China, frankly, has none of the cards.
As most of you here are aware, I do not like Trump, I do not support many of his policies, so I assure you, I am probably the most qualified here to give an opinion on this that isn't Trump cock sucking.
China is fucked. Beyond fucked.
The US uses consumer confidence and consumer spending as markers of economic health, because we're a developed nation and the largest consumer of goods on the planet. Xi derides using these as indicators, because, and I quote, it "undermines our true national strength, which is manufacturing." Basically, he is intentionally using the government apparatus to keep his people artificially poor to churn out cheap shit for the rest of the planet, with the end goal of depressing manufacturing in those countries. Economically we call this "overproduction" and "dumping." Both are heavily frowned upon and, in the US, illegal under price fixing laws.
China has, by design, centered its economy on other nations buying cheap bullshit it makes. This puts it at the whims of the consumer nations, because, as we've discussed, there is no domestic market to sell this shit to, by design. Tariffs are a good way to prevent your own people from buying unfairly dumped shit, which is why I wholeheartedly support absolutely fucking China by doing this.
Everyone talks about "China's options," including the "nuclear option" of cutting off America's rare earths, which it seems like they will do. This is also a fuck up. The US does not produce rare earths not because we don't have any, in fact, we have the largest verified reserves on the planet, but because it is dirty and we can import them from China for cheaper than what startup costs are for opening our own mines. This is an impetus for the US to dominate the Western rare earths market. Realistically, there is one option China has, which is what they did during the last Trump administration, which is to eat the tariffs cost and wait Trump out. For those unaware, the reason we didn't see cheap shit get more expensive during the last round of Trump's China tariffs, is because China used its cash reserves to pay the cost of the tariffs directly. China's government paid something like 80% of the tariffs directly, to keep dumping cheap shit here. That was with a 25% import tax. If Trump really does jack it up to 114%, which he should, by the way, and China continued to pay 80% of the tariffs, it would cost the Chinese something like $1.2tr, which, obviously, is completely unsustainable, especially considering China's already brutal credit crunch.
Track it to the S&P500 as an average measure of the American market to find an appropriate time.
