Subject: Re: One Possible Tariff Endgame
The Europeans in particular have
a) Happily drawn down their militaries to almost nothing
b) Spent the money they've saved on a social safety net
c) Have bought into every green scam they can and are rapidly destroying their industrial and energy bases.

Looking to Europe for any kind of policy leadership is folly.

Even so. If you want to constrain China, we'll need allies. Even imperfect allies.

That's the folly of this "reset." If our primary goal is to contain growing Chinese hegemony, then we'll need to work with the rest of the Western economies and the developing economies of Asia. Warts and all. We can't do it if we suddenly regard virtually every other OECD nation as an adversary that needs to be thwarted for trade transgressions simultaneously with trying to contain China. Or if we start telling countries like Cambodia and Vietnam that, no, we need you to slash your domestic apparel industry so that we can go back to having low-wage low-productivity textile mill jobs again, for some reason.

Or if we just launch this aggressive trade action without preparation. Ideally you'd prefer to actually made more progress building up your domestic semiconductor industries and letting everyone know that they need to stockpile rare earths a long time before declaring a trade war against China. You know, so that we're in a better position to win that trade war. Spend some time beefing up the federal government's role in industrial policy (yes, the federal government's share of GDP is high, but that's almost entirely insurance programs and the military - everything else is basically a rounding error) so that your economy is already on a "war footing" before you start the war. Etc.

If you want to lead an action to constrain China, it's folly to simultaneously take that moment to declare virtually every other nation on earth an adversary when it comes to trade and then expect them to help you constrain China.