Reflections on the Tariffs

 When I read that China could potentially bring our economy and our military to its knees by cutting off our supply of rare earths, a part of me thinks that Trump is really doing us a favor by starting a trade war with China.  After all, if China can bring us to our knees in a trade war by cutting off our rare earths, that has some rather alarming implications about what they might do in an actual shooting war.  

What if China invades Taiwan, something that could happen as soon as 2027?  How will we be able to come to Taiwan's defense if mainland China can bring our military to its knees by cutting off our rare earths?  Any why haven't previous administrations -- Trump 1.0 included -- been working on developing our independence from Chinese rare earths? Decoupling ourselves from China now seems rather late in the game but, as the saying goes, better late than never.

That being said, I am not prepared to give Trump credit for any sort of strategic thinking here.  The US economy is about a quarter of the world economy.  Only China comes close to the total size of our economy -- nearly $18 trillion for China versus $27.72 trillion for the US.  Germany, the third in line, clocks in at $4.5 trillion -- less than a sixth the size of the US.  Clearly, then, we are big enough to crush any economy except China.  China is big enough to engage the US in a trade war, although both countries will be much the worse off for it.

What the orange idiot in the White House hasn't figured out is that, while we can crush any economy except China and inflict serious pain on China, we are not big enough to prevail in a trade war against the entire rest of the world at the same time. And our best chances of emerging triumphant in a trade war with China alone is to have as many allies as possible. 

Presumably Trump and company assume that we have the advantage in a trade war with the rest of the world because we are big enough to stand alone, while the rest of the world consists of many different countries that can be split.  Except the Trump has done his best to make it impossible for anyone to strike a deal with us by (1) making clear that he cannot be counted on to keep his word, and (2) not even making clear what he wants (perhaps because he doesn't know himself).  

Or, as this article comments:

Instead of spending years, or even months, investing in American industry, Trump is angling to get rid of the major investments in semiconductor and clean-energy manufacturing implemented under the Biden administration. Instead of engaging in a gradual tariff rollout, the administration jacked up tariffs to 145 percent over the course of a few weeks. Instead of providing businesses and investors with clear guidance, the administration has changed its story by the day, if not the hour. And instead of building a coalition of allies, Trump has spent the past few months threatening, feuding with, and tariffing them. Even if the U.S. were to suddenly change course and try to build an anti-China coalition, a prospect recently floated by Bessent, it is likely too late. What country would sign up for economic hardship for the sake of an “ally” that has not only treated it poorly but has also repeatedly demonstrated that it can’t be trusted to honor any bargain?