Trump, Xi & Trade War’s Ear-ly Wiggle Room

While the stock market pros, WSJ & lib MSM keep beating up on the impact Trump’s tariff tax MAY have, the reality is that China is seeing its “manufacturing activity plummet amid Trump’s tariff war.”

True, the Trump tariff policy has caused US stocks to go up & down wildly, yet the net effect on inflation seems to be zero, at least, according to the latest government stats. Meanwhile, The Guardian recently reported that China’s index of factory activity already “dropped to its lowest reading since December 2023” thanks, Beijing says, to “sharp changes in the global economy as it fights a widening trade war with the US.” The impact of the US tariffs … and China’s counter tariffs … “began to show in official data [last week] with the purchasing managers’ index – a key measure of industrial output – falling to 49.0 in April.” And, the paper noted, “Anything below the 50-point mark signifies a contraction.”

True, too, the US GDP numbers took a big hit last month, yet the economic experts are still debating whether a recession is in the cards since other data (e.g., consumer spending, job growth & unemployment claims) continues to show signs of an otherwise resilient economy. How bad is bad for China? Goldman Sachs “has estimated that 16M jobs in China could be at risk if the high tariffs persist, mainly in the export, wholesale & retail industries.” On top of that, the Trump screws keep getting tighter. For instance, a new US measure will soon close a loophole that had “allowed low-value goods to be shipped” for free into the US. And, btw, “more than 90% of packages arriving in the US come under [this] “de minimis scheme.” Who’s going to blink first, Trump or Xi? Watch for both leaders to compromise by wiggling their ears in the end.

Davd Soul