Trump 2.0 official thread
- Thread starter siegecrossbow
- Start date
This is a technical adjustment, don't be afraid.Problem: debt maturity, persistent inflation, shifting alliances.
Plan:
Create uncertainty.
Debt refinancing and save billions.
Generate billions of revenue.
Expect domestic supply chain could catch up, reset global order, reshape alliances, China is forced to move, many bilateral deals, renegotiations, and resistance to be costly.
Benefit industries which align with Trump's political base.
Result: uncertainty?
Stephen Miran
A User's Guide to Restructuring the Global Trading System
Wikipedia
Link to PDF in Economic Views
Bla bla bla ... China bad .... Bla bla bla ...
we have a small fiscal and financial problem ... so ... with some tariff ...
we'll convince you to buy (drum roll)
"ultra long duration UST securities"
"century bonds", "perpetuals" ... Yeah
for eternity, never paying, infinity and beyoooond
A User's Guide to Restructuring the Global Trading System
Wikipedia
Link to PDF in Economic Views
Bla bla bla ... China bad .... Bla bla bla ...
we have a small fiscal and financial problem ... so ... with some tariff ...
we'll convince you to buy (drum roll)
"ultra long duration UST securities"
"century bonds", "perpetuals" ... Yeah
for eternity, never paying, infinity and beyoooond
Today's vocabulary lesson is brought to you by the Ministry of Finance.
On a related note, it looks like Tiktok was ready to sign a deal this week until Beijing froze it in response to Trump's tariffs.
As a result, Trump has now extended the deadline by another 75 days to allow for further negotiations.
On a related note, it looks like Tiktok was ready to sign a deal this week until Beijing froze it in response to Trump's tariffs.
As a result, Trump has now extended the deadline by another 75 days to allow for further negotiations.
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Tanvi Ratna is basically echoing what Yanis Varoufakis argued above. It's not her idea, and it is the right take.
Trump is trying to reset the global trading order. This will crush the markets (in the short-term, at the minimum) because the markets were built on assumptions of trade stability. Panic across many industries will be the default for several months.
The gamble is that they can transform the US into a manufacturing economy through exploiting demand & security leverage. Most of the world - particularly East Asia - does not consume nearly as much as the US, and many of them (especially Europe) rely on the US for security, so they'll be forced into a dilemma:
Seems like a great strategy until you realize two things:
And that is, effectively, what China has to ensure. It has to ensure that the US's "partners" have no life line by which they can both appease the US and keep their economies strong. It's no wonder, to this end, that the US mainstream media is using reverse psychology to try and bait China into filling in for the US as the global demand engine, right now. It's because that's the only way Trump's plan actually works and doesn't result in a global depression.
Trump is trying to reset the global trading order. This will crush the markets (in the short-term, at the minimum) because the markets were built on assumptions of trade stability. Panic across many industries will be the default for several months.
The gamble is that they can transform the US into a manufacturing economy through exploiting demand & security leverage. Most of the world - particularly East Asia - does not consume nearly as much as the US, and many of them (especially Europe) rely on the US for security, so they'll be forced into a dilemma:
- They can reduce trade & security treaties with the US and consume more themselves; this means less dollars exchanged and less dollars spent on defense, allowing the US to depreciate the dollar (or appreciate those countries' currencies), either way US products are more competitive.
- They can sign a deal with Trump, where they agree to buying more US products and paying more for security (e.g. balance the deficit), achieving effectively the same thing through subsidization of US manufacturing; in this scenario, which Trump prefers, the dollar can still stay relatively strong as those countries will essentially be forced to swap their currencies for the dollar to pay US exporters.
- They can, of course, also just eat the tariffs and subsidize their manufacturers, but that's the same as (2) except they get nothing in return.
Seems like a great strategy until you realize two things:
- Many of the "partners" targeted are already facing crises; e.g. South Korea, Taiwan, much of Europe, run export-based economies, and they just don't have enough demand themselves to support their industries, so they can't do (1), nor can they simply switch to selling to China, since the Chinese market is tapped out by domestic producers.
- If they appreciate their currencies, as the US demands, they accelerate their deindustrialization. This is basically Plaza Accords 2.0 and will lead to lost decades especially when these economies are already struggling with demographics and Chinese competition.
- If they subsidize the tariffs or buy more US products, they have to take on more debt. They can address the debt by printing more money, but that leads to inflation. This creates a race to the bottom effect that lowers living standards, encourages capital flight, and discourages economic activity (since why work if your labor is worth less every day?)
And that is, effectively, what China has to ensure. It has to ensure that the US's "partners" have no life line by which they can both appease the US and keep their economies strong. It's no wonder, to this end, that the US mainstream media is using reverse psychology to try and bait China into filling in for the US as the global demand engine, right now. It's because that's the only way Trump's plan actually works and doesn't result in a global depression.
Americans are certainly creative in their cope.
Even Trump knows he needs to get permission from Beijing...
Guys I think they're losing their minds...
AssassinsMace
Lieutenant General
The morning news has been quoting Trump that a TikTok deal is imminent. Yeah he's said that before on everything else. They even are now saying they might let China still control the algorithm with a minority stake. That's how it is now. But you know Trump he'll spin something that's no different from before out to be the greatest deal for the US ever like with NAFTA. Yeah before they were talking about only US side of TikTok owned by an American. Now they're saying the world except for China. That ain't worth just $30 billion like bidders are putting out there. It's worth more than its said $300 billion but China should for fun bait them and say a trillion dollars. You'd figure China's retaliatory tariffs today would've had Trump say Fu*k TikTok! But he's extending the reprieve another 75 days? If a deal is imminent, then you don't need 75 more days. The news even mentioning that TikTok has confirmed there's been talks. Yeah it goes something like this... The US: I want to buy TikTok. China: No! Yeah that can be spun as there's been talks.
