Im going to sit back and watch how this tariff war creates economic chaos....but I'm sure in the next months ahead after canada mexico and china retaliate Trump may just step back all the tarriffs together. You honestly think this tariff war is just a non event? You actually think that everything will be fine and dandy once these countries hit us back with retaliation, haa. Prices are going to surge. It's already been said by numerous companies that within days they will begin raising prices to combat the tarriffs on goods. And yes china has zero worries, they own the US. Do you really think china is worried? They are laughing at Trump, China has the upper hand and they will will show all their cards and stand Strong against any tariffs moving forward that Trump implements. If China was worried they wouldn't retaliate against the tarrifs Trump just issued. So get ready for super high inflation, high rates, unemployment at multi year highs and a collapsing equity market. And yes let's watch my quote age like milk left in the sun.....
I'm not saying its a non-event, but compared to everything else going on in the world its merely a drop in the bucket. All of your reasons are "Someone, somewhere in the media said: IT WILL BE BAD!!! WE LOSE, THEY WIN, blah, blah, blah". If actually happen to have anything to back up your bold statements, I'm more than happy to see it. China has no worries????? Some things that come to mind: - Real estate crisis (biggest the world has ever seen by an order of magnitude and still going) - Rising non-performing loans that they are being forced to renew for 30 years (from the real estate sector) - LGFV debts that can never be paid back - Youth unemployment over 19% (they stopped counting after that) - Deflation taking hold - Low consumption - Crumbling demographics On top of that, USA, Canada, European Union, India and Turkey have all put huge tariffs on Chinese EVs. The industry that China spends over $70 Billion USD a year subsidizing and is betting the farm on. They are falling apart internally but as with most Dictators, it cannot be said out loud or acknowledged by anyone inside China. They are terrified of a trade war especially when they are so vulnerable but they can't do anything to stop it. They are following in the path of Japan in the 90s but with much worse fundamentals going into it. Trump smacked them with some painful tariffs like a kick in the teeth. China turned around, flicked Trumps tie and then said "Yeah! There's more where that came from (blood still dribbling)" in order to try and save face. Its quite pathetic, but apparently you fall head over heels for click bait hype. China is a paper tiger. Nothing more. I look forward to your rambling reply that will likely not attempt address or acknowledge any of my points. PS* You should also note that I don't live in USA. I don't have a dog in this race, so I don't really care one way or the other. I'm an outside observer simply looking for trading opportunities, nothing more, nothing less.
If USA is imposing the tariff, that tariff will cause trouble in both the countries, but within different time frames. In the shorter time frame, China will hurt. In the longer time frame, USA will hurt. Again let me make it clear, when I say USA will hurt, that does not mean China will gain. This is simple macro-economics. I don't have a stake in either country. I am neutral.
What will China pay? China's tariff is on a much smaller scale. USA tariff is a larger increase. At first, US consumers pay. Then, US businesses will be forced to build US factories that are not the most efficient, but built just to avoid tariffs. This causes business losses in the long run. In the short run, US consumers lose and China businesses lose. In the long run, US businesses lose, US investors lose. Better run and viable US businesses will lose access to that capital because it was invested for wrong reasons. You need to do a course in macro-economics 101. I am neither Chinese nor American. I am neutral in my thoughts. I don't care even if both the countries fight one another and fall into the gutter. I am just pointing out the economic fallout behind this nonsense. Of course, China has other problems. That has nothing to do with tariffs. That is more about their communist nonsense agendas which they force down on their people.
If you compare the two countries based on real GDP, the difference you cited probably won't be so stark.
Building factories in the USA just to avoid tariffs is like starting farming in the cities because the cities don't want to let the money go to the villages. ET members who are so consumed with Trump drug better think about this.
Now let us look at it from another perspective. US imposes tariff on China. China imposes tariff on USA. The consumers in both the nations have to absorb higher costs. Now which people do you think can endure more pain? Chinese or Americans? 1. Upon slightest economic hardship, this country will vote out its government. A) USA. B) China 2. Upon slightest pain, people in this country run to their doctors asking them to recommend opium based drugs without enduring any pain. A) USA B) China 3. People of this country endured https://en.wikipedia.org/wiki/Great_Leap_Forward without complaining or bringing their government down A) USA B) China 4. People in this country work double shifts without any complaints. A) USA B) China 5, If businesses collapse and cause job losses, people in this country take to the streets and throw out the party in power in the next election A) USA B) China 6. This country killed its student protestors on the streets openly in 1989 and got away with no consequences. The regime continues and world leaders court this very regime. The country is A) USA B) China 7. In this country lobby groups can help change the governments A) USA B) China 8. In this country business leaders who don't follow the government line vanish from public space. A) USA B) China 9. In this country unhappy voters can tilt balances in Congress and Senate to make their president toothless and lame duck in less than two years. A) USA B) China Vote for the above questions and you have the answer as to what is the likely result of this tariff war.
And @volpri thinks he can fight using tariffs as weapon! Cowboy approach helps neither in trading nor in international affairs. This is precisely the problem with Trump and MAGA people. https://www.elitetrader.com/et/threads/canada-retaliates.383485/page-2#post-6100158
Are we comparing political systems or economic impacts on financial markets? No support for one side or other here, I'm in a different country. I'm just looking at the numbers myself and making my own best judgements.