Six months into tariffs, businesses have no idea how to price anything

China has very high growth momentum that surpasses American living standards soon, and not long before it will surpass American security standards too. China's purchasing power is probably more comfortable than most western countries, with extensive housing and high speed rail and electric cars etc. When a country becomes rich, inevitably other countries ask for their help. That's why China's growth must be curbed, fast > tariff them to their death or so. But I really don't think it will work at all. And personally I don't even think it's a good idea at all to begin with.

Instead we should just have tariffs instead of actually making the lives of Americans better while FIGHTING affordable housing, high speed rail, and EVs.

We've got an entire team of goons who would rather rack up penalty minutes than score goals. These freaks think we are competing with China in an MMA fight instead of a Hockey game.

Before everyone jumps in with GDP per capital with PPP, what quality at that low price means is tofu dreg buildings, cancerous food items, waist high flooding every summer in cities, ghost buildings, and unsafe water (recently one of the most prosperous city, Hangzhou, had sewage seeped into the water for weeks, which the local government denied responsibility).

It’s the zero-sum mindset of leadership that only ever learned to excel by cheating and stealing, not cooperating, building, or synergizing.

China’s ‘25 GDP per capita on a purchasing-power parity basis is $29k to America’s $90k [1]. American real GDP per capita grew at 1.7% a year from 2015 to 2025 [2]. (American PPP GDP/c grew 4.5% a year from 2014 to 2024 [3].)

From 2004 to 2024, Chinese PPP GDP/c grew 7.4% a year [4]. If China and America keep growing at their respective rates, we wouldn’t expect convergence for 20+ (40, using America’s PPP GDP/c) years. That’s too long for our if condition to be expected to hold.

There is not a strong argument for Chinese GDP/capita, PPP-adjusted or not, approaching America’s within a generation. There is a risk China’s economy becomes bigger than ours in aggregate.

> what quality at that low price means is tofu dreg buildings, cancerous food items, waist high flooding every summer in cities, ghost buildings, and unsafe water (recently one of the most prosperous city, Hangzhou, had sewage seeped into the water for weeks, which the local government denied responsibility)

Your comment loses credibility with this rant.

[1] https://en.m.wikipedia.org/wiki/List_of_countries_by_GDP_(PP...

[2] https://fred.stlouisfed.org/series/A939RX0Q048SBEA/

[3] https://data.worldbank.org/indicator/NY.GDP.PCAP.PP.CD?locat...

[4] https://data.worldbank.org/indicator/NY.GDP.PCAP.PP.KD?locat...

OP never literally called for killing anyone.

China does not have “very high grow momentum”, in fact growth has been seriously slowing since Covid

I’m not sure sure what “growth momentum” is what it has to do with living standards.

China’s PPP is not more comfortable than the US because it’s still 1/4th that of the US.

China has very serious growth problems, a massive debt overhang from real estate (that is still slowing the economy), a supply planning model that is leaving it with an oversupply of things like cars and batteries.

Is the rest of the world suddenly going to start buying something they haven’t in the past? Why?

And the US consumer market is 2x the size of the next biggest (EU).

How exactly is the the rest of the world going to replace the demand of something several times its size?

From 2004 to 2024, Chinese PPP GDP/c grew 7.4% a year [4].

What an incredibly dishonest comparison!

https://www.chiangraitimes.com/china/china-export-dumping/

Obviously the profit margin will be less than selling to the US, but it does mean that the 3% of GDP mentioned above is not going away entirely, just shrinking to (say) 2 or 2.5%.

The article also mentions transshipment, where Chinese goods get routed to the US via a third country. Although Trump's strategy of "tariff everybody for all the things" is putting a damper on this too.

Let's do a side by side comparison? 2018 to 2023? 2023 is the last year with solid numbers.

US: 12% real GDP growth

China: 26% real GDP growth

Sounds impressive, until you account for the base.

US: +$2.4T USD

China: +$3.64T USD

Yikes! 4x the number of people, but 0.5x the GDP growth.

https://fred.stlouisfed.org/series/PRMFGCON

Biden was inaugurated in January 2021 and Trump won the election in November 2024.

When you even mention building ourself, you are accused of being anti American simply because you point out a deficiency in our current development.

That's unlikely to be true. They might buy less, but the numbers won't fall to zero.

It also overlooks the detail that the component parts of items "made in the usa" also come from other places. Clothing made in the US, doesn't necessarily use fabric made in the US.

In the short to medium term, the increased cash-flow requirements (tarrifs are paid before sales) will favor large importers with access to abundant cash over smaller importers.

Yes, the purchasing power of US consumers will go down as retail prices of goods go up. Yes global producers will seek out alternate markets.

The current uncertainty causes US purchasing to prefer not to commit to long-term orders. Global suppliers will prefer orders from stable customers, even at somewhat lower prices. Once those long-term contracts are in place, it may be hard to reenter the global marketplace, especially on the currently favorable terms.

In other words tarifs are doing long-term reputational damage that will not be easily undone in a few years time.

On the up side the world is about to observe, for the first time in a couple generations, the effects of an isolationist policy. It is a valuable lesson that needs to be reinforced from time to time.

Tax breaks, grants, physical infrastructure, creation of entire markets - those are better tools.

The issue with tariffs is non-competetive companies aren't required to become more competitive.

I mean consider it, a tariff is a tax on those buying a specific competitors goods. Even if tariffs were done surgically, still it seams like a tax benefit is a better tool

OT: Solar is awesome! 18 panels are generating 2/3 of our load, despite it being late winter. And a 16kWh battery means the grid power we import is all off-peak. In summer we're going to be exporting enough that we may even cover our winter grid import. Plus it gives us the best UPS system we've ever had, including zero-second cut-over (c.f. Tesla's half-second glitch).

The US has made friends with a lot of countries based on the goodwill generated by strong trade ties. That goodwill is being eroded in the short term, and will linger as a reputation for "unreliability". 80 years of work is being undone in months.

And unfortunately it won't be as simple as "in 4 years we can go back to normal ". It's obvious that congress supports this, and the American people voted for it, so it's not just one man's policy.

That said however, the US economy relies quite heavily on the international USD hegemony, and China being a bigger economy does threaten that quite directly. It would be surprising for them to drop the USD, but it is a significant risk.

I am not an American citizen so I cannot feel offended by this sentence, but I think it doesn't help to call people stupid.

What you describe looks like a failure of the education system, which have been defective for decades in the US, from what I've heard. This may very well take 100 years (4 generations is even slightly optimistic) to escape this downward spiral.

Meanwhile, a possible strategy is to do like the others: get a popular politician who makes empty promises, while doing the opposite, or whatever they want actually, when in charge. They can inject massive amounts of money in the public school system even though they promised to make private schools more accessible in their programme, and distract people's from this obvious lie with a wrestling showmatch against Putin.

Certainly, if you are smarter than them, you can trick them.

It all comes down to a lot of people in other parts of the world being willing to work for far less, for far longer hours, under far worse conditions, than Americans. Anything you can make in the USA will thus be more expensive, and until you’ve re-acquired all the domain knowledge lost to other nations, these quality will also be worse. As most people don’t want to buy something worse for more, you’ll need to force them to by making it unreasonable to import foreign goods (which is already happening), but that also means you limit the market to domestic. I fail to see how that is a viable strategy, unless you aim to wage war on the rest of the world and can’t trust anyone.

What he describes is result of different value system, intentional radicalisation and propaganda. Education won't counteract it and especially not since above people are in charge of it.

Yes, I chose the strongest form of the other side’s argument to show that even then, it’s difficult to argue that Chinese PPP GDP/c is approaching American levels within a generation. (Though China’s numbers don’t vary much between 10 and 20 years, America’s do since we had a lot of war and then economic stimulus in the 2000s.)

> 2018 to 2023?

You want to make multi-decade projections off a pandemic baseline?

> 4x the number of people, but 0.5x the GDP growth

Per capita means per person. Purchasing power means real production. The question was about potential living standards, not aggregate might.

As long as they are cooperating with Russia at least European countries will have a hard time to accept China's advances.

The constitution of the People's Republic of China and the CCP constitution state that its form of government is "people's democratic dictatorship".

The current president has done much to make his appointment for life, so it is a dictatorship that is on the road towards having a dictator.

Cue comparisons to what is currently happening in the US.

A socialist state under the people's democratic dictatorship led by the working class and based on the alliance of workers and peasants.

I think you're ignoring some of the poetic intention of those words, the idea is that the Marxist collective is the dictator. It's turning the concept on its head to put the people at the forefront.

In other contexts such as casual conversation here in the West the term dictatorship means something quite different and you seem to understand that too because you say they're "on the road towards having a dictator" which is surely an admission that they currently do not have a dictator and are ergo but currently a dictatorship.

I'll certainly grant you that Xi has made moves to consolidate power in the individual but that's a separate discussion.

You’re not “tariffing them to death”, you’re hurting yourself. This would only work if the USA was the main importer of goods from China, which it is not - only about 14%.

https://www.merriam-webster.com/dictionary/literally

Part of the problem is that it runs up against the corporate lobbies who would rather take a higher short term profit margin, let American industry hollow out and buy gold + a luxury bunker in New Zealand to prep for the worst case scenario.

More than that, I think China would be mad not to step into the vacuum the US is creating with it's isolationist policies. For years US aid has been extremely influential around the world, doing a huge amount of good (e.g. USAID) and buying relatively cheap influence in many countries. Countries that were reliant on that aid are going to be understandably jaded by their experience with the US and looking for more reliable allies.

Like in Garrison Keillor’s Lake Woebegone, where all of the children are above average.

I think American are partially blinded by the crazy negative propaganda against China you see all the time in the US. They significantly underestimate where China stands and overestimate the impact American tariffs can have.

Yes they are. They are required to compete on a level playing field domestically and they still have to compete with marked up foreign goods.

https://en.wikipedia.org/wiki/Fighting_in_ice_hockey

https://en.wikipedia.org/wiki/Violence_in_ice_hockey

This means domestic cars and many other goods will get a tariff markup on a large proportion of their parts anyway. In many cases it will be cheaper or roughly equivalent to pay a single tariff on a finished product from abroad.

In theory it should be possible to bring in staged tarrifs, and use tax breaks and subsidies on on-shore necessary domestic production over time to transition the industry, but that’s not happening and there’s no sign it will happen. The administration doesn’t seem to be aware this is even an option.

https://en.wikipedia.org/wiki/Dictatorship_of_the_proletaria...

It would be possible to develop domestic supply capacity, starting with the inputs necessary to feed that development, and then nurture and encourage the process with a targeted ramp up of tariffs. That’s not happening though, instead domestic investment is collapsing.

Why they don't do it now? One could easily replace 90% of consumed good with US made.

U.S. per-capita income is roughly $80,000, while China’s is about $13,000. Adjusted for purchasing power it would take decades (at current trajectories, which may be slowing due to EU backlash etc.) to converge.

China leads in high-speed rail and EV adoption. These don’t automatically translate into higher overall living standards — healthcare, wages, pensions, and social safety nets matter more.

China’s lending practices have also led to accusations of “debt-trap diplomacy,” and some countries are now cautious about overreliance on Chinese help. This is why China negativity amongst all of their immediate neighbors is so high.

U.S. aid was about Cold War geopolitics, China’s BRI is about long-term economic influence via infrastructure debt.

Industrialization, like deindustrialization, is a continuous process. Every industry suffers from depreciation and decay which means that pace of industrialization per unit time matters.

So the world needs to absorb almost half a trillion of new supply.

The way they are trying to takeover the public school system is by "vouchers" where private schools end up getting funded by tax dollars to create a regime sanctioned and funded private school system.

China is different in all these cases, even after the significant moves by Xi to consolidate power. You could argue that I'm the days of Mao there was a dictatorship in place but things have radically changed since Deng Xiaoping took the helm.

No, it's not. The US making not enough steel is not an immutable law of the universe. It is a result of the same kind of industrial decline which tariffs would reverse by making it more economic to produce steel locally.

It only wouldn't work on products which the US has no fundamental ability to make like bananas (which yes, Trump did...).

>This means domestic cars and many other goods will get a tariff markup

Yeah, that's kind of how tariffs work - there's always a markup.

>In many cases it will be cheaper or roughly equivalent to pay a single tariff on a finished product from abroad.

That depends entirely on how you structure your tariffs. If it is the case you've structured them incredibly poorly.

>In theory it should be possible to bring in staged tarrifs, and use tax breaks and subsidies on on-shore necessary domestic production over time to transition the industry, but that’s not happening

I believe I covered that when I said that the tariffs were "being wielded with the skill and grace of a crack addled ferret".

The USA spearheaded integration of China with the international trading system. Their development was an intentional goal.

The point of Hockey is to score the most points, not win the most fights. If fact, you are penalized for fighting. The more violent team often loses the game.

The point of MMA is to win the fight by using violence.

The people who watch this metaphorical hockey game for the violence have a 4 letter acronym that they label themselves with.