China strikes back with 84% tariffs

https://www.reuters.com/world/trump-tariffs-live-markets-selloff-us-reciprocal-tariffs-kick-2025-04-09/

by xnhbx • 1 year ago

49 41 1 year ago

noduerme• 1 year ago

Hard to see how this benefits anyone. Or who's going to be hurt more by it. America's tariff move under Trump is a symptom of mass psychosis. But I think China's response is a huge gamble that the psychosis can be broken with careful application of pain - before that pain hurts China even more.

Personally, I buy almost no consumer products, and it's true that most people in the US who backed Trump are debtors and consumers who are going to see prices go through the roof. But there is no guarantee they will blame their leader. The cognitive dissonance implies they will blame anyone else. There is some hope that they'll revolt against Trump if things get bad enough, the way there's some hope for democracy in China, I suppose. But at the same time, I don't know that China's aggressive response is going to politically move things in that direction, because it's so easy for the nationalists to rally around the flag - regardless of the economic pain they're experiencing. China itself knows this and leverages it with its own nationalists. And this response is going to cost China dearly. It may be counterproductive. Then again, I think it's a bold move, and if I were in China's position I think I would have to try the same and wait to see how long it takes for America to cry uncle.

thomassmith65• 1 year ago

In concrete terms, America crying 'Uncle' equates to Trump losing so much popularity that he becomes a nonentity. Trump wields power only to the extent the Republican establishment respects and fears him.

sidibe• 1 year ago

The tariffs are already showing dents in Trumps personality cult. More Republicans are standing up to him over this in the Senate, house will follow as it becomes harder to deny he's not a great businessman or negotiator.

Retaliating is the correct move from other countries, groveling to this kind of leader will just lead to getting bullied more in the future. And unlike with Russia you can almost count on him losing power if you push back.

vdupras3• 1 year ago

/5d chess mode on

What if Trump wants and expect some kind of coup attempt ("losing power"), a kind of Reichstag fire, in order to consolidate it?

Trump's action appear self-destructive when you consider them in the context of normalcy, but if you consider that he intends to catapult the US outside normalcy, these actions might make sense.

lapcat2• 1 year ago

I think China's response is a huge gamble that the psychosis can be broken with careful application of pain - before that pain hurts China even more.

Politically, as a dictatorship, China can withstand pain longer than the US, which is not (yet) a dictatorship, and even if Trump himself can't be moved, Congressional Republicans are nervous about the 2026 midterm elections.

most people in the US who backed Trump are debtors and consumers who are going to see prices go through the roof. But there is no guarantee they will blame their leader.

The people who love Trump are never going to be moved, but Trump's victory in 2024 required nonpartisan swing voters who were frustrated with the economy under Biden as well as hard-core supporters. If the economy actually gets worse rather than better under Trump, then the swing voters can easily swing the other way in 2026 and 2028.

tvc015• 1 year ago

Swing voters are always underestimated. But can the left run moderate candidates that appeal to the Bill Ackman types? I wish they could but I suspect they can’t and won’t. Their recent track record is how we’re here.

watwut2• 1 year ago

Not doing what China does is a massive gamble too - Trump and America will bully for more and will lie while doing it.

Yes, conservatives will blame everyone but the perpetrators inckuding themselves. But, it does not matter, because if they will get what they want, they will come back for more and cause more harm.

Nice work blaming the victims and trying to push them into passive acceptance of what is done by perpetrators. In reality, when you bully, others have choice between letting it or retaliating. And letting it happen has huge risks. Everyone else is opening themselves to more bullying ... but that is better for Trump, so you do not care about those risks.

busyant2• 1 year ago

Nice work blaming the victims and trying to push them into passive acceptance of what is done by perpetrators

I don't think the person you were responding to was necessarily blaming the victims.

S/he's just pointing out that China imposing tariffs are self-inflicted pain just like the US imposing tariffs--tariffs cause some amount of self-harm.

Even The Economist said the most 'rational' response from Europe was not to impose counter-tariffs, but simply continue on as best they could without them and let the majority of the pain fall on the US.

But The Economist (and the person you responded to) also acknowledge that there are other factors at play beyond economics (e.g., national pride).

National pride is part of what got Trump elected and it's something that China has to incorporate into its decision making.

Imustaskforhelp• 1 year ago

Oh I see a lot of Trump supporters actually call things bidenflation and that this is a pain to fix it.

Off topic but the whole world is kind of looking for a scapegoat / just let's things be and give blame to anybody but just remove tariffs. Some guy named bloomberg twitted a rumour and that was the craziest market action I have ever seen.

It's sound absolutely bonkers, it truly shows the amount of influence just reach has.

And reach is given by algorithms and big corps.

If your money can go up and down legit based on rumours in stocks, i genuinely don't feel much optimistic though the times are dire.

It's really funny, like I can imagine far good things happen more likely even when people would retaliate. Think universal basic income or god forbid, giving american healthcare.

Like doge etc. are literally doing things which cost them money and reputation when they could've just sat and do nothing.

I think this is part of some 1984 plan where we all pretend we are in war with each other for authoritarinism and polarity.

It sends me shivers that the things I am saying are making sense, they should be fiction, but sometimes reality is more harder to believe than fiction.

The times are bleak. We all really need to put aside our capitalistic needs. there is a 60 percent chance of us recession according to many betting markets/ goldman sachs.

If anybody is reaching/wants help. My hands are open to help anybody, it's seriously a time of crisis, times of crisis don't start with saying attention this is one of the worst times. Though i am just a 16 year old boy in india. I just want people to really forget capitalistic needs to help the needy for this one time. I don't want it like the 2008 crisis that the bankers who caused it would just get a slap at the wrist and the people suffering would have no one to look after them.

I urge the world to create peace. Nobody wins in wars

acdha5• 1 year ago

Trump is only in power because millions of Biden voters stayed home. His tariff power is not constitutionally specified but delegated by the legislature, who can withdraw it at any time. I think that China, and other world leaders, believe there’s a good chance that a handful of Republicans – who were already having to hide from their constituents – will be willing to join Democrats in repealing or restricting that delegates tariff authority by the end of the month or so. This would certainly be plausible given how their party used to pride itself on free trade and is heavily funded by the Wall Street guys who are eating huge losses right now, not to mention the non-trivial percentage of their voters are watching their retirement portfolios and home equity shrink.

ThrowawayR2• 1 year ago

"Trump is only in power because millions of Biden voters stayed home."

From a detailed post-election analysis posted on HN a few weeks ago (https://news.ycombinator.com/item?id=43400172): "The reality is if all registered voters had turned out, then Donald Trump would’ve won the popular vote by 5 points [instead of 1.7 points]. So, I think that a 'we need to turn up the temperature and mobilize everyone' strategy would’ve made things worse." Anyone who still thinks that there's some latent segment of the voting public that's on the Democrats' side needs a wake up call.

AnimalMuppet3• 1 year ago

America's tariff move under Trump is a symptom of mass psychosis.

Mass? It's a symptom of one man. (Yeah, a bunch of others voted for him. You can label that "mass psychosis" if you want. The tariff whiplash is not driven by those people, though.)

re-thc2• 1 year ago

But I think China's response is a huge gamble

It isn't. Trump got the math wrong. China and the rest of the world has a trade deficit with the US not the other around (if we count properly).

Does Trump not understand that US' position is the fragile 1? A lot of people can't live without necessities e.g. from China. Most people can live without US goods e.g. Netflix.

China has proposed banning US films. China licenses huge amounts of American drama too. Watch Hollywood crash.

Sports like NBA and Major League (baseball / soccer) are all exports with advertising, TV rights, etc. These were big in China.

The US education industry relies on foreign students as a major part of their funding. A lot of them are Asian.

China has a real monopoly on things like fireworks. There is no alternative.

Let's crash billions in the gaming industry too. Electronic Arts, Epic Games, Microsoft, etc.

The list goes on.

vdupras3• 1 year ago

Isn't this essentially "we're closing borders"?

Since the gloves are officially off, I'm wondering about something. Doesn't China hold a whole lot of US treasury bonds? What happens to those famous 10 years yields if China sells all its US bonds (why would it want to keep them if the relationship is dead)?

actionfromafar• 1 year ago

Not an economist but doesn’t it also depend on what you think the rest of the world would think about the dollar in the future?

lawn• 1 year ago

Isn't this essentially "we're closing borders"?

Even if Chinese goods becomes twice as expensive, many are still cheaper than what you can buy in the US (if they're even made there).

Some businesses just don't have a choice, or they'll go bankrupt.

vdupras3• 1 year ago

Yes, but we see that the "raising" logic is in place. Whoever stops raising the tariff "loses face". So they'll raise them until... infinity?

Trasmatta4• 1 year ago

How do we expect Trump to respond to this? 200% tariffs? He's already shown that the only thing he knows how to do is fire off even more tariffs. He expected the world to just capitulate to him.

maxglute2• 1 year ago

IIRC last year Trump threatened to tariff PRC at 150% if they invaded Taiwan. I guess at 200%, PRC would invade to get a 50% off.

TrackerFF• 1 year ago

The thing is, Trump needs some exit ramp for this. He's incapable of admitting fault, and will keep going until something catastrophic happens - only to throw other under the bus.

China knows how to play him, he's an open book. Predictable as the clock.

But he can't end this himself, someone else has to pull that lever and take the blame - unfortunate as it is.

Trasmatta4• 1 year ago

The off ramp is some "deal" that Trump can take credit for, even if it's bullshit. China doesn't seem to want to play that game this time, though.

acdha5• 1 year ago

Xi cannot afford to look weak, but also doesn’t need to worry about the next election and has a couple hundred other countries to trade with. I think they’re making the fairly rational decision that appeasement will lead to future attempts and are betting that Wall Street has enough influence with Republicans in Congress that they’ll stop delegating tariff powers to the executive branch. You only need a handful of them to break ranks to make this end, so it’s not a bad bet.

tjpnz• 1 year ago

Off ramp is he tries to double it, is declared mentally incompetent by his handlers and is replaced by JD.

stevage• 1 year ago

He's incapable of admitting fault,

But he's not incapable of reversing course, while claiming he was right before, and also right now. He can totally do a "deal" that achieves nothing, while claiming to be the smartest negotiator. Just look at the deals with North Korea last time around.

ytpete2• 1 year ago

See also his replacement of NAFTA last term with something very similar but a different name.

maxglute2• 1 year ago

Interesting times intensifies ^2

mppm• 1 year ago

Meanwhile, Apple stock is up 3.5% at the time of writing. What gives? Has Wall Street already priced in the "104% is so unreal, there has to be some kind of deal or exemption in the works"?

acdha5• 1 year ago

The damage is bad but also entirely voluntary, and there are a lot of people who really want to believe that there is some kind of complex strategy where this is a negotiating ploy which won’t be around long enough to really change things.

Trasmatta4• 1 year ago

There's no 5D chess strategy, Trump literally just loves tariffs and thinks they actually work. He's been talking about tariffs since the 80's. Last year he even said that "tariff is the most beautiful word in the English language".

rvnx• 1 year ago

It's -20%, and this is without counting the fact that the USD itself is weakening.

So all the savings that were somehow stored in USD are getting eaten, as you can buy less with them.

nabla9• 1 year ago

Trump caved as expected day after EU passed a countertariffs resolution. Exactly what I predicted 2 days ago. https://news.ycombinator.com/item?id=43613377

China strikes back with 84% tariffs

Related Stories