Interesting times we leave in... If someone goes away on vacation for two weeks and cuts off from anything news related, when they come back they may not understand much of what's being discussed, at least on tariffs, if they ever wanted to have an idea in the first place.
Tariffs on, tariffs off, tariffs up, tariffs down, old tariffs, new tariffs, first-hand tariffs, retaliatory tariffs. War trade and negotiations...
Trump probably feeds his ego well these days: half the world is knocking at his door or heating up the phone lines, trying to negotiate better deals before they go to war, or as they prepare to go to war, if things go south. The other half stays silent because they already got better deals and don't want to upset Trump by opening their mouths. Or they are... China and its proxies for export.
China really got a "special" treatment because they refused to bend over yet. Things can go really bad from here, because I see China determined to continue to call every time Trump raises. At least those were their initial signals, and their first retaliation was exactly that. But 104% tariff coming from Trump since midnight tonight? This is going to be a tough pill to swallow in either case, if they continue to escalate or if they back down once they started on the route of matching Trump's tariffs.
For the world, if they back down and they start to negotiate, it would be way better than the alternative. But who knows what they'll decide? After all, in my opinion, Trump raised so much especially because he wants this to deescalate, because he realizes his support will soon vanish if he continues this trade war. And he needs to force China into negotiations without actually calling for negotiations. China needs to ask for negotiations in Trump's opinion, like the rest of the world.
Unfortunately, this type of strategy reminds me of the way old empires used to treat their vassal states, which were forced to pay tribute to the higher powers or risk being punished in an uneven war.
But it's a different world now, and where yesterday China or Russia were presented (at least in western propaganda) as the big bad wolves, with this kind of attitude, today the United States surely wants to contend to that crown too. What will happen tomorrow, I wonder?
For example, the rumor I presented some time ago that Elon Musk is no longer in Trump's inner circle seems to be true, as he distanced himself from the tariffs frenzy and had a public conflict with Trump's trade advisor, who started first, by calling Tesla a "car assembler". The prediction of many (including myself) that Trump and Elon Musk won't finish 2025 as "friends" seem closer and closer to becoming reality...
Trump also hinted about a new wave of tariffs on pharma companies... The question is... how long can he keep this going? I don't think he gives a damn about external reactions, but he cares about what happens inside the United States. And from what I hear, domestic wave of discontent is mounting...
People are of course worried about the likely rises of prices. But on the macro level, the thing probably the US administration would like to avoid, given how indebted it is, is to have the yield of the Treasury Bonds rates go up. And they all did, recently, as the trade war ramped up. Look at the US 10y Bonds since March:
And that happens despite Trump managing to scare big investors off to sell stocks and buy bonds instead...
