Subject: Re: I must need to drink more Kool-aid
As an aside, the press over here views this as the Bad Orange Man is waging a tariff war against the rest of the world without ever addressing any of the other underlying issues - Europe's subsidies, China's intellectual theft, name it.

They're reporting on the tariffs because the tariffs are extraordinary and new. Trump has chosen to address longstanding U.S. complaints about other countries not through "normal" mechanisms, but by completely upending the entire global trade system.

So they'll loudly distance themselves from Trump but keep some of what he's put out there in place.

How can I say this? Because they've already done it.

This is a completely different order of magnitude. As I mentioned in my post, I don't think Trump's supporters truly appreciate the scope of what he's doing here - how completely beyond the pale these tariff levels are. An overall tariff rate of 10% on every product is unheard of for any developed country in the modern era. Again, the highest in the world before Trump was about 4.85%. Even if Trump decided to withdraw every new "reciprocal" tariff on his chart and just keep the others, we'd have an overall rate close to 15%.

Sadly, the public face of the democrat party, its supporters, and the media want Trump to fail and fail hard. The harder the better. They'd rather he cave completely, accomplish nothing, and see a stronger China out of all this just to have the short-term sugar high. The Chinese know it. The Europeans know it. So does everyone else. Playing to the democrats' penchant for leading the country over the cliff in the name of 'popularity' has been a weakness the rest of the world has exploited for a long, long time.

You can't blame this on the media or the Democrats. Trump came out with an ill-considered, thoughtless, and genuinely dumb tariff plan. Even if the media were singing his praises, the same thing would happen: the stores would start going bare in May, prices would rise throughout the summer, and Trump would be getting hammered in the polls as we headed into X-mas. How do we know that? Because that's what happened to Biden with supply chain problems and inflation. No matter how many pundits were on Team Transitory, Americans felt the impacts to the real economy - and registered how much they hated it.

Trump's the one who decided to put America's hand onto the hot stove. His Administration completely misjudged China's reaction, thinking they would move quickly to the table instead of them moving deliberately and almost welcoming the chance to have this type of confrontation with America on the world stage. They completely underestimated how slowly most of the countries of the world would move in responding to these tariffs, and completely underestimated how painful they would be immediately to U.S. firms and employers and the bond market.

For one you assume that they're not getting 'a nice price' today. They're getting...the price today.
For two, the Europeans aren't going to suddenly expand their consumption of Chinese mops and toys and gym equipment just because the US isn't buying as much of it. Why would they? They've already established an economic equilibrium with respect to what they already import from China.

Tariffs change prices. Embargos change prices. Now that goods can't be sent to the U.S., China's got a lot of excess manufacturing capacity relative to existing demand ex-U.S. That means prices will fall. The economic equilibrium between the EU and China (and indeed every country in the world and China) is going to change.

That's been the entire problem with the Administration's approach to all this - they didn't take into account that global trade is more than just the bilateral status between the U.S. and other countries. The EU was already China's largest export market and their largest trading partner. If all those goods start to go on sale and priced to move, they'll buy more. Not enough to make up for the US market, but they will buy more.

Is Europe going to all of a sudden buy more Chinese cars? (They buy zero today). How about Chinese jets? (Also zero). Chinese semiconductors? (Also zero).

What on earth are you talking about? China exported about 1 million cars to Europe in 2024 - in fact, China is literally the biggest import country for cars going to Europe. The EU gets about 1/3 of all of their semiconductors from China - they're one of China's biggest export markets.

The reason is that the administration for all its faults has a point about worldwide protectionism and favoritism of their own products while simultaneously demanding free access to the American market.

Again, this is the system we wanted. We built it. We wanted all the countries around the world to adopt our preferred frameworks for finance and capital markets, intellectual property and patent recognition, capital flows and investment protections, the U.S. dollar as the international reserve currency, all of the global frameworks on postage and shipping and aviation, and our preferences for free trade. All while maintaining our own (admittedly smaller) but still not trivial subsidy programs in our Farm Bills and ethanol supports and sugar quotas and airline/car industry bailouts and all the stuff we do for our own politically powerful but inefficient domestic industries. This is the system that helped make the U.S. the richest country in the world.

They're understandably aghast that suddenly we want to upend the card table of the game that we were winning more than any other country, playing the victim card and complaining bitterly about how totally unfair it is that countries have agreed to take part in a system that enriches us and allows abundance for our citizens unmatched in any society on earth or in history. All because Donald Trump doesn't understand what trade surpluses and deficits actually mean.