Trump 2.0 official thread

[AssassinsMace]

Why are you thinking like there is some sophisticated logic to what Trump does? After you just saw this tariff nonsense?

If Trump fires Navarro, it's because somebody has to be blamed or punished for this mess.

If Trump doesn't fire Navarro it's probably because he doesn't want to admit that this debacle was a total failure.

Navarro is a loyalist and Trump likes them. It’s that simple.

 

[obj 705A]

It's not like China is immune from the effects of the trade war. Aside from Chinese businesses suffering from the effects of the tariffs, you also have the PBOC forcibly devaluating the Yuan, hereby decreasing the purchasing power of the average Zhou (average Chinese citizen) and also promoting capital outflow. And all of this is happening while the Chinese economy is still trudging from the leftover effects of COVID.

If China's government has its citizens in its ear, it would see this opportunity as an off-ramp. It's very rare to see someone like Donald Trump give these signals; this is as close to "let's negotiate" as you're ever going to get with someone like Trump.

Of course, there is the possibility that the exemptions have nothing to do with Chinese pressure, in which case all of the above is moot.

China should only accept negotiating with the US after Vance apologizes for his "Chinese peasants" comment. otherwise forget it. we have seen during the Covid pandemic that the Manufacturer has the upper hand not the importer. during Covid American states were the ones trying to outbid each other to buy stuff from China. if the US was in China's position Trump would have been saying "they are kissing my a** to buy venilators & PPE from me." but of course China has enough decency and self respect that they wouldn't say something like that.

 

[manqiangrexue]

It's not like China is immune from the effects of the trade war. Aside from Chinese businesses suffering from the effects of the tariffs, you also have the PBOC forcibly devaluating the Yuan, hereby decreasing the purchasing power of the average Zhou (average Chinese citizen) and also promoting capital outflow. And all of this is happening while the Chinese economy is still trudging from the leftover effects of COVID.

CCP will have to make the calculation if what it might suffer is worth what it can inflict on the US economy. One thing is for sure; America wants these specific exemptions, so it means that denying these deals targeted damage to America's weakness, increasing the likeliness that it would be worth it. If they were smart, they'd keep that exemption list private and make them at its ports, but if they were smart, we wouldn't be doing any of this stupid bullshit today. Publishing the list is painting the targets for China.

If China's government has its citizens in its ear, it would see this opportunity as an off-ramp.

Chinese citizens want trade war with these ass hats. Only those without pride want an off-ramp after being threatened.

It's very rare to see someone like Donald Trump give these signals;

That is why they signal weakness. When the enemy is weak, it is your signal to attack.

this is as close to "let's negotiate" as you're ever going to get with someone like Trump.

That he's a stubborn dumbass is our problem? He wants to negotiate; let him wait on a silent phone. We have a growing economy while America's is near recession.

Of course, there is the possibility that the exemptions have nothing to do with Chinese pressure, in which case all of the above is moot.

These exemptions are America's weakness. China's currency devaluation has nothing to do with American pressure; you don't devalue 1% to offset 145% tariffs.

 

[JJD1803]

Navarro is a loyalist and Trump likes them. It’s that simple.

Exactly. It’s more likely that Elon will be fired or forced to leave before Navarro. Trump values loyalty over everything. That’s why he has selected people who are loyal not competent for the job. Elon’s DOGE initiative is a failure. It didn’t really make anything efficient. It helped Trump purge the federal bureaucracy but the cuts are minuscule saving only a couple billion dollars compared to the entire federal budget. Ron Vara is here to stay.

 

[siegecrossbow]

Apparently Trump and Ron Vara based their Trade War projections on analysis by Chinese libtards…

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[tygyg1111]

I don't know if it's just me but I feel like a lot of the bravado that defined the MAGA hive mind last week is gone.

The arrogance and hubris they had last week has been replaced by resignation and a quiet realization that in this trade war with China , Trump is more like Zelensky without international sympathy. He actually doesn't have the cards he thought he had .

Even outspoken ass kisser Bill Ackman is now saying and the US and China should now talk .

There is a way to regain that bravado, that some may consider, unnatural:

https://twitter.com/i/web/status/1911140176765792427

 

[plawolf]

Apparently Trump and Ron Vara based their Trade War projections on analysis by Chinese libtards…

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As the first rule of data analysis shows, trash-in =
Trash-out. But if you build a model on wishful thinking and feed it trash fake data, is it any wonder you get an Idiot Sandwich result?

The only factor about Trump’s tariffs move that surprised China was how batshit insane and utterly stupid it was.

Paradoxically, this is likely to reduce the likelihood of a kinetic confrontation as China has to both dial up the stupidity levels of its American behaviour model by a massive level, as well as dial down its assumptions about America’s self preservation awareness capabilities. This might mean it’s model predicts America will press the Big Red Button in the event of war because it’s too stupid and stubborn to understand the consequences of doing so beyond the immediate gratification it gets from being able to hurt the foe.

 

[lych470]

Apparently Trump and Ron Vara based their Trade War projections on analysis by Chinese libtards…

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Miran's report was touched upon earlier in this thread, and it was greeted with the corresponding level of contempt that the report merits.

Pretty sure whoever posted that stuff on Zhihu is also active here - my man even says that he's mainly a military buff but happened to stumble across that particular report.

As an aside, I find that more and more Americans are now using language that makes them sound smart. Lots of 'may', 'could' and 'potential' being thrown around. It's intellectually dishonest and lazy, as you don't have to justify your assumptions and the necessary train of logic to arrive at your conclusions. Miran's piece was replete with them. Too much fluff and not enough crunch.

 

[BillRamengod]

Apparently Trump and Ron Vara based their Trade War projections on analysis by Chinese libtards…

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Actually used DeepSeek to translate the article→ Took too long to organize→ Went to grab a meal→ Already posted it here by you

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ANYWAYS, here's traslate for non-chinese audience:

Author: Yamato Hasegawa
Source: Zhihu (Chinese Q&A platform)
Link:

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While browsing today, I stumbled upon a report written last November (2024) by Stephen Milan, former chair of Trump's Council of Economic Advisers, analyzing the 2018 trade war and proposing follow-up strategies. After skimming through it, I was simultaneously shocked and enlightened - suddenly, Trump's recent outrageous economic maneuvers made perfect sense. Below I've attached the original document for those interested in primary sources.

Here's a simplified breakdown of the report's key arguments that explain "Trumpconomics" in action:



Preface, Summary
Stephen Milan argues that Trump successfully pressured China into making concessions (or, as implied in the report, "kowtowing") during the 2018 trade war, benefiting the U.S. Meanwhile, China's economy would be utterly unable to withstand higher tariffs, so in the future (from the perspective of 2024, i.e., now), merely brandishing the tariff stick would again force China to "kowtow" and absorb the costs for MAGA, with no meaningful retaliation from China expected.

1. Why Aren’t Trump and His Team Worried About Inflation?
Milan cites a concept called Currency Offset (p. 13). In simple terms, by imposing tariffs, the exporting country is forced to devalue its currency to maintain export volumes, while monetary policy measures are used to strengthen the domestic currency. The resulting exchange rate differential offsets the inflationary impact of tariffs, with the added benefit of federal revenue from the tariffs.

The report claims that after the 2018-19 tariffs, import prices rose by only 4.1%, and CPI increased by just 2%, below the Federal Reserve's target (p. 14).

It also states that under a 10% tariff, the impact on CPI would be a one-time increase of 0.3%-1%, not leading to sustained inflation (p. 16).

Tariffs provide revenue, and if offset by currency adjustments, present minimal inflationary or otherwise adverse side effects, consistent with the experience in 2018-2019 （p. cover）.

Therefore, Trump and his team are not concerned about tariffs causing inflation—even if there is any, it would only be "temporary."

2. Why Do Trump and His Team Believe the Cost of Tariffs Will Be Borne by the Exporting Country?

Direct quote from the original text:

In a world of perfect currency offset, the effective price of imported goods doesn’t change, but since the exporter’s currency weakens, its real wealth and purchasing power decline. American consumers’ purchasing power isn’t affected, since the tariff and the currency move cancel each other out, but since the exporters’ citizens became poorer as a result of the currency move, the exporting nation “pays for” or bears the burden of the tax, while the U.S. Treasury collects the revenue （p. 16）.

（In 2018-2019） Chinese consumers’ purchasing power declined with their weakening currency, China effectively paid for the tariff revenue. ... that experience should inform analysis of future trade conflicts （p.3）.

Thus, Trump and his team stubbornly believe that the cost of tariffs will be borne by the exporting country (China).

3. Why Do Trump and His Team Think China Will "Kowtow" Again This Time?
Or, in other words: Why are Trump and his team so convinced that China will inevitably "call" and come to the negotiating table to strike a deal?

Direct quote from the utterly absurd original text:

magine a very large tariff on China, say a sharp increase in the effective tariff rate from roughly 20% to roughly 50%, offset by a similar move in the currency. A 30% devaluation in the renminbi would most likely lead to significant market volatility. Because China’s communist economic system necessitates strict control over the capital account to keep funds locked in domestic assets, the incentives to find ways around capital controls could be devastating for their economy （p. 18）.
Capital outflows from China can potentially result in asset price collapses and severe financial stress. According to Bloomberg, total debt in the Chinese economy exceeds 350% of GDP; this level of leverage entails the possibility for massive vulnerabilities to leakages in the capital account. Bursting bubbles in China as a result of currency devaluation could cause financial market volatility significantly in excess of that caused by the tariffs themselves （pp. 18-19）.

China’s economy is dependent on capital controls keeping savings invested in increasingly inefficient allocations of capital to unproductive assets like empty apartment buildings. If tit-for-tat escalation causes increasing pressure on those capital controls for money to leave China, their economy can experience far more severe volatility than the American economy. This natural advantage limits the ability of China to respond to tariff increases （p. 26）.

Thus, Trump and his team are convinced that China will inevitably "kowtow" again this time, and that they will soon receive a call from Beijing—because they believe China's "fragile" economy cannot withstand even the initial 34% tariffs.

So when China announced equivalent countermeasures, Trump's first reaction was shock and disbelief, dismissing it as the "Chinese" bluffing. He immediately fell back on his old playbook of maximum pressure, boasting that "the call from China will come any moment now." But clearly, he miscalculated.

4. What Kind of Deal Do Trump and His Team Want to Reach?
In the report, Milan proposed several schemes for China to "compensate" the U.S., likely reflecting the kind of "deal" Trump hoped to extract from China. Below are some of the most representative examples for your consideration.

The U.S. Government might announce a list of demands from Chinese policy—say, opening particular markets to American companies, an end to or reparations for intellectual property theft, purchases of agricultural commodities, currency appreciation, or more （p. 22）.
It is easier to imagine that after a series of punitive tariffs, trading partners like Europe and China become more receptive to some manner of currency accord in exchange for a reduction of tariffs（p. 28）.
Last time, tariffs led to the Phase 1 agreement with China. Next time, maybe they will lead to a broader multilateral currency accord（p. 35）.
There is another potential use of the leverage provided by tariffs: an alternative form of Mar-a-Lago Accord that sees the removal of tariffs in exchange for significant industrial investment in the United States by our trading partners, China chief among them（p. 35）.

Additional Demands
The report also proposes requiring China to:

• Replace standard U.S. Treasury holdings with century bonds
• Place these under custody in U.S. Treasury-managed portfolios

In essence, these are the kind of "agreements" that would condemn any signatory to centuries of historical infamy - such blatant financial bullying thoroughly discredits all appeasement arguments.

 

[BillRamengod]

5. Where Trump's Actions Diverge from the Report's Recommendations
To summarize simply:

• Milan advocates gradual tariff escalation to minimize market disruption and increase China's likelihood of concession (pp. 21-26)
• Tariff rates should be carefully calibrated based on individual country analyses

Yet Trump's current approach blatantly ignores these suggestions from his own former CEA chair.

6. Treatment of Allies (Slightly Off-Topic but Worth Noting)
While tangential to the main discussion, we'll include this for its entertainment value:

While many economists... happy to rely on trade partners and allies for such supply chains, the Trump camp does not share that trust. Many of America’s allies and partners have significantly larger trade and investment flows with China than they do with America; are we so sure we can trust them, if worse comes to worst （p. 5）?
Suppose the U.S. levels tariffs on NATO partners and threatens to weaken its NATO joint defense obligations if it is hit with retaliatory tariffs. If Europe retaliates but dramatically boosts its own defense expenditures and capabilities, alleviating the United States’ burden for global security and threatening less overextension of our capabilities, it will have accomplished several goals. Europe taking a greater role in its own defense allows the U.S. to concentrate more on China, which is a far greater economic and national security threat to America than Russia is, while generating revenue （p. 26）.

Summary

Based on the 2018 trade war experience, Stephen Milan asserts that imposing tariffs on China would effectively

• • Alleviate the U.S. dollar's decline
  • Stimulate domestic investment
  • Cause minimal adverse effects

He portrays China's economy as exceptionally fragile with extremely limited capacity to withstand tariffs, inevitably forcing China to "grovel" and proactively accept unfavorable terms with the U.S.

The entire report is saturated with baseless assumptions ("it stands to reason") and unfounded personal opinions ("I believe"), exhibiting an idealism reminiscent of Imperial Japan's military strategists drafting their "certain-victory" battle plans against America. This brings to mind the U.S. Defense Secretary's tone-deaf speech at Iwo Jima proclaiming: "Iwo Jima embodies our shared warrior spirit." The irony is indeed palpable - America's slapdash administration truly does share a "common spirit" with those Shōwa-era military planners [laughs].


P.S. After reviewing comments, adding a bit more:

Regarding the exporting country's currency devaluation...

[T]o the extent there are no meaningful changes to, then there will be no rebalancing of trade flows as a result of the tariffs. If imports from the tariffed nation become more expensive, then there will be some rebalancing of trade flows but also higher prices; if imports from the tariffed nation do not become more expensive because of currency offset, then there’s no incentive to find cheaper imports. One must choose between higher prices and rebalancing trade. Revenue is an important part of this story (pp. 13-14).

Milan contends that after tariff increases, China would likely devalue the yuan to maintain export volumes for economic stability. However, due to domestic economic constraints preventing significant devaluation, China would ultimately be compelled to negotiate with the United States.

The U.S. could then leverage this situation to:

1. Force long-term economic agreements
2. Gradually increase export prices of Chinese goods through:

• Controlled tariff escalation
• Managed yuan appreciation

3.Achieve three strategic objectives while maintaining low inflation:

• Sustain reduced reliance on Chinese exports
• Facilitate industrial repatriation
• Maintain controlled inflationary pressure

On Tariff Implementation Strategy

The U.S. can proceed to gradually implement tariffs if China does not meet these demands. It might announce a schedule, for instance, a 2% monthly increase in tariffs on China, in perpetuity, until the demands are met (p. 22).
Such a policy will 1) gradually ramp tariffs at a pace not too different from 2018-2019, which the economy seemed able to easily absorb; 2) put the ball in China’s court for reforming their economic system; 3) allow tariffs to exceed 60% midway through the term, which is something President Trump has expressed wanting (“60% is a starting point”); 4) provide firms with clarity over the path for tariffs, which will help them make plans to deal with supply chain adjustments and moving production outside of China; 5) limit financial market volatility by removing uncertainty regarding implementation (p. 22).

Milan's analysis suggests that during the 2018 trade war, rather than imposing tariffs immediately, Trump adopted a gradual escalation approach through coercive threats, ultimately achieving an effective tariff rate of approximately 18% over more than a year (p.21). The report posits that a similar incremental strategy—raising tariffs at a controlled pace—could be employed this time to pressure China back to the negotiating table.

While a measured escalation (e.g., 2% monthly increases) appears more strategically sound than Trump's initial 34% tariff demand, the report later undermines this reasoning. Milan accuses China of acting in bad faith, particularly regarding breaches of the Phase One agreement, and ultimately advocates a "tariffs-first, negotiations-later" approach—a tactic consistent with Trump's actual modus operandi. The text includes effusive praise for Trump's hardline tactics (replete with the expected political flattery).

Follow-up Plan

The latter sections of the report elaborate on how monetary policy could be leveraged post-tariff to facilitate U.S. reindustrialization. While not central to the immediate discussion, the proposed mechanism involves:

• Currency Manipulation: Engineering RMB depreciation and USD appreciation to redirect capital flows toward the U.S., revitalizing domestic manufacturing.
• Plaza Accord-Style Adjustment: Subsequently devaluing the USD to boost export competitiveness, completing the economic "harvest."
• Risk Transfer: Shifting U.S. Treasury debt risks onto treaty partners (detailed analysis begins on p.27).

Additionally, the report outlines unilateral "monetary policy" measures under the International Emergency Economic Powers Act (IEEPA), including:

• Imposing fees on foreign-held U.S. Treasuries
• Temporarily freezing USD-denominated remittances

These steps would further consolidate control over exchange rates—prompting the ironic observation: So who's the real currency manipulator here? [laughs]