molson 🧠⚙️
I am more and more concerned about the White House’s trade negotiations, to the point where I feel I need to sound an alarm. The White House needs new members on its team for trade. In ~3-6 months we are going to start having shortages of transformers, pumps, air conditioners, and other complex goods which are made (or their critical components) in China. These products, which cannot be efficiently sourced elsewhere in this timeframe, are necessary for electricity, clean water, and a pleasant life. The vibe in our country right now is not good and we do not want to layer on top of that, along with our high gun ownership, a collapse of basic government services. The White House is doing too many things at the same time (tariffs, Ukraine, deportations, Yemen, hosting sports teams, and much more) while China is singularly focussed on this issue, which they have been studying and preparing for, for close to a decade. Short of blockading the Persian Gulf, which China certainly has a contingency plan for, the United States does not have much leverage with China. The U.S. is a net food importer and the foods that we do export to China can be purchased elsewhere (eg soybeans from Brazil) in a way that critical machinery like transformers, pumps, etc cannot. It is not possible to turn all the made in China components we need into made in Vietnam, overnight, even with the cheating that is happening to make this occur. Perhaps the U.S. will be fine because we will buy up all spare capacity outside of China, leaving the rest of the world in big trouble. By the time the shortages hit, it will be too late to fix the problem, because it takes months for new inventory to reach their international destinations. And as I explained in my pinned post, no one is starting US factories to replace China’s capacity amidst this uncertainty. For over a year, since I was able to return to China after 5 years (because of COVID lockdowns), I have been telling people that are underestimating China as a rival to US hegemony. This is increasingly evident from our trade negotiations where they have consistently refused to fold and have even taken once unthinkable steps like ending the purchase of Boeing planes and banning rare earth element exports, necessary for what manufacturing we do do here in the USA. The White House, as far as I can tell, does not have anyone on its team with China experience and the people who know most about manufacturing, are notably not involved in the trade and tariff policy. This needs to change and fast. I am not writing this because I want a handout or carve out of educational toys (though, frankly, it does not make sense to make educational products more expensive for schools and families). We will be fine because we have been manufacturing out of China for a long time. I am saying this because, as an American, I have a really bad feeling about this.
molson 🧠⚙️
The 7 major ways China has changed between 2019 and 2024