Xi Jinping is Done: China 'Surrenders' as Trump Tariffs Crush CCP's Master Plan

[Hightech88]

 

[k1976]

​

https://www.bbc.com/news/articles/c4g45zp77y5o​

There are signs Trump could be ready to retreat on tariffs​

4 hours ago

Faisal Islam
Economics editor•@faisalislam
Share
Save

BBC
Over the past week I have crossed a radically changing North America, from Arizona to Washington DC in the US and then on to Sasketchwan in Canada, witnessing clear evidence of the consequences of historic change in the way the world economy is run. Huge uncertainty means nobody really knows where it is headed.

The walk from the White House Rose Garden to the HQ of the International Monetary Fund (IMF) takes just 9 minutes. In the past few days, in this very short stroll, two very different worlds collided with each other.

The former is the place where at the start of this month, with an extraordinary chart and questionable equation, President Trump took on the world with his so-called "reciprocal tariffs".

The latter is the place where just three weeks on from that, after rowback, market tumult, and confusion, the finance ministers of the entire world gathered to try to pick up the pieces, even as they were still rebounding off the ground.

At the IMF meetings that included gatherings of G7 and G20 members, something unique happened. The US representatives faced not open hostility, but exasperation, bewilderment and deep concern, from almost the entire rest of the world, for having sent the global economy back towards a crisis, just as it had finally emerged from four years of pandemic, war and energy shocks.

 

[k1976]

The worst is yet to come: Trump's tariffs could mean even higher prices and empty shelves within weeks​

By Katherine Tangalakis-Lippert, Grace Eliza Goodwin, andLakshmi Varanasi

Business Insider spoke with nine supply chain researchers, shipping industry insiders, and logistics specialists about the timeline for when consumers might expect to see the most significant effects of Trump's aggressive trade policy, should he maintain his current strategy.

They agreed that, in the coming weeks, Americans can expect major disruptions to the prices and availability of goods — store shelves may be emptier, prices will rise, and some products will run out sooner than others.

And if things continue on the current trajectory, four of them said, by the end of the year, those effects could be compounded, leading to higher domestic unemployment rates, global market instability, and increased geopolitical tensions.

 

[k1976]

Angmo also has fake news de woh?

 

[k1976]

Ownself praise Ownself?

 

[k1976]

 

[Leongsam]

This proves beyond all doubt that Trump is the best... master negotiator, brilliant strategist... always a few steps ahead of his adversaries.

Xi forced to eat humble pie.

 

[k1976]

China, without doubts, is also suffering from dwindling export but the impact may be much lower as Chinese workers are heading back to rural areas to do other business or agriculture activities

 

[Leongsam]

 

[k1976]

This proves beyond all doubt that Trump is the best... master negotiator, brilliant strategist... always a few steps ahead of his adversaries.

Xi forced to eat humble pie.

We will see in 10-45days what happen when Beekok inventory dwindled…June-July is a critical period

 

[k1976]

1 week after 2nd Apr that mean 9th Apr mah

 

[Leongsam]

 

[k1976]

 

[k1976]

 

[k1976]

 

[k1976]

PROJECT SYNDICATE​

Opinion:​

Washington disregards a key American strength: the ability to generate value through ideas, technological innovation and expertise​

By


Ricardo Hausmann
Last Updated: April 27, 2025 at 9:52 p.m. ET
First Published: April 27, 2025 at 8:20 a.m. ET

There were no witches in Salem, Massachusetts, in 1692-93, yet dozens of people were executed based on a false understanding of the world. Today, a similar misconception is shaping U.S. economic policy: President Donald Trump’s “reciprocal” tariffs reflect the mistaken belief that the United States suffers from large trade deficits, and these reflect economic decline and foreign exploitation.

Fueled by bad accounting, this narrative now threatens to undermine both American prosperity and the international order that sustains it.

By traditional accounting standards, the U.S. ran a cumulative current-account deficit of $14.4 trillion between 2000 and 2024. At first glance, this suggests a country living beyond its means. Had that deficit been financed through borrowing at an average interest rate of 4%, net interest payments should have risen by $576 billion. But over that same period, net financial income declined by only $19 billion.

 

[k1976]

So, where is the missing $557 billion? A closer look reveals that the gap reflects an often-overlooked American strength: the ability to generate value through ideas, technological innovation and expertise. These intangible assets underpin a global network of subsidiaries and consistently deliver returns high enough to offset the current-account deficit.

While the U.S. ran a merchandise trade deficit of $1.2 trillion in 2024, it also recorded a $295 billion surplus in cross-border services. More importantly, U.S. subsidiaries abroad generated $2.1 trillion in sales, compared to $1.5 trillion by foreign subsidiaries operating in the U.S. The result was a net services surplus of $895 billion, almost enough to offset the goods deficit.


Foreign subsidiaries of U.S. companies also generated $632 billion in net income in 2024 alone. Assuming a conservative 4% return, that implies an asset base of $15.8 trillion — an astonishing figure for a country that, on paper, ran a cumulative current-account deficit of $14.4 trillion.

---

The value of knowledge-based assets doesn’t show up in traditional accounting.

To make sense of this apparent contradiction, consider a different narrative: the U.S. effectively borrowed not $14.4 trillion but $28 trillion. Half went toward domestic spending; the other half was used to fund foreign direct investment.

The key distinction lies in how American companies deployed these funds. By combining capital with intangible assets like ideas, intellectual property, and organizational capabilities, they generated returns of 8%, far above the 4% typically earned by passive investors, including foreign lenders.

In essence, the U.S. exports not just dollars but a form of invisible capital that serves as a reliable source of income. In 2005, my colleague Federico Sturzenegger and I used the term “dark matter” to describe the unmeasured value embedded in knowledge-based assets that traditional accounting fails to capture.

 

[k1976]

These structural dynamics have long allowed the U.S. to run persistent trade deficits without suffering the usual consequences, such as rising interest payments. Since the end of World War II — and, more explicitly, since the 1994 Uruguay Round of trade negotiations — the U.S. has led efforts to institutionalize protections for cross-border investment and intellectual property. In return, developing countries gained expanded access to America’s capital and consumer markets. Though imperfect, the global trade system has enabled the U.S. to extract lasting value from its intangible capital.

 

[k1976]

---

The international business of U.S. firms — particularly in tech, pharmaceuticals, and entertainment — could face higher taxes, stricter regulations and even expropriation.

That foundation of American power is now in jeopardy. Trump’s “liberation day” tariffs are not just a symbolic gesture; they signal a willingness to abandon the very principles that have underpinned global trade and investment for decades. If the U.S. is seen as retreating from its commitment to open markets, other countries may respond by scaling back intellectual-property protections. The earnings of major U.S. firms — particularly in tech, pharmaceuticals, and entertainment — could face higher taxes, stricter regulations and even expropriation. As a result, the income that helps offset America’s current-account deficit could dry up.

Of course, the damage from Trump’s agenda may extend far beyond trade. The strength of America’s economic model has always rested on its openness to people, capital and ideas. For decades, the U.S. has been a magnet for talent in science and technology, from the European émigrés who helped build the atomic bomb to today’s AI researchers and biotech entrepreneurs. But as the U.S. turns inward — attacking universities, undermining research and closing itself to the world — it is destroying the knowledge base that generates the “dark matter” sustaining its external balance.

The geopolitical consequences could be profound. U.S. allies such as Canada and the European Union are already hedging against the Trump administration’s unpredictability by strengthening ties to each other and with China; Latin American countries are following suit. China, for its part, is working to reduce its reliance on the American market, and universities around the world are vying for U.S.-based academics and researchers. If the U.S. is no longer viewed as a reliable guarantor of the rules-based international order, it risks drifting into strategic isolation.

 

[k1976]

History offers valuable lessons about the dangers of Trump’s approach. In the early 20th century, Germany’s Kaiser Wilhelm II dismantled the complex alliance system carefully constructed by Chancellor Otto von Bismarck. Dismissing Bismarck’s system as outdated, Wilhelm pursued an assertive unilateral policy that ultimately led to his country’s encirclement and set the stage for World War I. He failed to see that what appeared to be constraints were, in fact, the foundation of Germany’s security and influence.

Trump is making a similar mistake. Viewing the current system of trade and investment as a trap rather than a triumph, he is determined to dismantle the mechanisms that have enabled the U.S. to prosper, extend its influence and avoid great-power conflict for nearly a century.

There is nothing inevitable about the decline of American power. But misunderstanding the causes of the U.S. trade deficit — and trying to fix what isn’t broken — risks turning a statistical illusion into a very real crisis.

Ricardo Hausmann, a former minister of planning of Venezuela and former chief economist at the Inter-American Development Bank, is a professor at Harvard Kennedy School and Director of the Harvard Growth Lab