The answer to "2" is "get a better deal from China".
Trump seems to refuse to acknowledge that there will be a cost to the tariff war. Some of his minions talk about short term pain in exchange for longer term benefits, but not Trump. So one does wonder if he can't be outlasted.
All things being equal, our economy should be better positioned to weather this storm. But their political system is infinitely better positioned to weather the storm, because they are a totalitarian regime. Short of true armed insurrection, they can bear pain for a really long time (eventually, Xi might be toppled via internal party workings, but he is thought to be the most powerful premier since Mao, and Mao more than survived the Cultural Revolution, which was a national calamity for them).
My guess is there is an amount of market pain that will make Trump cry uncle heading into the election. Or not even - Trump wants a great trade war victory to carry into his campaign. And his lessons from his base suggest all he has to do is declare victory. He doesn't need an actual victory. He just needs to claim one at his pep rallies, and the people who attend those things won't care how real it is.
So if I'm Xi, I probably just dig in my heels and wait him out. Odds are pretty good the orange one is going to blink first.
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In response to this post by Hoo TV)
Posted: 05/13/2019 at 12:50PM