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Originally Posted by Tiny
China's year on year change in exports was 8.3%, 4.3%, and 7.1% in September, August and July respectively. This would indicate the USA isn't going to attain "escalation dominance" with tariffs. I bet if the USA cuts off more high tech exports to the Chinese and they continue to cut off rare earth products to the USA, the United States will come out on the short end of the stick.
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Late last week, I was reading some notes posted by a private-sector macroeconomist who's a trade specialist and whose opinions I've long respected. His estimates are in line with those numbers and he spoke of China's efforts over recent months to aggressively pursue exports to a number of other nations, even at some margin-compression cost. He notes that's something China can live with, especially as through AI and advanced robotics they've been achieving even more manufacturing efficiencies, including for cheap, low-value-added goods -- the sort of crap people buy in huge quantities online and in giant box-stores.
I think the following two items can be viewed as solid "tells" that a Chinese cutoff of rare earth exports to the US was unlikely:
First, Trump said in interviews last week that he was seeking a deal that would be good for the "people of China"(!) as well as for the US. That signaled that he wanted to give Xi a "face-saving" result that could be claimed by the latter as good for his side, including the opportunity to craft a defensible narrative allowing accommodation to US needs to keep trade flows sustained, especially for critical minerals, and to Trumps need to avoid anything that could be spun by the media as an abject failure. And now Trump is sweetening the deal further for Xi by floating further tariff reductions if China will do more to rein in its exports of [redacted.]
Second, the markets seemed not only quite sanguine about a possible rare earth standoff, but positively giddy as the US equity indices have spent the last five or six trading days bulling their way to new all-time highs. Obviously, that wouldn't be happening if the markets feared economy-impeding rare earth shortages.
Quote:
Originally Posted by Tiny
You don't play chicken if you've got a Corvette and the other guy has a Mack Truck.
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Though my views in forum discussions have usually been aligned with yours, I must disagree here.
I submit that the Corvette is a
perfect car to drive if you're hell-bent on playing a game of chicken, for its great maneuverability allows you to pull off a deftly-executed swerve
at the very last second!
Don't try that in a heavy truck! You'll have to start your swerve much earlier in order to avert a "lose-lose" catastrophe, thus conceding a bit earlier that you "chickened out!"
