no doubt and the fact that our cars, especially SUVs are not sized to appeal to European customers. If they want to "talk" about non-industrial goods tariff reductions, I am a bit skeptical of their bona fides.

We will learn soon how much these small and mid size companies have for days cash on hand. Then i would assume the CCP offer cash to workers. More cash printed out of thin air for a currency relatively tied to the dollar. We shall see…

Let's just say the economic ride from graduating in 2014 until now has been a wild time.

Ag In Ok said:

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We will learn soon how much these small and mid size companies have for days cash on hand. Then i would assume the CCP offer cash to workers. More cash printed out of thin air for a currency relatively tied to the dollar. We shall see…

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They have already been paying workers as part of the subsidies. But upper management must depend on moving goods and selling to get the majority of their compensation, is how I understand it. China subsidizes its industries sooo much they overproduce by a crap ton. Those containers building up at the ports are the excess over what Chinese production needs. That's whatever profit margin those people have. For many, that is zero or less.

Krombopulos Michael said:

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akm91 said:

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blacksox said:

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So, how's everything going? As well as expected? Or is it time to admit Trump's clown show is complete amateur hour? China is embarrassing him in "negotiations."

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The only clown show and amateur hour are when Dems are in the WH.

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He's doing what needs to be done to crush the EU / Davos / Old money oligarch psychos......

It's definitely not going to be pretty (especially when big EU banks implode) nor be complete overnight.

It's a re-ordering of the global financial system that's been in place for hundreds of years.....

Give it a few more months, maybe even five years, to judge the results.

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Lets say this is true. Is Trump willing to let someone else finish the job? Or does he view this as his last shot and is risking the country's future on a gamble? The scary thing is that no one can honestly answer this question. Not even Bessent or any of the folks who (we think) know what they're doing.

It's obvious to everyone that this would have been far more optimal if we had spent more time preparing for it. Stockpiling crucial goods would have been nice. Negotiating trade deals with friendly countries where we have leverage would have been nice. There is no model for the kind of trade deals Trump seems to want. It's not the USMC deal, apparently. We needed to iron out this issue with Mexico and Canada first. This would create a model trade deal that would serve as a baseline for everyone else. It seemed like he was going this route at first, but when the smart people told him how long it was taking for just two countries he said screw it and pulled a Leroy Jenkins with the dumbest tariff plan imaginable. Liberation Day is now a punch line, and the smart people have spent every waking moment since doing damage control.

Trump probably could have gotten 60-70% of the work done in four years, which is being generous. The big fear among the pro-Trump Wall St folks is that Trump would rather fail than see another president get credit for his achievements. This is why Elon, Bill Ackman and others publicly broke ranks with the admin in the wake of lib day. They are now trying to deescalate by any means possible.

He overplayed his hand, and now he needs both Wall Street and other countries to help him pull off a soft landing. He needs a trade deal with a major player this week, and then average 2 per week for the next 12 months+. The only other option is to start folding hands one by one and hope none of our major trading partners decide to play hard ball.

This is the giant quandary Trump has put us in with the entire world. He chose to pick a fight with precisely every single country in the world at the same time. Americans aren't going to wait until Baron Trump is president to start investing again. The economy will continue to tighten its belt until it has some level of certainty about the new playing field.

I was listening to someone today on YouTube.

But the gist of what they said was it's going to come down to appetite for high interest rates in US vs China running out of $USD.

Again, I am economy illiterate, but they said China is selling bonds to run up the interest rate and so they can pay for their imports of food, LNG, oil since it is all settled.in USD.

will25u said:

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I was listening to someone today on YouTube.

But the gist of what they said was it's going to come down to appetite for high interest rates in US vs China running out of $USD.

Again, I am economy illiterate, but they said China is selling bonds to run up the interest rate and so they can pay for their imports of food, LNG, oil since it is all settled.in USD.

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While both of these things are true, they are not the decisive factors. China controls every aspect of their economy. They have been preparing for this for a long time. They can tighten belts across the board in a coordinated fashion, while we scramble just to figure out what our weak points are. Xi has time on his side. Trump doesn't. He has to get the economy growing again in a matter of months not years. Interest rates have to come down and soon. He has to make a ton of deals in a short time. He's going to have to compromise in order to thread all these needles at once. We're beyond the point of thinking this is part of some brilliant plan that they want to keep secret. This fiasco has made his job 10x harder than it would have been, which means he'll have that much less time to do anything else.

I wouldn't worry too much. There was a paradigm shift in 2008, where MMT will likely backstop any major fallout should Trump go all in and flex big tarriffs after 90 days.

That's the UGLY case scenario, leading to a deeper +40% drawdown from S&P highs, and we stagflate for couple years until enough MMT finally turns the tide.

GOOD case is a swift deal where China concedes a small amount of controls on backdoor cheating and fentanyl. Then Trump and Fox News sell it as a huge victory. (Like in March when F16 went nuts over the total domination of Canada and Mexico bc of border concessions)

BAD case is in between, where we chop sideways in a lightweight trade war that resolves over months. It leaves all sides beat up. Then a slow climb out of a mild recession with smaller QE.

No idea how it will play out, or if there is another scenario I missed. When Trump talks about "transition costs" that could be the uncertainty we are experiencing now thru deal completion, or something yet to be seen related to the outcome, which is concerning.

will25u said:

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I was listening to someone today on YouTube.

But the gist of what they said was it's going to come down to appetite for high interest rates in US vs China running out of $USD.

Again, I am economy illiterate, but they said China is selling bonds to run up the interest rate and so they can pay for their imports of food, LNG, oil since it is all settled.in USD.

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The number one factor that makes Chinese imports so cheap in the US is not cheaper labor, is not IP theft, is not protective tariffs, its currency manipulation.

China makes their currency weak vis-a-vie the $$$ so that their goods are cheap. They do this by printing Yuan and holding USD in reserve.

If they reverse that, the USD will get substantially weaker compared to global currencies, especially the Yuan. A weaker dollar is good for US industrial sector, is good for US labor, is bad for Wall Street, and is bad for the US government sector of the economy.

Higher interest rates are bad for the US due to our massive debt, but a strong Yuan will absolutely crush China.

You have data or articles outlining this? Not arguing, interesting and would like to see more on this theory.

Here is a quick write up from the Bush school that hits the basics and is pretty accessible:

https://bush.tamu.edu/wp-content/uploads/2020/05/V9-1-Chinese-Currency-Takeaway.pdf

Bergsten and Gagnon are probably the top economists on currency manipulation. If you want to get serious, their book (which I have not read) is probably the best known text on the subject.

https://www.amazon.com/Currency-Conflict-Trade-Policy-Strategy/dp/0881327263/

Gagnon has a good podcast on the subject if you like long-form podcasts:



One thing to note though, is that from a blocking and tackling perspective, currency manipulation of this sort is the exact same thing as treating the USD as the global reserve currency. Countries strengthen their balance sheet by holding USD in reserve. They also weaken their own currency and make the USD stronger by holding the USD in reserve, making importing by the US cheaper. It muddies the water quite a bit.

Not at all impressed by Bessent. He mumbles around aimlessly. Maybe it's hard to articulate what Trump is doing because it's mostly unprecedented. Or maybe they are all shooting from the hip with no real understanding of what's down the road.

Pretty crazy we have a Soros protege at the helm. The fact that he likes getting on his knees for other men prob doesn't score us any points with China either.

I hope Trump knows how delicate this is. If he creates a catalyst for depression/stagflation then he can flush the rest of his agenda down the toilet, along with his legacy. That's what makes me think he mostly backs down on China, but still spins it as a victory.

Finally a coherent strategy is emerging, but the fact that Bessent felt the need to leak this right now doesn't feel like a good sign. This is the kind of stuff you lock down in private before you start a massive trade war. We hit the launch button and now we're trying to backfill a plan. It seems like Bessent is leaking this to calm the markets rather than to send a message to other countries. It's not helpful from a strategic standpoint.

Following the imposition of tariffs on friends and foes alike, the Trump administration is now entertaining a new strategy that would offer concessions on tariffs to those nations that agree to help isolate China https://t.co/ozry5G59is

— Nick Timiraos (@NickTimiraos) April 16, 2025

FobTies said:

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Not at all impressed by Bessent. He mumbles around aimlessly. Maybe it's hard to articulate what Trump is doing because it's mostly unprecedented. Or maybe they are all shooting from the hip with no real understanding of what's down the road.

Pretty crazy we have a Soros protege at the helm. The fact that he likes getting on his knees for other men prob doesn't score us any points with China either.

I hope Trump knows how delicate this is. If he creates a catalyst for depression/stagflation then he can flush the rest of his agenda down the toilet, along with his legacy. That's what makes me think he mostly backs down on China, but still spins it as a victory.

---

Take note - the entire foreign relations policy portfolio of this administration is aimed at isolating China.

He won't back down. Maybe move some goal posts around so American firms don't get too much collateral damage, but they've passed over the bridge of no return on the world stage at this point.

FobTies said:

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Not at all impressed by Bessent. He mumbles around aimlessly. Maybe it's hard to articulate what Trump is doing because it's mostly unprecedented. Or maybe they are all shooting from the hip with no real understanding of what's down the road.

Pretty crazy we have a Soros protege at the helm. The fact that he likes getting on his knees for other men prob doesn't score us any points with China either.

I hope Trump knows how delicate this is. If he creates a catalyst for depression/stagflation then he can flush the rest of his agenda down the toilet, along with his legacy. That's what makes me think he mostly backs down on China, but still spins it as a victory.

---

You're not wrong. He plays a Trumpian populist on TV, but he's a pure Wall Street guy. His entire job is to neuter folks like Peter Navarro and adapt Trump's wants into something that keeps the markets happy. He failed in the most epic way possible on lib day, but Trump clearly started listening to him once the markets started to crash. That might not be good news for the China hawks, but hopefully it's good news for our 401ks.

Fitch said:

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FobTies said:

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Not at all impressed by Bessent. He mumbles around aimlessly. Maybe it's hard to articulate what Trump is doing because it's mostly unprecedented. Or maybe they are all shooting from the hip with no real understanding of what's down the road.

Pretty crazy we have a Soros protege at the helm. The fact that he likes getting on his knees for other men prob doesn't score us any points with China either.

I hope Trump knows how delicate this is. If he creates a catalyst for depression/stagflation then he can flush the rest of his agenda down the toilet, along with his legacy. That's what makes me think he mostly backs down on China, but still spins it as a victory.

---

Take note - the entire foreign relations policy portfolio of this administration is aimed at isolating China.

He won't back down. Maybe move some goal posts around so American firms don't get too much collateral damage, but they've passed over the bridge of no return on the world stage at this point.

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If China doesn't blink, and we have to quit cold turkey, that will be years of economic pain that will only worsen our financial situation. If the full weight of Wall Street turns against a president he is done. Period. The last president they didn't control probably wore a wig.

FobTies said:

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Not at all impressed by Bessent. He mumbles around aimlessly. Maybe it's hard to articulate what Trump is doing because it's mostly unprecedented. Or maybe they are all shooting from the hip with no real understanding of what's down the road.

Pretty crazy we have a Soros protege at the helm. The fact that he likes getting on his knees for other men prob doesn't score us any points with China either.

I hope Trump knows how delicate this is. If he creates a catalyst for depression/stagflation then he can flush the rest of his agenda down the toilet, along with his legacy. That's what makes me think he mostly backs down on China, but still spins it as a victory.

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I don't want him to back down on China, just everybody else.

As for Bessent, he is cooperator in chief with Musk, so you have to give him that.

esteban said:

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Fitch said:

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FobTies said:

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Not at all impressed by Bessent. He mumbles around aimlessly. Maybe it's hard to articulate what Trump is doing because it's mostly unprecedented. Or maybe they are all shooting from the hip with no real understanding of what's down the road.

Pretty crazy we have a Soros protege at the helm. The fact that he likes getting on his knees for other men prob doesn't score us any points with China either.

I hope Trump knows how delicate this is. If he creates a catalyst for depression/stagflation then he can flush the rest of his agenda down the toilet, along with his legacy. That's what makes me think he mostly backs down on China, but still spins it as a victory.

---

Take note - the entire foreign relations policy portfolio of this administration is aimed at isolating China.

He won't back down. Maybe move some goal posts around so American firms don't get too much collateral damage, but they've passed over the bridge of no return on the world stage at this point.

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If China doesn't blink, and we have to quit cold turkey, that will be years of economic pain that will only worsen our financial situation. If the full weight of Wall Street turns against a president he is done. Period. The last president they didn't control probably wore a wig.

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IF IF IF

If your aunt had nuts she'd be your uncle.

Fitch said:

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He won't back down. Maybe move some goal posts around so American firms don't get too much collateral damage, but they've passed over the bridge of no return on the world stage at this point.

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I think there are probably some off ramps to spin a compromise into huge MAGA victory. They did it with Mex/Can early on. An empty promise from China to stop dumping, IP theft, fentanyl etc. while tapering off a bit on tarriffs/VAT could end this all, and squeeze market back up avoiding recession.

The alternative of backing China into a corner could totally compromise the Trump agenda and legacy. His crowd sizes will go down exponentially in depression or stagflation.

Bessent is a bad liar, exhibit 1:

Scott Bessent on Bloomberg:

“Chair Powell and I have breakfast every week. We discuss a wide range of things, and we are a long way from any ‘break the glass’ situation.”

Bessent and Powell meeting every week. pic.twitter.com/A0eHYMpFkO

— Geiger Capital (@Geiger_Capital) April 15, 2025

FobTies said:

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Fitch said:

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He won't back down. Maybe move some goal posts around so American firms don't get too much collateral damage, but they've passed over the bridge of no return on the world stage at this point.

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I think there are probably some off ramps to spin a compromise into huge MAGA victory. They did it with Mex/Can early on. An empty promise from China to stop dumping, IP theft, fentanyl etc. while tapering off a bit on tarriffs/VAT could end this all, and squeeze market back up avoiding recession.

The alternative of backing China into a corner could totally compromise the Trump agenda and legacy. His crowd sizes will go down exponentially in depression or stagflation.

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China can go F themselves with a giant bag of tu Glock alternatives.

We need to significantly reduce our trading relationship with China at every opportunity, without sparking a trade war with the rest of the world.

Which lie, specifically?

Vance sounds optimism on a 'great' potential deal with the UK, to my surprise. I'm still skeptical, frankly.

But, some more winning:

👏🏼https://t.co/z0suiX6Vk7

— Matt (@amattattack) April 15, 2025

Still broadly supported:

America is healing! Latest Harvard Harris poll shows OVERWHELMING support for Trump policies:

74% for deporting illegals
70% for closing the border
69% for DOGE
65% to ban trans men from girl sports
57% for ending foreign aid
57% for reciprocal tariffs
53% for Alaska drilling pic.twitter.com/jS5ORMJvbv

— Jess Fields (@jessalanfields) April 14, 2025

And for those driven by Russian animus, this impact on oil prices is going to hurt Russia the most.

Quote:

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Since January 15, the price of Brent crude has fallen from $83 a barrel to $64 today, with West Texas Intermediate tumbling from $78 to $60 in that period.
Russia's economy is battling inflation and bloated by defense spending, as the Kremlin's invasion of neighbor Ukraine rages on. By one measure, Moscow is spending more on its military than all of Europe combined. Russian President Vladimir Putin will likely head off any spending cuts reaching the military for as long as possible, analysts told The New York Times earlier this month.
The tariffs have already had an impact on Russian oil prices, dropping steeply on April 2 and struggling to rise since, said Aura Sabadus, an associate fellow with the Royal United Services Institute (RUSI) think tank and a senior journalist specializing in energy markets with the London-based Independent Commodity Intelligence Services (ICIS).
Prices are roughly $10 a barrel lower since April 2 and are likely to stay put, Sabadus told Newsweek. Russia is "worried," she added.
"While President Trump's goal of imposing tariffs was probably not to crash oil prices, low oil prices will, in the long run, negatively affect Russia's economy," said Kari Liuhto, a professor of international business at Finland's University of Turku.

---

Japan and US likely get a deal done. They are the enemy of our Chinese enemy. Each deal is a step towards ending this trade deficit nonsense. We should start to see victory described as reducing foreign costs and burdens imposed on America, instead of onshoring a manufacturing job boom.

CNN has a story today on "pink tariffs", higher tariffs on women's clothing than men's clothing.

esteban said:

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Bessent is a bad liar, exhibit 1:

Scott Bessent on Bloomberg:

“Chair Powell and I have breakfast every week. We discuss a wide range of things, and we are a long way from any ‘break the glass’ situation.”

Bessent and Powell meeting every week. pic.twitter.com/A0eHYMpFkO

— Geiger Capital (@Geiger_Capital) April 15, 2025

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A regularly scheduled breakfast between the Fed chair and Treasury Sec is a long standing tradition.

FobTies said:

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Fitch said:

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He won't back down. Maybe move some goal posts around so American firms don't get too much collateral damage, but they've passed over the bridge of no return on the world stage at this point.

---

I think there are probably some off ramps to spin a compromise into huge MAGA victory. They did it with Mex/Can early on. An empty promise from China to stop dumping, IP theft, fentanyl etc. while tapering off a bit on tarriffs/VAT could end this all, and squeeze market back up avoiding recession.

The alternative of backing China into a corner could totally compromise the Trump agenda and legacy. His crowd sizes will go down exponentially in depression or stagflation.

---

This confuses two different initiatives happening under the same tariff umbrella.

Mexico and Canada are uniquely dependent on the US as trading partners and are held to a different standard as our neighbors. Rightly or wrongly the US can abuse them more and mend bridges faster than with China (or Europe for that matter). But the big thing here is they are not military rivals.

China is an ascendant threat and the trade reliance on their production capacity one-to-one directly reduces our capacity to respond in a military conflict. They are very openly saying and working towards the rapid displacement of the US as the global hegemon and intend to own the next 100+ years as we have since the end of WWII.

Assuming we don't want to give away the future and sleepwalk into that scenario, then there has to be a reworking of the existing framework where we rely on them for essentially all of our pharma and a huge portion of the hard and soft goods production. No doubt it will be painful to unwind economies of scale built up over decades, but the alternative is continual decline and probably at an accelerating pace.

I for one am fine with short term pain if it means my kids might have the same or better opportunities than I did, cause at the going rate the opposite would have been true.

China tariff raised to 245%

Good. This really ends their remaining ability to subsidize exports pretty quickly.

Trump raises tariffs on China to 245%. By now, this number doesn't really matter per se; past a certain level, trade basically dies. The US is trying to embargo the Chinese economy without having lined up a coalition of the willing. It's a risky ploy!https://t.co/fXPYIJA3k5

— Christopher Vecchio, CFA (@CVecchioFX) April 16, 2025

Having their folks tout how "American peasants" will suffer was probably a mistake by them.

nortex97 said:

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Good. This really ends their remaining ability to subsidize exports pretty quickly.

Trump raises tariffs on China to 245%. By now, this number doesn't really matter per se; past a certain level, trade basically dies. The US is trying to embargo the Chinese economy without having lined up a coalition of the willing. It's a risky ploy!https://t.co/fXPYIJA3k5

— Christopher Vecchio, CFA (@CVecchioFX) April 16, 2025

Having their folks tout how "American peasants" will suffer was probably a mistake by them.

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Our VP called them peasants first, so I think that is just tit for tat silliness.

FobTies said:

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Japan and US likely get a deal done. They are the enemy of our Chinese enemy. Each deal is a step towards ending this trade deficit nonsense. We should start to see victory described as reducing foreign costs and burdens imposed on America, instead of onshoring a manufacturing job boom.

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You do know China, Japan and South Korea have been negotiating a free trade agreement because of this mess? One of the main areas is China is to supply semiconductor raw materials and Japan/Korea to supply chips to China.

https://asianews.network/china-japan-south-korea-to-bolster-trade-ties/

🚨 WHOA: HERE WE GO.... Trump administration reportedly is looking to totally ISOLATE China via negotiations with the more-than 70 nations currently in talks.

Ask them to:
- Stop China from shipping goods through their countries
- Ban Chinese firms from locating in their… pic.twitter.com/ZR81nIcXFT

— Eric Daugherty (@EricLDaugh) April 16, 2025

In an economic war, this is akin to the Blitz or D-Day

FobTies said:

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Japan and US likely get a deal done. They are the enemy of our Chinese enemy. Each deal is a step towards ending this trade deficit nonsense. We should start to see victory described as reducing foreign costs and burdens imposed on America, instead of onshoring a manufacturing job boom.

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I imagine that each and every one of these meetings is going to go similar to the Mahar dinner.

Trump will be gracious but fair. Won't back down and inch except where it doesn't matter, but won't be a jerk either.

I'm hopeful that we have one or two major deals signed (at least in principle) in April.

GarlandAg2012 said:

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nortex97 said:

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Good. This really ends their remaining ability to subsidize exports pretty quickly.

Trump raises tariffs on China to 245%. By now, this number doesn't really matter per se; past a certain level, trade basically dies. The US is trying to embargo the Chinese economy without having lined up a coalition of the willing. It's a risky ploy!https://t.co/fXPYIJA3k5

— Christopher Vecchio, CFA (@CVecchioFX) April 16, 2025

Having their folks tout how "American peasants" will suffer was probably a mistake by them.

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Our VP called them peasants first, so I think that is just tit for tat silliness.

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It was a glaringly obvious insult to the way that China treats its workers. China is feigning like Vance is saying that all of China is peasants. He's not. He's clearly portraying the Chinese government as the bad actors, here.