As I’ve written in a series of posts on the Trump Tariff Wars, the key point hysterical mainstream media coverage mostly fails to acknowledge is the end goal. This isn’t just the Bad Orange Man being crazy and stupid for the sake of it. There’s a method to what the media want you to think is madness – whether it ultimately works, though, remains to be seen.
So far, though, the signs are that it’s working just as intended.
Xi Jinping has cast China as an island of stability ahead of Donald Trump’s “liberation day”, but Chinese exporters tell a different story.
They have told The Australian they fear a tsunami of tariffs emanating from Washington will soon submerge the global trading system that China – Australia’s biggest trading partner, by far – has benefited from more than any other country over the past four decades […]
A new report by the US President’s chief trade adviser Jamieson Greer released on Tuesday, “liberation day” eve, confirmed Chinese businesses have a lot to worry about.
And that’s the whole point. Trump is on a mission to break China’s stranglehold on global trade, from shipbuilding to exports. Chinese businesses are already feeling the effects.
Chinese stockmarkets plunged on Monday, their first day of trading since “Liberation Day” and following the Qingming, or Tomb-Sweeping, holiday. Hong Kong’s Hang Seng index fell 13 per cent, its biggest one day fall since the global financial crisis in 2008. The Shanghai Composite Index was down seven per cent.
Economists have forecast Mr Trump’s new Chinese tariffs are expected to shave about two per cent off China’s GDP this year.
In real terms, that’s nearly $350 billion China won’t have to spend on new warships, fighter jets, missiles and drones. More importantly, with China’s economy already hollowed out by a series of bursting real-estate bubbles, it could upset the entire economy of the communist state.
The new tariffs are a devastating blow for the almost 80,000 stores in Yiwu’s mega market in China’s eastern Zhejiang province, their hundreds of thousands of staff and the nearby factories that produce the stuffed animals, tourist trinkets, garden equipment, metal goods, light bulbs, umbrellas, Christmas decorations and all seemingly every other consumer good you could imagine across its five airport terminals worth of stores.
Is Xi Jinping worried? You betcha.
Underlining its importance as a marker of China’s economic health, President Xi Jinping did what state media called a “field research” trip of the market in 2023.
“[I hope] the small commodities and big market of Yiwu will continue to thrill and achieve even bigger glory,” Mr Xi told shopkeepers and owners.
Behind the brave talk, though, Xi is clearly panicking – and it shows.
Xi Jinping and his council of yes men have made a series of epic blunders over the last six days — and they look poised to make China’s disaster even worse.
After Donald Trump’s “Liberation Day” announcement last Thursday, all leaders around the world except for one took essentially one of two strategies: they either sat on their hands and hoped international sharemarkets would force America’s President to overturn his tariff apocalypse or they sent underlings to sound out the possibility of limiting of the damage to their country.
A few, like the leaders of Vietnam, Japan and South Korea, spoke directly – and respectfully – to America’s president.
Xi, though, tried to go it alone and tough out Trump. Good luck with that.
President Xi and his loyal comrades took an entirely different approach. They hit back – and hard. They wanted to show the world that China would not be pushed around. It has been a bloody spectacle to watch.
First came a 34 per cent tariff on American goods last Friday. Trump was furious. He promptly delivered a further 50 per cent whack on China.
Like a metronome, back came the response from Xi and his comrades late on Wednesday with a 50 per cent counter punch on America.
Xi, no doubt used to never being questioned by his CCP lickspittles, forgot one essential lesson: no one out-assholes the Donald. Let alone out-plays him.
This morning, stunned people in China woke up to find Xi’s determination to look tough – and Trump’s epic backdown on most of his worldwide tariff regime – has put their country in a position that was inconceivable only seven days ago. Trump has reset tariffs on all countries to 10 per cent, except for one: China’s has risen even higher to a shocking 125 per cent.
Mainstream media are trying to paint Trump’s sudden reversal on tariffs as some sort of panicked move. Rather, it looks like what it was clearly planned to be: a strategic retreat after luring the enemy into a trap. Xi took the bait, charged into the breach – and suddenly finds himself over-extended and teetering on disaster.
Wall Street was euphoric. The Nasdaq has posted its best day in 24 years. Australia and other markets in Asia are having roaring Thursdays, with many rising almost 10 per cent. All markets in Asia except for one.
And suddenly we see the key weakness at the core of socialism: a top-down, state-directed market.
All week, Beijing has instructed its state-owned giants to support China’s highly controlled sharemarkets as it attempts to manufacture an appearance that all is going well.
When those Chinese markets reopened on Thursday, they had a heroic task to stop investors from bailing. Determined buying by state-owned giants managed to get the Shanghai composite up 0.9 per cent, commendable work in the circumstances.
Beijing has enough tools to massage its highly controlled domestic stockmarkets. But Xi and his team currently looked completely stumped about how to deal with Trump.
Xi is a bully: just look at how China treated Australia after our PM suggested they were covering up the origins of Covid. Well, sometimes, to defeat a bully, you need an even bigger bully on your side. For all the fainting fits from the mainstream media, the West is lucky enough to have found one.
