Source: The Wall Street Journal, January 31, 2025.
It is a sad day …
… when I trust the word of the CCP over the POTUS.
But I see no alternative, when the Commander-in-Chief is such a fire hose of lies.
And I’m not alone. Judging from the state of the markets today, U.S. investors are now relying on the Chinese Communist Party for accurate information regarding U.S. tariffs. And dismissing the blathering of our President.
If that doesn’t tell you everything you need to know about our Federal government these days, then you’ve clearly drunk the Kool-Aid.
Why should China accept “just kidding” as the end of Trump’s latest foray into useless, punitive tariffs?
It’s pretty clear that whatever-the-hell today’s tariff on China is, it has imposed hardship and disruption on Chinese exporters, and the industries behind those exports.
If there’s no penalty for imposing these ludicrous and thoughtless tariffs, and then trying to bully other countries into accepting them, and then trying to extract concessions under the promise of removing them, and now lying about making progress toward taking them off …
Then, won’t Trump just do this again, whenever he takes a notion to? Like, if we ever get a calm couple of days in a row, isn’t a new tariff a great way to re-focus the world’s spotlight on Trump?
The now-universal lean-inventory just-in-time-delivery model — where every business entity in the world has substituted sophisticated delivery systems for stockpiles of physical inventory — means that full shelves in the stores are mostly an illusion. The shelves are full not because there’s a huge warehouse of finished goods somewhere, from which additional product can be drawn, but because the existing system of production and delivery of goods is perfectly matched to average consumer demand.
Have we forgotten the lesson of toilet paper shortages already? Production is tightly matched to typical demand. Disrupt either production or demand, and the resulting empty shelves can last for months. And months. And months.
Recall the port strike? Mere rumor of TP shortage resulted in sporadic local outages. That’s all it took.
If I were China, I might be tempted to try to remind us of that. It’s not materially different from beating on an untrained animal, to try to get the behavior you desire from it.
Best guess — and this is coming from the CEO’s of Walmart and Target — it would only take a couple of months before entire categories of consumer products would disappear from the U.S. retail shelves.
More importantly, I’d guess that the same time frame applies to Chinese-made inputs to U.S. industry. At which point, we start layoffs as factories idle waiting for critical components.
Pretty sure it wouldn’t take long before we’d be in a world of hurt.
Sure, the Chinese would be hurting as well, from the loss of exports. But they seem to have their shit together a whole lot better than the U.S. does, for weathering this particular storm.
Conclusion
My guess is, as long as the POTUS continues to lie about tariffs, the Chinese will keep their distance.
I’m betting they can afford to wait a lot longer than we can.
Bluffs don’t work when everybody knows what cards you actually hold.
Maybe the POTUS gets that.
But maybe the same brilliance that bankrupted casinos is hard at work bankrupting the U.S.
