245% Tariffs

This is now getting ridiculous. The US has increased its tariff on imports from China to 245%. But electronics such as smart phones and laptop computers are exempt, so what effect will these tariffs have on China? Not much, is my estimation.

Looking into this, I find that clothing, along with toys and sporting goods make up over a quarter of all US imports from China. Going into the summer therefore, the US will be missing out on cheap baseball bats and balls. And the price of clothing at Walmart will skyrocket as even alternative suppliers such as Vietnam and Bangladesh have had high tariffs placed on them (although now paused for 90 days).

On the other side of the equation, China has stopped supplying rare earth minerals, which it has a market share globally of 95%. Plus, China has stopped buying logs, beef and soybeans from the US. It can obtain all these from other suppliers; soybeans from Brazil, beef from Argentina, logs from New Zealand and so on. 

Also, I see that China has stopped dealing with Boeing, including buying spare parts. Little known is that Airbus has an assembly facility in China, so they'll be gaining there, and China has its own airplanes, an industry it put effort into since Trump 1.0. They could see where things were headed and planned ahead.

Factor in also, China is building fast rail links, it does not rely on air travel as much as other countries do, it is similar to Japan in that respect.

China's president, Xi Jinping is visiting ASEAN countries right now, shoring up relationships. The ASEAN region is China's biggest trading partner. Something I think the US has got badly wrong, it singled out this region for punitive tariffs, effectively driving China and the ASEAN countries together.

In short, I don't see China backing down as it can do without the US. Anything it finds it really does need, it can afford to do without until a substitute is found. Reportedly, the US has asked Europe to decide, them or China. I'm assuming Europe will buckle and choose the US. But any country watching this would be wise to observe and do nothing. What we are witnessing is a huge act of self-harm and Europe may be about to jump onto a sinking ship.