According to China, remarks from Donald Trump and Scott Bessent in recent days about a possible de-escalation in bilateral economic tensions were hot air. Lies. Just a couple of guys trying to talk US equities out of revisiting the local lows.
“Any reports on progress towards talks are groundless,” a spokesman for Xi’s Commerce Ministry said Thursday, at a regular press briefing. America, the same Party functionary said, “should heed rational voices and remove all unilateral tariffs imposed on China if it really wants to solve the problem.”
Folks, there haven’t been any discussions between the US and China, let alone a high-level dialogue. To be fair, neither Trump nor Bessent said otherwise, but both men on Tuesday intimated that some manner of reconciliation — a partial economic rapprochement — was likely. And the administration has repeatedly insisted that Beijing will ultimately come to the table, because China “has to” make a deal, and probably wants to posthaste.
On the contrary, it’s fairly obvious, three weeks into the post-“Liberation Day” era, that Trump badly miscalculated vis-à-vis China, which had four years to prepare for this. I don’t want to say China doesn’t care but… well, I don’t think they care. Not on some days.
The problem — one problem — for The White House is that everyone knows triple-digit tariffs are “a joke,” as Beijing put it earlier this month, particularly when the context is the world’s two largest economies. Here’s a highly inconvenient truth: The US and China can’t decouple economically. It isn’t possible. The two countries’ economies are inextricably bound up with one another, and cutting that particular cord will kill both.
With that in mind, Trump’s stumbled into an Indiana Jones meme here. There’s a scene in the third of the original film trilogy (all classics) where Harrison Ford tries to extract information from a religious fanatic by threatening to get them both killed. “If you don’t let go Dr. Jones, we’ll both die!” the man says, as the small boat they’re on is being destroyed by the propeller of a larger boat. “Then we’ll die!” Ford bluffs. “My soul is prepared!” the man says. “How’s yours?”
To be sure, Beijing’s bluffing a little too, but not as badly as Trump’s bluffing. China, its people and particularly the big man at the top over there, harbor notions of historical destiny that Americans lost a very long time ago. The US in 2025 doesn’t have any principles or discipline. We just want to be comfortable. Our pain tolerance is negligible. When someone shows us one of those hospital pain charts with the smiley face continuum and asks, “How would you rate your pain?” we automatically say “10,” even if it’s just a sprained ankle. The idea that Americans are going to fight an economic war of attrition with the descendants of the Long Marchers is wholly laughable.
On Thursday, China reiterated that a precondition for any talks is “sincerity” from Washington and this time, Xi doesn’t seem like he’s inclined to give Trump the benefit of the doubt. That is: Beijing knows that a hallmark of Trump’s “dealmaking” process is negotiating in bad faith. It’s not even clear he knows how to negotiate in good faith, or if he does, he considers that a kind of weakness. But that ain’t gonna work. Not this time. If Trump wants talks, even at a low level, he’s going to have to be earnest and honest, with both being anathema to his constitution.
Apparently — which here means by every account — Xi’s declined Trump’s calls on multiple occasions since January 20. The Party views any such discussion as pointless currently. What does that tell you?
I’ve repeatedly criticized Beijing for the piecemeal nature of the Party’s fiscal stimulus efforts, which have generally failed to resurrect domestic demand and resuscitate consumer sentiment. But by design or by accident, that slow-drip approach looks prudent in hindsight. There’s considerable scope for top-down (i.e., federal-level) fiscal stimulus in China, and their monetary policy toolkit is very deep (to the point of being convoluted, actually).
Since April 2, China’s seen Trump backtrack, pause, waver, exempt, squirm, bluster, make nice, make threats and rescind them, all in response to the behavior of financial assets and the shrill protestations of the American business community. In other words: Trump’s beholden to capitalism.
Xi doesn’t have that problem, and China knows now that all it takes to break Trump is a 15% drawdown in US equities, a 50bps increase in US borrowing costs and/or a couple of alarmist phone calls from the C-suite. And that’s the guy who’s gonna outlast the ghost of Mao? Please.
I think Xi knows that our emperor is wearing no clothes. And his bullying looks foolish. The world is stuck with China, and not everything will always go our way.
MAGA hats and “Boycott China” t-shirts are made in China.
“Trade wars are good, and easy to win!”
– Some moron that stupid people think is ‘good at business’
Biden actually put some distance between us and China.
Trump may be the guy who actually enables them to get ahead.
Prediction: the next major Trumpian flinch will be around the expiration of de minimis exemption on Chinese imports. That officially goes into effect May 2. Presumably there will be a few days to a week of pandemonium, and then blink.
Adding: Hong Kong Post has said they’ll stop accepting US-bound airmail packages on April 27, so the fun could start even sooner!
From what I’ve read more than once, duty collection at US ports of entry is all over the place. We’re so not prepared to take on China. We can’t even implement what the naked Nero has proclaimed. H, your Long Marchers vs the ‘my sprained ankle is a 10′ captures the zeitgeist perfectly. Americans no longer have a reality based concept of who we have become – spoiled, stupid and greedy. Our last act at the top of the heap is, apparently, to commit seppuku while our former friends think it can’t come soon enough. There’s a line from an old song (I can’ t give you a name) that might be prophetic for America ‘the doctor said I’d get better, but I never would be well’, at least in my lifetime.
Shine, Perishing Republic by Robinson Jeffers.
While this America settles in the mould of its vulgarity, heavily thickening to empire,
And protest, only a bubble in the molten mass, pops and sighs out, and the mass hardens
and so on…his message, America is trading freedom for security.
Exports to the US are under 3% of China’s GDP.
China has the cards and Trump has a very sick economy. Trump must surrender to save himself in x or 2x DAYS. Xi has no ‘use by date’,at all.
Trump should have accepted Japan’s offer of close to no tariffs (at least on autos) and should be encouraging UK to do the 2.5% tariffs that they are already publicly discussing. Apologize to Canada and Mexico, bring in the rest of western Europe. Then he can go to China and ask Xi if he is ready to make a deal.
The real death to the US economy will come from China, when they go completely capitalist and democratic (at some point- this will happen overnight.) and from India, if/when they fix the corruption. These two societies/economies are much more merit based than US and they will easily take over the top spots from the US in the global economic order.
Enjoy being number one- because it won’t last forever.
I don’t understand why go after allies if the goal is to contain China.
Bravo H
Have not seen all the pieces woven together as well in any other publication out there.
Man…it pains me to acknowledge this as truthful but no sugar coating how feeble we’ve become in some respects. Give us pizza, Netflix, a spot on the couch and Instagram/TikTok and we’re content to lay around in ignorance / sloth with thumbs in our mouths all fat and happy (whatever that means these days).
“The US in 2025 doesn’t have any principles or discipline. We just want to be comfortable. Our pain tolerance is negligible. When someone shows us one of those hospital pain charts with the smiley face continuum and asks, “How would you rate your pain?” we automatically say “10,” even if it’s just a sprained ankle. The idea that Americans are going to fight an economic war of attrition with the descendants of the Long Marchers is wholly laughable.”
Excellent post.
On top of all the other sad and dispiriting jokes, it saddens me to see top-level diplomacy reduced down to a high school gossip game of who called whom or who hung up last in an insecure courtship.
Trump is sure good at negotiating. At least until the other party’s in the room.