I was watching this Dave Rubin clip of Bill Maher talking about why capitalism is superior to socialism. All of which is true, but he got something mostly wrong that I want to talk about, including the interesting truth he didn’t quite elucidate.
Here’s the quote I wanted to zero in on: “In 1990, Venezuela was wealthier than Poland. But then Poland, finally free of Soviet style economics, went all in on capitalism. And now their economy is as big as Japan and people there have high wages, low inflation, cars, vacations, homes. Meanwhile, Venezuela traded capitalism for Hugo Chavez’s socialism for the 21st century, which turned out to be like socialism in the last century or any century, a mess. It turned one of Latin America’s richest countries into one of its poorest.”
Emphasis added. And everything else Maher said is correct. But Poland does not have an economy as big as Japan.
According to Statista, the size of Japan’s 2025 economy is $4.186 trillion, while that of Poland is $979 billion. In terms of sheer size, Poland’s economy isn’t nearly as big as Japan’s, mainly because Japan has roughly three times Poland’s population.
I think what Maher meant to say is that Poland’s standard of living, as measured by per capita GDP, is now on par with Japan. Here’s a piece from National Review:
2026 — the year Poland’s GDP per capita is projected to surpass Japan’s, according to data from the World Bank and the International Monetary Fund.
Poland, a Soviet-dominated communist state until 1989, is expected by next year to have higher economic output per person than Japan. For perspective, according to the World Bank (all of these numbers are adjusted for inflation and purchasing power between countries), Poland’s GDP per capita was $12,810 in 1990. That was roughly the same as Brazil’s and over $4,000 behind Mexico’s. Japan’s was almost three times higher, at $35,306. In 2023, the most recent year with available data, Japan’s was $45,949 and Poland’s was less than $2,500 behind, at $43,585. A gap of over $30,000 per person, gone in one generation. According to the IMF, Japan’s economy slightly contracted in 2024, and projected growth is around 1 percent in 2025 and 2026. Poland grew at nearly 3 percent in 2024, and projected growth is greater than 3 percent in 2025 and 2026. Why have you heard little about this decades-long and ongoing economic success story? Probably because it wasn’t the result of industrial policy or some other government plan. Under the guidance of economist Leszek Balcerowicz, Poland went all in on free markets during its transition to democracy. It has averaged annual GDP growth of about 4 percent per year since 1990, blowing right past the “middle-income trap” and joining the ranks of the great developed economies such as Japan. As late as the early 1990s, it was still fashionable to believe that Japan was going to inherit the earth as a result of its industrial policy. Imagine explaining to someone then that in your lifetime the average Pole would become wealthier than the average Japanese. Be skeptical of industrial policies, and never underestimate the power of markets.
Other figures show Japan a bit farther ahead, but Poland’s per capita GDP is clearly now in the same neighborhood as Japan’s, thanks to decades of capitalist growth in Poland, and dropping population and ineffective Keynesian stimulus (AKA “Abenomics”) in Japan.
Although Habitual Linecrosser likes to call Poland “Little European Texas,” economically it’s closer to the state of Georgia, while Texas’ economy is closer in size to that of Italy (the eighth largest economy in the world).
So Maher’s statistic was wrong, but his implication was correct: By abandoning communism for capitalism, Poland has made remarkable strides, and is now a modern, wealthy, productive nation.
Having been out of work for a while, people ask me if I’ve been displaced by AI. My reply is “Not directly.” Indirectly, I think the factor is that just about all venture capital funds are throwing money at AI-related companies, meaning non-AI startups that might need technical writers aren’t being funded.
Having lived through the dotcom bust, I have to wonder how bad the fallout from the AI bubble bursting is going to be. The dotcom bubble wasn’t all beenz and pets.com…
…and it fueled a whole lot of subsidiary bubbles: PC and server manufacturers to run the software, Microsoft to run the PCs, semiconductor manufacturers to provide chips for the PCs and servers, semiconductor equipment manufacturers to build those same chips, network gear providers to connect the data centers, etc. And that only scratches the surface. Cisco, Dell, Compaq, Netscape, Yahoo, AOL, Oracle, Sun, HP, Intel, AMD, Applied Materials (where I worked 1997-2001), LAM Research, KLA-Tencor, all had huge growth spurts during the dotcom era as their customers spent big money to get “on the web.” Even dinosaurs like IBM, Motorola and DEC enjoyed business boosts from the era. All suffered in the wake of the dotcom bust, some being bought up or disappearing into other companies.
The same is true of today’s multi-trillion dollar AI boom. Companies like OpenAI may get the most ink, but a whole lot of other companies are getting boosted as well. Some of the names are even the same as the dotcom bubble: Microsoft, Oracle, AMD. Applied Material stock has gone through the roof now that I don’t own any. Cisco is just getting back to the level of their record stock highs during the dotcom era.
Data centers are supposedly planned or going up all around the country, and so many are buying Nvidia’s AI chips that they now boast a breathtaking $4.88 trillion market cap.
Someone is supposedly going to build a $165 billion data center in New Mexico near El Paso. That number is kind of insane, as you could build 5-10 cutting edge fabs for that kind of money. I don’t see how you get any sort of ROI on such a big upfront investment.
When the AI bubble busts (not if, when), a whole lot of these projects will likely come a cropper. A lot of people will have made a lot of money, AI will probably revolutionize a few industries and prove mostly hype in others, and retail investors and bondholders will be left holding the bag. Like the doctom bust, a lot of new companies will rise from the wreckage and start the cycle all over again.
And companies that can best take advantage of idle data centers and newly abundant nuclear power (assuming the boom even lasts that long) will be the ones poised to help build the next tech boom…
President Trump wins another huge (and hugely favorable) trade deal for America, more Obama/Clinton skullduggery exposed, a whole lot of sick perverts get arrested, Nigel Farage plays Cassandra, Russia gets hammered by both Ukraine and God, plus an unusually high amount of hypercars and Star Trek.
It’s the Friday LinkSwarm!
Winning: “Trump strikes massive trade deal with EU on energy, arms, tariffs.”
The United States has reached a trade deal with the European Union after President Donald Trump pressured the group of nations, as well as others, to open up trade with the US using the threat of tariffs.
While being joined by EU Commission President Ursula von der Leyen, Trump detailed the plans for the deal. “The European Union is going to agree to purchase from the United States $750 billion worth of energy.”
“They are going to agree to invest, into the United States, $600 billion more than they’re investing already. So they’re investing a large amount of money. … They’re agreeing to open up their countries to trade at zero tariff,” Trump added. “So that’s a very big factor, opening up their countries. All of the countries will be opened up to trade with the United States at zero tariff, and they’re agreeing to purchase a vast amount of military equipment.”
The president added that the number for the military equipment is not exact, and then also said the EU imports to the US will have a “straight across tariff of 15 percent” on automobiles and other goods. The tariffs on EU goods were previously in the single digits on average, according to the New York Times. The EU had hoped to reach an agreement for 10 percent across the board on tariffs.
The Very Best People repeatedly told us that President Trump’s tariff strategy would inevitably plunge us into a trade war and send the economy into a recession, if not a recession. It turns out, once again, that Trump has far better grasp of negotiating strategy than they do.
When Mr. Trump first unveiled his reciprocal tariffs, virtually all the important foreign countries flocked to make a deal with him; they ignored Communist China.
Why is that? Because America’s the greatest country in the world. With the best economy.
And nobody trusts the Chinese to do anything, much less honor a trade deal.
What’s more, Mr. Trump and his team have already made a number of deals with the United Kingdom, the European Union, Vietnam, Indonesia, the Philippines, Japan, and South Korea.
Talks with Mexico are constructive and will be extended.
We can’t be sure, but it’s likely that the China talks will be extended.
In general, Mr. Trump is charging a very modest 15 percent or 20 percent fee as the price for doing business with the greatest economy in the world.
That modest fee could generate something like $400 billion a year in tariff revenues.
And here’s his new wrinkle: vast foreign direct investment into America
For example, $600 billion from the EU, and perhaps another $600 billion from Japan. Maybe $750 billion from EU energy purchases. Think clean burning LNG produced by America’s first in the world energy industry.
Direct investment pledges of as much as $5 trillion or $6 trillion coming from governments and companies all around the world — including the Middle East. And even in Asia — with South Korea putting up $350 billion.
We’ll learn more about how this direct investment is going to work, but the point is — the stimulus from all of that vastly outweighs any fiscal drag from the mostly moderate reciprocal tariff rates.
That’s Mr. Trump’s brand-new wrinkle. And it’s a very clever ploy.
FBI Director Kash Patel found a trove of sensitive documents related to the origins of the Trump – Russia probe buried in multiple ‘burn bags’ in a secret room inside the bureau, sources told Fox News Digital.
Sources told Fox News Digital that the ‘burn bag’ system is used to destroy documents designated as classified or higher.
Sources told Fox News Digital that multiple burn bags were found and filled with thousands of documents.
Sources exclusively briefed Fox News Digital on some of the contents of the classified annex — including that the U.S. intelligence community had credible foreign sources indicating that the FBI would play a role in spreading the alleged Trump – Russia collusion narrative — before the bureau ever launched its controversial Crossfire Hurricane probe.
A source familiar with the contents of the classified annex told Fox News Digital that while it may not have been exactly clear in the moment what the intelligence collection meant, with the benefit of hindsight, it predicted the FBI’s next move ‘with alarming specificity.’
White House Press Secretary Karoline Leavitt took members of the press corps to task over their refusal to cover newly released evidence that shows Hillary Clinton approved the Russian collusion hoax against Donald Trump.
Leavitt’s comments come on the heels of a newly declassified appendix to the Durham Report that exposes a reported Clinton campaign plan to falsely accuse President Trump of collusion with Russia.
Leavitt chided members of the press, telling them, “This is a story that every outlet in this room should be covering,” and that “This is further evidence that Hillary Clinton approved the Russia Hoax against President Trump. Her campaign financed it.”
Leavitt added that “the FBI and the CIA were both weaponized to accelerate this hoax against then-candidate and former president Trump.”
The Press Secretary told reporters that, “The president wants to see justice served and he trusts the Attorney General and the Department of Justice to implement that justice and hold these people accountable.”
The so-called “Durham annex” to John Durham’s Special Counsel report was released yesterday by Senate Judiciary Committee Chairman Chuck Grassley (R-IA) and brings previously classified information to light regarding the Clinton campaign’s plans to falsely tie Trump to Russia.
In a press release, Grassley said, “History will show that the Obama and Biden administration’s law enforcement and intelligence agencies were weaponized against President Trump. This political weaponization has caused critical damage to our institutions and is one of the biggest political scandals and cover-ups in American history. The new Trump administration has a tremendous responsibility to the American people to fix the damage done and do so with maximum speed and transparency.”
Travel back in time to the year 2021 and you might find yourself in the middle of a bizarre debate over the virtues of “cancel culture”. At the time the political left was aggressively trying to secure long term power within the US through a multi-pronged psychological offensive – A war on the minds of the masses designed to force Americans into submission.
A big part of their strategy relied on the fundamentals of Cultural Marxism: The combination of Marxist mob tactics, artificial consensus and the exploitation of minority grievances as a vehicle for controlling speech. This was the rise of the “woke movement” to the halls of government.
The root of their power was not martial. In fact, the political left is weak and largely astroturf with minimal ability to project power in a physical way. If conservatives wanted to destroy them tomorrow the task would be relatively easy. We don’t because many of us still have hope that our problems can be solved through peaceful discourse.
What the leftists did have at their disposal was a massive institutional apparatus of government agencies, corporations, Big Tech and NGOs. The full might of the establishment cabal was on their side, which meant they had the means to enforce “cancel culture” and silence their ideological opponents.
I don’t think there has ever been a psychological war on a population that was more pervasive and tyrannical. Not since Mao’s Cultural Revolution in China has a citizenry been under such a siege by their own government. The fact that we survived this event, defeated the onslaught and actually grew a grassroots anti-woke movement without the use of social media forums is truly mind blowing.
Very few people today realize the level of victory that was achieved. We thwarted perhaps the largest 4th Generation “mind war” ever devised and we did it without any institutional access. We won by simple truth and word of mouth.
Another tool that the leftists and globalists used was the mobilization of illegal migrants, gays and minorities as a shield against criticism or counter-protest. If conservatives and moderates fought back with superior debate or our own protest groups, we were immediately accused of racism, xenophobia and homophobia. Merely presenting an opposing view to the progressive machine was considered an act of evil.
Large contingents within all of these groups were happy to go along with the agenda for numerous reasons.
First and foremost, DEI allowed them to easily game the system. They could snatch up grants, subsidies, welfare, and leapfrog over more talented and more intelligent competitors in education and business simply because of their “marginalized status”.
Secondly, the system under progressives was two-tier; leftists activists, illegals and minorities were given preferential protection while breaking the law and causing chaos. Conservatives were labeled terrorists for any act of defiance. We were banned from the largest web platforms. Some of us were targeted by the online mob and lost our jobs. Others were “de-banked” and threatened with ostracism from the economy. Still others were imprisoned.
This imbalance of the law bred a culture of entitlement, especially within the LGBT cult and the black community. Illegal aliens were given carte blanche to enter the country and feed like parasites. Not only that, but they were treated like heroes coming to save the US from “population decline” and “labor shortages”.
They all participated in the game willfully and joyfully. They were ALL part of the problem. But, of course, none of them ever thought the party would end or that they might end up facing consequences for their behavior. They joined in the feeding frenzy without considering the inevitable clap-back.
The primary argument that leftists would often use to defend the application of cancel culture was that there was “no such thing as cancel culture”, only the righteous utilization of “consequence culture”. This was, of course, a misdirection. The word “consequence” suggests that a person deserves punishment for wrongdoing and that the leftists canceling him (or her) have the right to do so.
Cancel culture was never about justice or karma, it was about suppression of anyone who disagreed with the political left. A corrupt group of psychopathic people with no support from the majority is in no position to dole out consequences. They can dole out harassment and intimidation, but not justice.
In recent months, however, I think these people are finally beginning to understand what “consequence culture” really is and clearly they don’t like it.
We told them over, and over, and over again that the left wouldn’t like it when the “new rules” they were creating got applied to them. And here we are.
Annals of human depravity: “FBI, DOJ arrest ringleaders of dark web child porn exploitation networks with over 120,000 users.”
The Justice Department has announced the results of Operation Grayskull, a sweeping joint investigation with the FBI that dismantled four dark web sites dedicated to child sexual abuse material (CSAM). The operation has so far resulted in 18 convictions across multiple federal districts and significant sentences for offenders involved in the distribution and advertisement of CSAM.
One of the most notable sentences came last week, when Thomas Peter Katsampes, 52, of Eagan, Minnesota, was sentenced to 250 months in prison, lifetime supervised release, and ordered to pay $23,000 in restitution. Katsampes pleaded guilty in February to conspiracy to advertise and distribute child pornography. According to court records, he joined one of the dark web sites in 2022, actively advertised and distributed CSAM, including material depicting prepubescent children, and eventually became a site moderator responsible for enforcing posting rules and advising others on sharing illegal content.
The Houston branch of the U.S. Immigration and Customs Enforcement (ICE) arrested 214 illegal aliens who have either been charged with or convicted of child sex offenses over the past six months — more than it arrested in all of Fiscal Year 2024.
Among the five illegal aliens captured and highlighted in an ICE press release published on Monday, four were from Mexico and were deported back there following their arrests. Forty-eight-year-old Jorge Zebra received convictions for two counts of sexual assault of a minor as well as “sexual indecency” with a minor. He was returned to Mexico in March.
Mexicans Sergio Rolando Galvan Guerrero and Jesus Gutierrez Mireles were convicted for “aggravated sexual assault of a child” as well as for Driving While Intoxicated.
Jose Guadalupe Meza, who’s been deported four other times, was convicted of both sexual assault of a child and theft. Meza was deported to Mexico on June 25.
The lone criminal from El Salvador was Manuel Antonio Castro-Juarez, who was convicted for both sexual assault of a child as well as illegal entry, twice. He’ll be sent back to El Salvador for the third time, but is in ICE custody until necessary proceedings are completed.
“Former Texas National Guardsman Convicted of Smuggling Aliens. Mario Sandoval now faces up to 10 years in federal prison.”
A Houston-based former member of the Texas National Guard who once served on the front lines of Operation Lone Star is now facing up to 10 years in prison after a federal jury convicted him of human smuggling.
Mario Sandoval, a 27-year-old Houston resident and former national guardsman, was deployed to the U.S.-Mexico border as part of Operation Lone Star, the Texas-led initiative launched in 2021 to curb illegal immigration. The operation mobilized both the Texas National Guard and Department of Public Safety.
Despite being released from his official orders, Sandoval remained in the Rio Grande Valley and, in July of last year, began smuggling illegal aliens north of the immigration checkpoint. Jurors were shown text messages confirming Sandoval’s coordination in the smuggling operation—including his role arranging drivers and alerting others to law enforcement locations. Surveillance footage also placed him near the checkpoint during the times those messages were sent.
Sandoval was discharged from the Texas National Guard in October 2024. Although he claimed the texts were taken out of context and that no conspiracy existed, a jury found him guilty after a one-day trial and less than an hour of deliberation.
“We live increasingly in a lawless Britain… most people think that Britain has become lawless”, Farage remarked Monday at a press conference to launch a new law and order policy platform.
“We’re actually facing, in many parts of our country, nothing short of societal collapse,” Farage warned, adding “People are scared to go out to the shops, scared to let their kids out. That is a society that is degraded, and it’s happening very, very rapidly.”
Farage further suggested that Britain should leave the European Court of Human Rights in order to restore effective criminal deterrence.
Farage maintains that the ECHR undermines the country’s ability to deport foreign criminals, terrorists, and illegal migrants, thereby weakening criminal deterrence.
He contends that exiting the system would remove legal barriers imposed by foreign judges, and allow the UK to swiftly remove dangerous individuals, free up prison space, reduce taxpayer burdens, and send a strong message that crime by non-citizens will result in certain expulsion.
This, in his view, would restore effective deterrence by ensuring consequences are enforced without interference, discouraging both criminal activity and illegal immigration.
Among a range of policies he outlined to avoid a descent into societal collapse, Farage suggested outsourcing hardened criminals to foreign jails and a hard-line three-strikes and you’re out rule, meaning after three convictions there would be no more rehabilitation for offenders.
He noted that one of the most egregious aspects of the collapse is that the government is obsessed with drilling it into the British people that everything is getting better when citizens can see the rampant degradation all around them.
“Huge numbers of law-abiding, taxpaying Britons have also lost respect for the police but in a different way. The idea, the concept that we’re living in a system of two-tier policing and two-tier justice under two-tier Keir has really taken hold,” Farage urged.
Farage noted that crimes such as shoplifting and drug taking have been allowed to become a part of everyday life in cities, and that one in three Londoners have now been victims of mobile phone theft.
He vowed that his party will work to halve crime in five years if elected to parliament by becoming “the toughest party on law and order and on crime that this country has ever seen”, and instituting “zero tolerance policing.”
Farage also floated the idea of Army run centres for repeat petty criminals to be held in and made to undergo a program of reform.
He pointed to Rudy Giuliani’s tenure as Mayor of New York City as an example of how to restore law and order in a broken down society.
The Tories could have been the party of border control and tough on crime policies, but their feckless wet leadership pissed the opportunity away.
Ukrainian troops also landed on the Tendrovo Spit, a long sandbar south of Kherson. I’m including this one because it includes a closer look at some of Russia’s drone jamming equipment.
Here’s some great outside-the-box thinking: A wounded Ukrainian soldier behind enemy lines was rescued by a drone lowering an E-bike to him.
It would take a heart of stone not to laugh: “‘Crisis’ at Media Matters, As It Cuts Staff, Struggles to Pay Legal Bills.” Golly, a whole lot of lefty outlets seem to be in trouble now that Trump47 is eliminating the graft at places like USAID… (Hat tip: Stephen Green at Instapundit.)
What too much winning looks like: “The Corporation for Public Broadcasting will shut down by September’s end, the private non-profit that is funded almost entirely by Congress announced on Friday.”
Soros-funded prosecutor = brothel boom in Fairfax County. “How did the state’s largest municipality, a wealthy and highly educated suburb of Washington, D.C., become a sanctuary county for pimps, madams, and whorehouse operators? All signs point to the Commonwealth’s attorney, self-styled progressive prosecutor Steve Descano.””County Supervisor Pat Herrity said that about 80 to 100 ‘illicit massage businesses’ are ‘operating in plain sight today’ in the county.”
The latest event that’s now too dangerous to attend: Jazz festivals, as a crowd of black people beat two white people unconscious. Then Cincinnati Police Chief Teresa Theetge tried to downplay the attack saying that the assault was taken “out of context.”
Candace Taylor, 35, of Slidell, was arrested Monday after investigators found she underreported her income to qualify for the program. The Louisiana Bureau of Investigation launched its probe after a complaint from the state health department.
The Fox News report says court records say Taylor ran six businesses that brought in over $9.5 million between 2020 and 2024. Bank records show deposits of $480,994, including more than $325,000 linked to her businesses.
“From 2021 through 2024, Ms. Taylor continued to transfer tens of thousands of dollars between her personal and business accounts, with personal inflows consistently exceeding the eligibility thresholds for Medicaid,” the affidavit states.
Despite this, Taylor allegedly kept renewing her benefits—most recently claiming $4,000 in monthly income without disclosing she owned the business.
Authorities say her spending included $45,086 in Audi vehicle payments, a $100,000 wire to an exotic car dealer, and $13,000 for a 2022 Lamborghini Urus. She also allegedly withdrew multiple six-figure cashier’s checks for property, cosmetic surgery, jewelry, and luxury services.
Unless it was very hot or very crashed, there’s no way she paid $13,000 for a Lamborghini Urus, as those things go for over $200,000. Maybe that was a down payment…
Progress on civil rights: “California Law Requiring Background Checks for Ammo Declared Unconstitutional.”
But the Democrat Party’s desire to disarm law-abiding American citizens never rests. Connecticut Senator Chris Murphy filed a bill to raise the National Firearms Act tax to $4,709. (Hat tip: Stephen Green at Instapundit.)
Entertainment economics: Stephen Colbert isn’t worth $20 million a year. but South Park is worth over $1 billion.
“Texas Democrat Candidate Flips Out During Hearing, Winds Up Getting Arrested.” “Isaiah Martin’s attempt to filibuster the redistricting hearing ended in cuffs as he was dragged away from the microphone by a capitol security official.” Martin is currently running in a special election for the 18th Congressional District following the death of Shelia Jackson Lee, and is currently polling at 3%.
Of the many self-inflicted dooms besetting the Democratic Party, the blue state exodus gets talked about far less than Trump Derangement Syndrome or the radical wokeness destroying the party (along with everything else it touches). But for a party that once crowed about “demographic destiny” making them the “permanent majority party,” the shifting demographics of people fleeing blue states due to lousy governance, and the resulting shift in electoral votes, is going make Democrats winning the presidency much more difficult in 2032.
“There is a year that should absolutely terrify Democrats. It’s not 2024 or 2026 or even 2028. It’s 2032.”
“The population movement right now is a flashing red warning sign for Democrats. The reason is the 2030 reapportionment. Every ten years, the US conducts the census. One big thing done with that data is the recalculation of how many seats each state gets in the House of Representatives, and how many votes it gets in the Electoral College. And those numbers move in tandem. You gain two House seats. You gain two electoral votes. If you lose a House seat, you lose an electoral vote.”
“Democratic states are losing population and Republican states are gaining.”
“Here’s one way to think about it. In 2020, Joe Biden won* a 306 to 232 victory in the Electoral College. Then, after 2020, the census was finished and representation was reallocated for the 2022 midterms and 2024 presidential election. Under the new map, winning those same states would have shrunk Biden’s victory margin by six electoral votes to 303 to 235.”
“The next census will happen in 2030, and the map will again change for the 2032 presidential election. And right now, the outlook for that map is a disaster for Democrats.”
“Blue states like California and New York shedding House seats and electoral votes, and red states like Texas and Florida gaining four new electoral votes and House seats each.”
“In 2024, Donald Trump won a 312 to 226 victory in the Electoral College. Under this projection, the exact same state and vote breakdown would swell that margin by 20 electoral votes to 322 to 216.”
“Right now the wind is absolutely blowing away from Democratic controlled states and towards Republican controlled ones. And it’s worth asking why.”
“The red areas of the country are becoming a bigger and bigger share of the pie, and it gets to a flashing red problem for Democrats, both for their political survival and brand identity.”
“For the most part, it is expensive as hell to live in a blue area governed by Democrats. The data is clear eight of the ten states with the highest rent prices are solid blue states, and eight of the ten states with the highest cost of living index are also solid blue states.”
“Having a high GDP or on-paper prosperity doesn’t mean much when most people can’t afford their lives.”
“So why are blue cities and states in such an affordability crisis right now? Well, to start, obviously we’re all thinking it 1, 2, 3: taxes. It’s just the fact that Democratic controlled states tend to impose higher tax rates. Sometimes that means taxes that some GOP states don’t even have, like the income tax.”
“Culture is another part. By now it’s clear that Covid in 2020 presented a particular challenge for blue states and cities. Many of which, took a much softer approach to urban disorder and unrest and are still trying to reverse the damage.”
“On a lot of stuff, Democrats also just tend to be more lax or more compassionate, depending on your point of view.”
“The upside might be that a homeless person is treated with more dignity, or you won’t get thrown in jail just for having a bag of marijuana. But the downside might be that now a public park is inaccessible to families wanting to use it, or people are doing hard drugs on the street without the law intervening, which isn’t actually compassionate to anyone.”
“But more than taxes or culture or anything else. The overwhelming majority of this issue stems from one big fact: housing. It has just become really expensive for people to buy or rent a place to live in many blue states. By any conceivable metric, the US overall is in an affordable housing crisis right now. The average renting American now spends over 30% of their income on rent. The ratio of income to housing prices is at a record high right now, and at its highest in blue states.”
“And we have clear data showing us that this has now become a direct drag on Democrats. An NBC analysis of the 2024 presidential race found that Trump made his biggest gains in the counties that have the worst housing markets. Remember those top ten most expensive states and how eight of them were blue states? Five of those eight were also in the ten states that swung the most towards Trump in 2024.”
“And even when people don’t move out of a blue city or state, the people that stay are increasingly reacting to the high cost of living. By losing faith in the Democratic Party. Again, especially middle and working class people. It’s not a coincidence that Trump’s biggest gains in 2024 were in diverse, working class congressional districts in California and the New York City area, places where the Democratic Party has full control and has failed to address the cost of living.”
“But we also know that there is a way to address this in cities, mainly because many blue cities in red states have done it. Take Austin, which is the seat of a county that voted for Kamala Harris by almost 40 points. It’s seen explosive growth over the past 15 years, partly because the city and state have been very successful in making housing more affordable. That’s not because every landlord there suddenly became a socialist or because they banned Blackrock, but because they fundamentally just built more housing, making more space and lowering the prices.” The City of Austin government proper had very little to do with that, though I’m sure it’s several orders of magnitude easier to build apartment buildings here than in San Francisco, and you see them going up all the time. But Austin is surrounding by bedroom communities in far more growth-friendly counties, and Texas beats the hell out of California for pro-growth policies.
“That’s the kind of thing that makes families move there, companies open there, students stay there. And remember, each one of those people is a tiny little piece of building another electoral vote every ten years. By contrast, cities like New York and LA and San Francisco and Boston are in an absolutely different spot. It is simply incredibly expensive to live there.”
“The Democratic Party sees its political power decrease when fewer people live in the states that it controls, but it is the policies of its own politicians which are preventing more people from living in them.”
The only “growth” that blue state politicians seem to embrace is that of their own bank accounts and the ranks of illegal aliens—the same illegal aliens that drive up the cost of housing for ordinary, non-subsidized citizens. The bluer the city or state, the more likely they are to pursue actively anti-growth policies on the assumption that more people equal more destruction of the environment. And how can Democrats create safe cities when the Soros-backed Democrats they elect are determined to keep violent felons on the street as long as they hail from designated victim groups?
How can Democrats pursue pro-growth policies when so many core ideological constituents are anti-growth?
Critics of Trump’s hefty tariffs on China frequently treat them as radical measures far outside the norms of global trade. However, Trump is not the only one slapping anti-dumping tariffs on China. The EU has also imposed heavy duties on some types of Chinese exports.
The European Commission said on Monday it had imposed duties of up to 66.7 percent on imports of Chinese machines that lift construction workers after concluding that the producers were benefiting from unfair subsidies and selling at artificially low prices.
These include boom lifts (AKA cherry pickers) and scissor lifts.
The extra duties on Chinese mobile access equipment (MAE) will range from 20.6 percent to 66.7 percent, the Commission said, as it sought to protect domestic producers in the EU market worth more than 1 billion euros [per] year.
The tariffs are the latest in a series of EU anti-dumping and anti-subsidy duties focused on Chinese imports, including a high-profile investigation into Chinese-built electric vehicles, which culminated last October.
The EU executive, which conducted the investigation, said Chinese MAE producers had benefited from preferential financing, grants, state provision of inputs at below-market rates.
The Commission said Chinese producers had gained a 41 percent market share in the year from October 2022, from 29 percent in 2020, and sold at prices some 20 percent below EU competitors.
The tariffs will apply to Chinese companies such as Hunan Sinoboom Intelligent Equipment, Zoomlion Intelligent Access Machinery and Zhejiang Dingli Machinery. EU MAE producers include French companies Haulotte and Manitou.
The European Union now has in place anti-dumping or anti-subsidy duties on almost 80 Chinese products from truck tyres to ironing boards.
Trump’s shock and awe approach has already drawn numerous nations to the negotiating table to lower or eliminate tariffs. There’s no guarantee that Trump’s tariffs will necessarily bring China to negotiate, though Trump is in a much stronger position than Xi Jingping, and there are already signs that China might cave. But clearly Trump isn’t the only one calling China on their unfair trade practices, and there seems to be fairly broad consensus in the west that the time of allowing China to unfairly dump products without consequences is at an end.
China’s foreign trade hit a record high in total value in 2024 as the world’s second-largest economy further consolidated its top position globally in goods trade.
The nation’s total goods imports and exports in yuan reached 43.85 trillion yuan (about 6.1 trillion U.S. dollars) last year, up 5 percent year on year, according to data released Monday by the General Administration of Customs (GAC).
Exports grew 7.1 percent year on year to 25.45 trillion yuan last year, while imports expanded 2.3 percent from one year earlier to 18.39 trillion yuan, the data showed.
I have my doubts.
We looked at the situation just under a year ago, and there hasn’t been any shortage of “China is doomed” videos (many from China Observer) depicting the effects of of deep recessions in many of China’s export sectors since then. Video after video shows closed factories, shuttered storefronts, and people complaining about a lack of jobs.
This one, from a year ago, talks about a drastic decline in Chinese exports:
Here’s a video on how Microsoft is just the latest western company to pull out of China entirely:
Or this video from early December, showing how supply chain companies in Guangzhou are failing from lack of business and vast rows of shops are now closed:
Nor have things improved this year. This video, from two months ago, of a businessman complaining that no one is buying industrial machinery because exports are way down:
Or this video of Shanghai from five days ago, talking about a 90% decline in foreign investment in China and how lots of shops in Shanghai are closing down.
Or another video from five days ago, of Yiwu International Trade City already reeling from Trump’s sanctions:
Somebody, somewhere is lying about the strength of China’s economy and the health of their export sector. Remember, there were already plenty signs of a slowing economy in China before Trump took office. Is China Observer overselling economic difficulties in China? Probably some. Gloom and doom is their stock in trade. You never get any “Everything in China is honky dory!” videos from them (with good reason). But I don’t think they’re making things up from whole cloth.
Everyone know China’s communist rulers manipulate economic figures to their advantage. There’s a lot of anecdotal evidence that they’re falsifying their export statistics to make things look better than they are. I rather strongly suspect that their hand in the trade war poker game they’re having with Trump is much weaker than they let on.
On Monday, Nvidia announced that it has started producing its Blackwell AI GPUs at TSMC’s plant in Phoenix, Arizona, while companies within the state package and test them.
TSMC, or Taiwan Semiconductor Manufacturing Co., is the world’s biggest chipmaker and announced a $100 billion investment in US chipmaking last month. It began producing chips using the 4nm process at its Arizona factory in January and has plans to make chips with the more efficient 2nm technology by the end of the decade.
Nvidia doesn’t say which Blackwell chips it has started producing at TSMC’s plant and whether it includes the latest Blackwell Ultra GB300 chip it revealed earlier this year. Blackwell chips use TSMC’s custom 4NP process, according to Nvidia’s website.
The world’s leading manufacturer of graphics processing units (GPU) and advanced chips has announced it will build new plants in Texas, amid global economic shake-ups.
Note: Plants, not fabs.
NVIDIA has announced partnerships with Foxconn and Wistron to build “supercomputer manufacturing plants” in both Dallas and Houston. These global companies are “expanding their global footprint” and their international presence for the purposes of “hardening supply chain resilience” in their partnership with NVIDIA.
“Manufacturing NVIDIA AI chips and supercomputers for American AI factories is expected to create hundreds of thousands of jobs and drive trillions of dollars in economic security over the coming decades,” the announcement states.
The mass production of chips at these plants is expected to begin in the next 12 to 15 months. The $500 billion investment in AI infrastructure within the U.S. does not make mention of direct government subsidies or public financial incentives related to NVIDIA’s recent announcement.
I’m quoting that summary because it demonstrates that it’s easy to misunderstand things about the industry if you aren’t familiar with it. The way it’s worded make you think the “plants” are the Texas facilities they’re going to be building in 12-15 months, but the actual Nvidia press release makes clear than TSMC is doing the fabbing:
NVIDIA is working with its manufacturing partners to design and build factories that, for the first time, will produce NVIDIA AI supercomputers entirely in the U.S.
Together with leading manufacturing partners, the company has commissioned more than a million square feet of manufacturing space to build and test NVIDIA Blackwell chips in Arizona and AI supercomputers in Texas.
Note the more precise wording.
NVIDIA Blackwell chips have started production at TSMC’s chip plants in Phoenix, Arizona. NVIDIA is building supercomputer manufacturing plants in Texas, with Foxconn in Houston and with Wistron in Dallas. Mass production at both plants is expected to ramp up in the next 12-15 months.
The AI chip and supercomputer supply chain is complex and demands the most advanced manufacturing, packaging, assembly and test technologies. NVIDIA is partnering with Amkor and SPIL for packaging and testing operations in Arizona.
Within the next four years, NVIDIA plans to produce up to half a trillion dollars of AI infrastructure in the United States through partnerships with TSMC, Foxconn, Wistron, Amkor and SPIL. These world-leading companies are deepening their partnership with NVIDIA, growing their businesses while expanding their global footprint and hardening supply chain resilience.
Now, if that half trillion does get spent (no guarantee, since press releases aren’t legally binding; try to contain your shock), that would certainly buy a lot of cutting edge fabs. Nvidia is one of the few companies that has the financial resources to build their own cutting edge fabs (Apple is another), but I get the impression that they’re going to partner with TSMC. In fact, I wouldn’t be surprised if they follow the Apple model, where they tell a company “Here’s X amount of money, go build a fab. You’ll give us the first 24 months of production at x-cost per chip, and after that the fab is yours free and clear.” This is one of the tools Apple used to become the dominate tech buyer, and what some call a monopsony.
As far as building their own supercomputers, that’s great for Texas and not so great for Hewett Packard Enterprise, which finished their acquisition of Cray in 2021.
The Trump administration has effectively barred Nvidia (NVDA) from selling its custom artificial intelligence processors to customers in China. The move will force the AI chip leader to write off up to $5.5 billion in inventory and purchase commitments in its fiscal first quarter. Nvidia stock fell Wednesday.
Late Tuesday, Nvidia disclosed in a regulatory filing that the U.S. government is now requiring it to get an export license to sell its H20 processor in China and other restricted countries. Nvidia said it was informed of the move on April 9, the same day NPR erroneously reported that the White House would not seek further restrictions on the chips Nvidia can sell in China.
Your tax dollars at work.
Nvidia said the U.S. government told it on Monday that the license requirement will be in effect for the indefinite future.
Wall Street analysts say Nvidia’s write-off indicates that the company believes it won’t be granted licenses to sell H20 processors in China.
The H20 was designed for the Chinese market to comply with Biden-era restrictions on selling advanced processors there. The H20 is less capable than the Blackwell series chips Nvidia sells in the U.S. and other markets.
“With Nvidia writing off associated H20 inventory, it appears the company is taking the position that it will not be granted licenses to ship product to Chinese customers (with no other geography likely to take the governed silicon given the availability of more powerful standard Hopper or Blackwell SKUs),” Wedbush analyst Matt Bryson said in a client note Wednesday. SKU stands for “stock keeping unit,” a unique identifier for products used in inventory management.
China represents a little over 10% of Nvidia’s revenue.
The Trump Administrations believes (probably correctly) that AI is a key strategic industry and that we don’t need to give China any help there.
A half trillion dollars is a lot of cheddar, even for the (as of today) company with the third largest market cap in the world…
The Trump administration released new guidance late Friday night on its tariff on China, exempting electronic devices such as smartphones and laptops.
The guidance, posted by U.S. Customs and Border Protection, which oversees collecting taxes on imports, could relieve some anxiety among consumers and tech giants like Apple and Microsoft, which manufacture many of their products in China, The Wall Street Journal reported. Around 20 electronic products — which also include memory cards and machines used to make flatscreens and tablets — will now be exempted from Trump’s massive “reciprocal” tariff on China. The exemption comes after the president increased the tariff on China in recent days in response to China’s retaliatory tariff on U.S. goods.
Stephen Miller, the White House deputy chief of staff for policy and Homeland Security adviser, wrote on X, “These products are subject to the tariff under the original IEEPA [International Emergency Economic Powers Act] on China of 20 percent.” The IEEPA tariff was the first one Trump imposed on China after taking office in January. The tariff was levied on China, along with Canada and Mexico, in an attempt to “hold” the countries “to their promises of halting illegal immigration and stopping poisonous fentanyl and other drugs from flowing into our country.”
The Trump administration has suggested that the tariff on China will encourage companies, including Big Tech companies, to manufacture their products on U.S. soil, arguing that the move would be better for the economy and national security.
“President Trump has made it clear America cannot rely on China to manufacture critical technologies such as semiconductors, chips, smartphones, and laptops,” Press Secretary Karoline Leavitt said on Saturday, according to the Wall Street Journal. She added, “Companies are hustling to onshore their manufacturing in the United States as soon as possible.”
Next came word that the pause in semiconductor tariffs will only be a month or two.
Commerce Secretary Howard Lutnick said Sunday that the administration’s decision Friday night to exempt a range of electronic devices from tariffs implemented earlier this month was only a temporary reprieve, with the secretary announcing that those items would be subject to “semiconductor tariffs” that will likely come in “a month or two.”
“All those products are going to come under semiconductors, and they’re going to have a special focus type of tariff to make sure that those products get reshored. We need to have semiconductors, we need to have chips, and we need to have flat panels* — we need to have these things made in America. We can’t be reliant on Southeast Asia for all of the things that operate for us,” Lutnick told “This Week” co-anchor Jonathan Karl.
He continued, “So what [President Donald Trump’s] doing is he’s saying they’re exempt from the reciprocal tariffs, but they’re included in the semiconductor tariffs, which are coming in probably a month or two. So these are coming soon.”
With all respect to President Trump and Secretary Lutnick, you can’t set up a new fab to manufacture semiconductors in America in two months. In fact, you’d be really hard-pressed to do it in two years. It usually takes a fab about three years to get up and running. Bosch took three years to get their 65nm fab in Dresden up and running, and Samsung broke ground on their Taylor fab in 2022 and it hasn’t entered production yet.
Setting up a semiconductor fabrication plant is much more difficult and time-consuming than setting up just about any other factory.
As I’ve mentioned before, you can’t just take an existing building and turn it into a fab, it has to be specially built from the ground up with exacting standards for cleanroom air filtering, concrete slab level uniformity, etc. You need extremely exacting air purity handling equipment, as well as a system for running de-ionized water throughout the plant. Then you need to purchase, install, bring up and qualify all the hundreds of pieces of semiconductor equipment necessary to run a modern fab. And 2-3 years is probably the lead time to get an ASML EUV stepper, if you’re going to be building a cutting edge fab. (If the goal is to reshore the semiconductor industry, then you probably need to build a lot of less-demanding fabs as well.)
I’m in favor of the Trump Administration using tariffs to bring other countries to the negotiating table to eliminate their tariffs on American goods, and for kicking China out of the global free trade order for repeatedly breaking the rules and just being general asshats. But a two-month difference in tariff implementation dates isn’t going to change the timeline for opening new semiconductor fabrication plants in America.
*Flat panel display manufacturing uses some of the same semiconductor processes to make displays. The technology is less demanding overall, but the substrate sizes are considerably larger. Because the feature size is less demanding, I imagine bring-up and qualification is somewhat quicker, but I’ve never worked on a flat panel display machine, so I have no idea how the lead time varies to obtain and install that equipment.
As mentioned in yesterday’s LinkSwarm, Trump has offered temporary tariff relief for everyone…except China. China got hit with even higher tariffs. Evidently the only “trade war” that is happening right now is with China…and China is losing.
Behind the global economic chaos provoked by president Trump’s tariff tsunami, there are growing indications of a strategic purpose. It is now conceivable that plunging into, and then retreating from, a generalised trade war was actually a deliberate means to a truly geostrategic end: to thwart China’s ambition to replace the US as the dominant world superpower.
While Trump’s public statements still chiefly concern the need to impose economic measures to correct decades of unfair foreign trade, senior US officials, including Pete Hegseth, defence secretary, and Scott Bessent, treasury secretary, are increasingly taking a more strategic geopolitical line.
In late January, Hegseth told the US armed forces that America would “work with allies and partners to deter aggression in the Indo-Pacific by communist China”. In Panama, he said that Beijing was investing in the region for military and economic advantages. “War with China is certainly not inevitable … But together we must [deter] China’s threats in this hemisphere.”
Bessent has linked recent US tariff tactics with a shared geostrategic pushback against China, stating that “we can probably reach a deal with our allies, and then we can approach China as a group”.
In this light, the suspension of tariff combat for 90 days with most countries, while doubling down on the levies imposed on China, leaves Beijing isolated and in the firing line.
So far, after reciprocal gestures and vowing to “fight to the end”, Beijing has focused mainly on rallying anti-US sentiment across the globe. But India and Australia declined to join forces with China. ASEAN remains caught between opposing powers. The EU, in a quandary over Russia and Ukraine, likewise continues to hedge.
China has long sought to frame the West as a feeble, fragmented anachronism. Is it conceivable that, by unleashing economic fire and fury on friends and then provisionally reining it in, Trump might succeed, where Western multilateral diplomacy failed, in forcibly forging a credible consensus of opposition to the threat of global Chinese hegemony?
One assumes that Washington understands that it cannot prevail over China alone and a substantive US pivot to the Asia Pacific to press home a contest with China is starting to emerge. Trump has already reached out to Japan and South Korea, and US officials have tackled Vietnam. The Philippines, in striking distance of any hostilities over Taiwan, support the US and talk about preparing for war.
Taiwan, South Korea, India, Japan, Vietnam, Philippines: It’s like a greatest hits of nations that have bad blood with China. It’s no wonder they’ve chosen to trade with the world’s biggest economy rather than a historical enemy with designs of territorial expansion.
The developing world now faces a binary choice, and ruthlessly exploited debt and resource dependencies are not a firm basis for loyalty. This remains the case despite decades of nugatory US investment and engagement.
Under Trump’s tariffs, it is too soon to know how far China will be able to maintain the global supply lines on which its aspirations to become the world leader of innovative consumer production depend. Nor will it be easy to develop export markets big enough to compensate for declining sales to the West and its allies. Beijing’s military influence has begun to expand, but remains localised.
Most importantly, the question of Taiwan is now implicit in US language about deterring Chinese aggression. How does Trump’s assault on China’s geostrategic ambitions affect the threat of an imminent blockade, or even a full-scale invasion? The widespread view that an invasion isn’t inevitable now gives little real assurance.
Indeed, with the US taking an active stance, the status quo based on “ambiguity” is gone. Preparations to besiege Taiwan, let alone to invade, would be spotted in time for pre-emptive action.
104% tariffs on China are not enough, I’m advocating 400%. I do business in China, they don’t play by the rules. They’ve been in the WTO for decades. They have never abided by any of the rules they agreed to when they came in for decades. They cheat, they steal, they steal IP, I can’t litigate in their courts. They take product, technology, they steal it, they manufacture it and sell it back here …
I want Xi on an airplane to Washington to level the playing field. This is not about tariffs anymore. Nobody has taken on China yet … As someone who actually does business there, I’ve had enough. I speak for millions of Americans who have IP that have been stolen by the Chinese … the government cheats and steals and FINALLY an administration … that puts up and says “enough!” …
Xi can only stay the supreme leader if people are employed … It’s time to squeeze Chinese heads into the wall NOW!
Or check out this video from Chris Chappell of China Uncensored.
“The CCP wants to defend global trade. But they’re the ones who destroyed it in the first place.”
“The Chinese Communist Party is freaking out about US tariffs. They’ve launched a full-on propaganda blitz, calling the tariffs abuse. And blackmail. And if anyone is an expert on abuse and blackmail, it’s the CCP. The CCP is also claiming to be the defender of global trade. Yes, China is going to safeguard multilateralism and the multilateral trading system. And they totally are! I’m not being sarcastic here. They really are.”
“The CCP is going to fight for the current global trading system. It’s not because they love international cooperation, which is just propaganda BS. It’s because the CCP has spent decades manipulating global trade to their advantage. So there’s no way they’re going to let all that lying and cheating go to waste. Plus, global trade is basically the only thing keeping China’s economy afloat.”
“China is an export economy. That means their economy relies on manufacturing stuff for the rest of the world to buy. Chinese manufacturing exploded after China joined the World Trade Organization in 2001. Because China was able to make stuff more cheaply than other countries, consumers around the world benefited from lower prices on Chinese imports. But countries also lost tons of manufacturing jobs to China. The US alone lost more than two million jobs between 1999 and 2011 as a result of Chinese imports.”
“Besides manufacturing, the other big driver of China’s recent economic growth was real estate investment. Which became a problem after China’s real estate market started to collapse in 2020. So, the CCP decided to double down on manufacturing. They pumped billions of dollars into building more factories and exporting more goods to keep China’s economy from crashing. Which did work, but now China is making way more stuff than the rest of the world can buy. That’s called overcapacity.”
“China is making way more batteries, solar panels, and electric vehicles than the rest of the world wants. And because China has so much overcapacity, it also doesn’t import much from other countries. Which means China now has a trade surplus of almost a trillion dollars. That’s more than any country’s trade surplus in the past century, even adjusted for inflation. And China doesn’t show signs of stopping. Its export volume is growing three times as fast as global trade. That’s insane.”
“So what happens when China exports more and more stuff? They have to cut prices to be able to sell it all. Which means other countries lose even more jobs to China. Entire industries shut down. There are now certain products you can only buy from China. And when those are critical things like medical supplies, that gives China massive political and economic leverage on other countries. Remember when China stopped exporting medical goods during the early days of Covid? Yeah, that, but on an even bigger scale.”
“So that’s why the Chinese Communist Party is fighting to maintain the global trading system. They dominate it. And without it, China’s economy would fail. And their political control would crumble.”
“But how did China get here? It’s not just about cheap labor. The CCP has built an entire economic system to dominate global trade. Back when China joined the World Trade Organization in 2001, they promised to follow rules to ensure fair trade practices. To be fair to the CCP, something I never thought I’d say, they did make a bunch of economic reforms in order to get into the WTO. But after they joined, they violated the WTO rules repeatedly. They’ve been cheating the system for decades. And largely getting away with it. You see, the WTO rules are set up to prevent government intervention that would artificially distort global trade. But in a communist system, it’s government intervention all the way down.”
He brings up the example of honey producers getting subsidies at every step of production.
“This industrial policy is incredibly effective for the CCP. It’s how the CCP jump-started its entire electric vehicle industry. And they’re now flooding the rest of the world with cheap EVs.”
“Yes, these are all things that other countries do, too. But no one does them on the same scale as the CCP. In 2019, the CCP spent almost $250 billion dollars on its industrial policy. That’s massive.”
“But it’s not just industrial policy. There are also ways China’s entire financial system distorts global trade. Like everything in China, the financial system is political. All banks in China are either state-owned or state-linked, so the CCP controls how they give out loans. Which means state-owned banks give lots of loans to state-owned enterprises, and to other companies the CCP wants to support. And if those companies can’t pay them back? The banks just keep extending the loans. Because it’s better to take the financial risk than to risk getting on the CCP’s bad side.”
“The CCP’s industrial policy and financial system is destroying the global trading system. More countries have stopped relying on the World Trade Organization to stop the CCP’s unfair trade practices. Instead, they’re putting their own tariffs on Chinese goods. Like Europe’s tariffs on China’s EVs. Or President Trump’s tariffs on China’s…everything.”
Then there’s China’s use of transshipping to other countries to get around tariffs and sanctions. “The US has had anti-dumping tariffs on Chinese honey since 2001. So Chinese exporters have tried to get around it with what’s called ‘honey laundering.'”
“So that’s how the CCP’s industrial policy, their financial system, and their export system are all designed to manipulate global trade. They’ve kept China’s economy going, while hurting other countries. Both advanced economies and developing economies are dealing with the fallout. But it’s gotten so bad, that the rest of the world has no choice but to fight back. Not just the US, but also Europe. And as a result, we may be watching the collapse of global free trade. And it’s the CCP’s fault.”
Also, Trump has the upper hand in the fight because China’s factories had already been closing left and right before he took office, due to rising labor costs and dwindling foreign customers. Here’s a China Observer video from 11 months ago speculating that 90% of Chinese factories might have to close.
And that was before Trump’s tariffs.
Trump is going to win his trade showdown with Xi because American has a much stronger economy than China, one that supports vastly higher domestic consumption, and because he holds all the cards.
Are Trump’s tariffs working? Falling stock prices and gloom and doom MSM posts may suggest otherwise, but there’s a growing body of anecdotal evidence that suggests the tariff announcement already has a host of foreign nations eager to make a deal to eliminate tariffs.
So right now, let’s say: Maybe
First up, a whole lot of countries seem eager to strike trade deals with the Trump Administration. “More than 50 countries have reached out to the White House to negotiate on tariffs, Kevin Hassett, the White House’s national economic council director, said on Fox News on Monday.”
The European Union has offered the United States an agreement on the reciprocal lifting of all tariffs on industrial goods, European Commission President Ursula von der Leyen announced on Monday, days before 20% tariffs on EU exports enter into force.
“Europe is always ready for a good deal, so we keep it on the table,” von der Leyen told reporters in Brussels.
The EU remains ready to negotiate a solution despite US President Donald Trump’s tariff decisions, she said, after an exchange with representatives from the steel and metals industries.
The US imposed tariffs of up to 25% on imports of steel, aluminium and related derivative products from the EU and other trading partners in March.
Note that agricultural products weren’t mentioned. I’m guessing that will be a sticking point for the Trump Administration.
Then there’s Vietnam, which says it’s ready to eliminate all tariffs.
Confirming that Trump’s “dealmaking” was about to shine, on Friday Trump posted on his Truth Social account, announced that he had a “very productive” call with the head of the Vietnamese communist party, adding that if Vietnam wants to cut their tariffs to “ZERO”, all they have to do is “make an agreement with the U.S.”…
Fast forward just one day, and we have an example of the first official capitulation by a trading counterparty as Bloomberg reports that Vietnam has offered to remove all tariffs on US imports after Donald Trump announced a 46% levy on the Southeast Asian nation, according to an April 5 letter from Vietnam’s communist party.
The offer was made by party chief To Lam to the US president in a letter that was seen by Bloomberg. In the letter, Lam requested that the US not apply any additional tariffs or fees on Vietnamese goods and asked to postpone the implementation of the tariff announced by Trump last week by at least 45 days after April 9.
The letter confirms comments made by Trump on Friday on his Truth Social network, following a call between the two leaders. Vietnam, which has increasingly become a key manufacturing and export alternative to China, was slapped with one of the highest tariff rates worldwide last Wednesday.
Expect all the companies profiled as the biggest casualties from the Vietnam tariffs to soar, as the market realizes that for all the posturing, Trump’s tariffs were just that: a negotiating chip to minimize trade barriers against the US, which as Vietnam so aptly demonstrated, are now well on their way out.
Also coming to the table: Taiwan.
In addition to the news about Vietnam bending the knee, The Epoch Times’ Jacob Burg reports that Taiwan’s President Lai Ching-te on April 6 said his nation would offer zero tariffs and no retaliation as the start of negotiations with the United States while vowing to remove trade barriers.
Lai said Taiwanese companies will also increase their investments in the United States. The comments were made in response to sweeping import tariffs announced by President Donald Trump on April 2. Taiwan has a trade surplus with America and will see a 32 percent tariff on its imports into the United States.
The new tariffs do not, however, affect semiconductors, one of Taiwan’s largest exports.
It’s less than a week since Trump’s announcement, and a whole lot of countries seem extremely eager to make a deal and remove tariffs on American goods. Trump has long been hailed as a master negotiator, and one of his main tactics to to directly threaten one of the most precious things the other side has in order to bring them to the table to make a deal.
As far as retaliatory tariffs from other countries, there’s a lot of muttering, but evidently only China has threatened an immediate 34% tariff, and Trump is threatening another 50% tariff on China on top of the previous ones as a retaliation to the retaliation. Honestly, I don’t think Trump much cares whether China signs up to eliminate tariffs. China was already cheating so many ways on trade, and is obviously America’s greatest strategic rival, that Trump probably wouldn’t mind completely decoupling red China from the American trade system.
A feature, not a bug.
There are enough facets to that last point that it may be worth a separate post…
