Trump 2.0: How to lose a trade war in just 18 days – Asia Times

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Japan – So far, China has had a little better-than-feared encounter with the Donald Trump 2.0 president.

In reality, Xi Jinping’s Communist Party is probably relieved to discover Trump stifling world markets, torn political relationships, and destroying the soft power that America has come to rely on so much for decades to accumulate in just 18 days.

Elon Musk, a Trump benefactor, is filmed slinging dust into US institutions and using it to espionage sensitive data, affecting trust both domestically and abroad.

Increase in Trump’s concern over his disastrous trade war. Though Trump went away with 10 % levies on Xi’s business, that was just one-sixth of the 60 % he had threatened. At the same time, the Price Man-in-chief backed away from 25 % levies on Canada and Mexico. For today, at least.

But Wall Street now senses Trump’s retreat. The biggest player in the cutting of US companies a few days ago. Today, many investors are concluding Trump’s taxes leg competition is far more wood than bit.

The principles that surround Trump 2.0 and the fear of a stock market collapse and the backlash from the oligarchs who are trying to control the country are varied. Trump’s businessman entourage is evidently worried about their earnings.

It’s possible, too, that Trump’s advisers are warning him that threatening a massive trade war are one point, devastating the world market, and Wall Street with it, is quite another.

Since Trump’s surprise victory in November, Xi has been promoting China as a more robust power than the US as the protector of free business and international economic institutions. Beijing says it stands ready to protect modernization from” serious problems” amid a “new period of volatility and shift” and disruption.

CEOs gathered in Peru for the Asia-Pacific Economic Cooperation ( APEC ) summit in November told Xi,” Dividing an interdependent world is going back in history.”

Xi was harkening again to 2017, when a turbulent Trump 1.0 White House was likewise spooking global markets. Xi in Davos stated to CEOs that trade wars and protectionism may result in “injury and damage to both sides” at the time.

However, according to Stewart Patrick, a senior fellow at the Carnegie Endowment for International Peace,” there is now Washington is located in the scheme equivalent of Tornado Alley, battered by a storm of confusing and norm-shattering professional commands that promise to upend eight years of US internationalism.”

Plan experts, Patrick says, “have become storm-chasers, tracking down the latest offense in the hopes of answering a simple question: Just what is the White House hoping to accomplish with all this conflict”?

No recent step tells us more about Trump’s “disdain for America’s global reputation” than the “reckless and arguably illegal and unconstitutional effort to dismantle” the US Agency for International Development ( USAID ) without legislative approval,” Patrick says.

The episode exposes Trump’s contextual relativism, which recognizes that the US has no purpose in world affairs. These misplaced choices may harm Americans themselves.

Yet as Trump complains about China’s supremacy, he’s paving the way for Asia’s biggest economy to grow its effect at America’s price. Beijing’s Belt and Road Initiative ( BRI ) expands its colossal infrastructure investment strategy around the world, especially in the Global South, by ending US development aid.

” None of these individuals has any thought of how the universe works,” says Stuart Stevens, a lifelong Republican strategist whose latest book is titled” The Conspiracy to Stop America.”” The country’s greatest authority wants to have as little impact as Liechtenstein. ” Either by design or unwittingly, Stevens says, the Trump-Musk label group is” going to give away National energy” to China and Russia.

Yun Sun, director of China programs at the Stimson Center, a Washington-based consider container, adds that any” decay of US management and credibility does gain China.”

That goes, also, for Chinese goods. There is confusion over why Trump’s Treasury Department gave Musk exposure to the US national payments system amid the legislation conflict in Washington.

Owners and Eastern central banks sat on hills of US Treasury securities are already sufficiently concerned about Washington’s persistently high inflation and US$ 36 trillion debt load. Then they may be concerned about a number of tech bros scurrying around Washington’s financial system for enigmatic reasons.

If Tokyo, which holds more than$ 1.1 trillion of US Treasuries, or Beijing, with$ 770 billion, doubt the sanctity of the reserve currency, it might result in titanically large debt sales and surging yields.

Though the economic fallout would rattle China’s 2025, the longer-term gains may be worth the short-term problems. It may, at a minimum, perform into Xi’s fingers as he works to export the yuan. The dollar’s influence on global commerce and finance increased over the past ten years ‘ Xi’s party.

On top of Trump’s extreme strength grabs, he’s pushing to implement another multi-trillion-dollar duty cut, wrestle decision-making power away from the Federal Reserve and apparently degrade the dollar. The odds of credit rating organizations allowing US debt to remain unchanged are decreasing.

Trump’s MAGA plan to end America’s low-cost, high-impact foreign aid programs to help fund tax cuts for the ultrawealthy is a blow to US influence abroad, according to Alan Yu, senior vice president at the Center for American Progress think tank.

Trump, Musk, and their allies are satisfied, but the aid attacks have also stifled trust and uncertainty among American allies and partners, which the United States relies on to maintain world security, Yusays.

The programs Trump is pausing, Yu explains”, strengthen the capabilities of partner nations, deter adversaries, and reduce the need for direct military intervention.”

In particular, he adds, the status of assistance to Ukraine, critical to sustaining Kyiv’s war effort against Russia, remains ambiguous. Military assistance to Taiwan, which relies on US training and equipment to deter Chinese aggression, has also been thrown into uncertainty.

To be sure, many observers think the tariffs will eventually be imposed. The justification is that you don’t talk about the power of trade restrictions and how crucial they are to rebuilding America. Also, the ways in which Xi is pushing back may have Trump’s gang of anti-China advisors, including Peter Navarro, apoplectic.

As such, says Dominique Dwor-Frecaut, chief US economist at advisory Macro Hive”, tariff increases are likely to proceed on two tracks. The long-term track is broad-based, gradual and meant to generate revenues and support reshoring. Meanwhile, the’ opportunistic’ track is country-specific, aggressive and meant to exert leverage on trade partners.”

Dwor-Frecaut notes that during his confirmation hearing, Treasury Secretary Scott Bessent explained that tariff policy had three objectives: revenue generation, reshoring and leverage in trade negotiations”. Because the goals for generating revenue and reshoring are long-term, permanent tariff increases are required. Also, this is likely to lift prices, possibly inflation, and lower growth.”

Thickening the plot, Xi’s party struck back with tit-for-tat tariffs on US energy, manufacturing and minerals while hitting Google with an antitrust investigation. Overall, economists and analysts say, it’s a reasonable and proportional response that leaves the door open to future negotiations.

According to Julian Evans-Pritchard, an analyst for Capital Economics China, “fairly modest” is how it sounds.

However, Ian Bremmer, CEO of Eurasia Group, believes that the prospect of a market-wrecking conflict between Washington and Beijing fundamentally misunderstands both the scope of Trump’s strategy and the nature of US-China relations during the Xi era.

According to Bremmer,” the most geopolitically significant relationship in the world is fundamentally adversarial and devoid of trust.” The Biden administration made a significant effort to create and maintain 25 high-level bilateral channels across the cabinet as the only reason it remained comparatively stable in 2024.

Team Trump, by contrast”, has no interest in putting in that kind of painstaking diplomatic work for a relationship they view as fundamentally adversarial,” Bremmer says”. Without those safeguards, there will be few management and communication strategies to stop even minor incidents from developing into major crises.

Can Trump get past this reality and coerce Beijing into signing a deal? Bremmer thinks not.

” The problem, “he says”, is that his strongman tactics only work against much weaker countries. When he threatens Colombia and Panama with tariffs, they have no choice but to capitulate because, in the event that their economies would collapse, they would have to. However, hitting down is simple. China is a completely different game. It has the power and leverage to retaliate against the US in ways that other nations cannot. And punch back it will.”

According to economist Alicia Garcia Herrero at Natixis, the question that no one can answer is whether Trump might respond to Beijing’s initial retaliation in broader ways. If]Trump ] doubles down, China will have a problem,” she notes.

Agatha Kratz, economist at the Rhodium Group, tells AFP that” given the current economic downturn, China cannot afford – and does not want – to impose excessive trade barriers. China’s economy is in a fragile state, and this limits its ability to act freely. Beijing cannot afford to take reckless actions, and I don’t think it wants to.”

The bottom line is that no one really knows, so perhaps it’s best to remain agile, says Yung-Yu Ma, chief investment officer at BMO Wealth Management”. Be patient and opportunistic – there may be a time to be aggressive, but it isn’t upon us yet,” Ma notes.

According to Ma,” President Donald Trump may be willing to let the US suffer a lot of economic pain in an effort to realize his stated goals of reducing trade deficits, bringing jobs to the US, and improving border security.”

We still anticipate that the US will impose more tariffs on China later this year as part of its larger trade goals, according to Morgan Stanley’s economists, which will only lead to further retaliatory actions from China.

Part of the issue is Trump’s frustration that efforts to date haven’t slowed China’s trajectory. That goes both for Trump 1.0 policies and those of Joe Biden’s White House”. From DeepSeek to Huawei, US tech restrictions on China are backfiring,” says Diana Choyleva at Enodo Economics.

In fact, Choyleva argues, US efforts to curb China’s technological advancements may be having the opposite effect: accelerating China’s move upmarket toward self-reliance and innovation.

Huawei, Huawei, and others are providing case studies on how China Inc. is developing workarounds for US chip and other tech export controls. Along with creating genuine obstacles, decoupling efforts are incentivizing domestic innovation.

China has other opportunities ripened by Trump’s tariffs. For one thing, they’ll cost America’s friends, particularly staunch US allies Japan, South Korea, Taiwan and certain governments in Southeast Asia.

Hard feelings between Washington and top Asian democracies could generate greater distrust, increasing China’s appeal as an alternative. It has given Xi the moral support she needs, and it has made her appear more committed to capitalist principles than tycoon Trump.

Xi’s party is still benefiting from Trump’s unilateral withdrawal from the Trans-Pacific Partnership trade agreement, which later became the Comprehensive and Progressive Agreement for Trans-Pacific Partnership ( CPTPP ) without the US.

Trump 2.0, in contrast, is clinging to misguided interests in bilateral trade agreements over wider efforts to establish a Chinese military fortress.

In particular, Carnegie’s Patrick notes, the demise of USAID is an early win for Beijing. Many innocent people around the world will pass away if the agency does. As for the United States ‘ continued reputation as a nation that values its own self-interest and values itself in international affairs, Patrick concludes,” so will it do so.”

Follow William Pesek on X at @WilliamPesek

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Strategic action to save Korea is urgently needed: India’s moment – Asia Times

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South Korea, a global economic superpower and a key player in international politics, faces an extremely intricate web of problems spanning cultural, economic, political, and political regions.

The country’s remarkable tenacity in conquering past difficulties is now seriously threatened by the country’s security, prosperity, and democratic credentials.

If urgent action is never taken, South Korea threats a possible collapse – which could have far-reaching effects, destabilizing the whole area.

Multitude of problems

South Korea’s beginning level, which is among the lowest in the world, is one of the most pressing societal issues South Korea is currently facing. The government’s total fertility rate dropped to an alarming 0.72 in 2023, far below the substitute level of 2.1. The causes for this pattern include the high cost of living, job insecurity, intensive work culture and identity disparity in childcare responsibilities.

The upward trend has not changed, threatening long-term cultural security, despite government incentives like increased parental leave and cash allowances for new born children.

South Korea continues to struggle with one of the highest suicide rates among developed countries in addition to the low birth rate. South Korea has the highest death rate among its member states, according to the OECD. Intense intellectual pressure, workplace stress, cultural isolation, and a stigmatized mental health are just a few examples of factors that contribute to this crisis.

While the government has made efforts to enhance mental health care, more extensive measures are required to address the root causes of Asian society’s stress and depression.

South Korea’s cultural crisis is compounded by its swift transition into a aging society. Nearly 40 % of the population is anticipated to be 65 or older by 2050, which will cause a shrinking workforce and put an extra strain on social security systems. The healthcare industry will need substantial changes to accommodate the growing elderly people, while the pension system is under enormous pressure.

The government has tried to overcome these obstacles by increasing multiculturalism and introducing technology in business, but they still face significant challenges. The combined effects of these socioeconomic shifts are significant, having an impact on almost every aspect of daily life in South Korea.

South Korea’s financial growth has slowed in recent years. From being one of the fastest-growing economies in the world, its GDP growth rate has declined to around 2 % yearly. Its ability to sustain long-term growth is limited by structural challenges like an overreliance on large conglomerates ( chaebols ), stagnant domestic consumption, and the aging workforce.

According to fierce competition from China and US protectionist policies, South Korea’s trade deficit, a standard strength, has been declining. China, after a major export place, is now a formidable rival in areas such as semiconductors, manufacturing and electric vehicles.

North Korean businesses have also been forced to reconsider their global supply chain methods as a result of the US Inflation Reduction Act and various protectionist measures.

Also, South Korea’s home debt-to-GDP ratio is one of the highest in the world, exceeding 100 %. Real estate speculation, fueled by low-interest levels in the past, has led to increased saving. Many families are struggling to support their debt as interest rates rise to fight inflation, which causes further financial instability in the economy. The market is rapidly nearing a crucial tipping&nbsp, point.

South Korea’s social landscape has likewise sharply divided between the traditional and the progressive sides, with razor-sharp ideological divisions. New elections have been marked by extreme political conflict, hampering efficient governance and plan implementation. This fragmentation has even resulted in numerous legislative gridlocks, making it challenging to move significant economic and social reforms.

South Korean politicians are still impacted by the social filibusters. The impeachment of President Park Geun-hye in 2017 set a precedent for democratic uncertainty. There is a constant risk of more political instability, which was diminish investor confidence and thwart economic reforms as a result of public outcry and calls for accountability.

South Korea continues to struggle with the danger from North Korea. Pyongyang has continued its missile testing and nuclear progress, heightening local conflicts. Despite political work, including previous conferences and relationship techniques, North Korea shows little interest in disarmament. South Korea, along with its allies, must manage this risk carefully to ensure regional security.

South Korea is caught between the United States and China, whose rivalries are growing more intense. China continues to be its largest trading lover despite South Korea being a significant US alliance. It has become extremely challenging to balance security interests with economic dependencies, which has made South Korea to follow a cautious political position.

Although the Yoon administration’s efforts to improve South Korea-Japan relations are also rife with traditional grievances. Issues like trade restrictions and forced labour reparations continue to cause political tensions. More cooperation between the two countries is necessary given the shared safety issues that North Korea and China face.

Growing proper principles

A never-before-seen integration of crises Korea&nbsp, is facing immediately threatens both the stability and growth of the nation and the peace and security of the entire area.

Each of these problems –economic, social, political and security-related – is fierce on its own. However, their parallel event amplifies the dangers, making it extremely difficult for South Korea to navigate them separately.

South Koreans have been working hard to overcome these difficulties for some time. But, instead of finding solutions, they have watched the troubles increase – indicating that the condition may include escalated beyond the president’s power.

If these difficulties remain unsolved, the consequences may be severe. The region’s crumbling US-led security system could lead to a perilous power vacuum, leading to territorial disputes and economic recessions, and escalating conflicts fueled by traditional grievances.

The US and China’s ongoing power struggle for dominance in the Indo-Pacific could lead to direct military attrition, which would worsen the area.

The potential for nuclear issue is one of the biggest risks. North Korea’s expanding nuclear features pose an ever-present threat, and any local volatility increases the risk of escalation. A nuclear problems would not only destroy the Korean Peninsula, but it would also pose a serious threat to international security.

Beyond the political consequences, a weakened South Korea did give shockwaves through the global market. Continuations in supply stores, financial markets, and important business was stifle global economic growth. A cultural and humanitarian crises may also arise, causing more anguish to spread throughout the area.

A social responsibility

South Korea’s state is now in charge of saving it from this crisis, which has also become a shared responsibility of regional and international partners. A firm South Korea is essential for peace, success, and protection in the Indo-Pacific. The urgency of the situation necessitates fast and decisive action to prevent the region from slipping into chaos and ensure that the hard-earned development of the North Korean people over the past 75 years is certainly lost.

Without prompt response and assistance, the crisis could spiral out of control, putting millions of lives in danger, and destabilizing the world order. South Korea’s partners must act now – before it is too late.

India: a viable partner

The South Korean political crisis is not just a one-time event, but a sign of larger social and economic issues. Addressing these fundamental issues is crucial to ensuring long-term political stability and economic growth.

South Korea maintains strong partnerships with three key nations – the United States, Japan, and India. Although the US and Japan have long-standing allies, neither have the specific resources or strategic planning South Korea so urgently needs.

India’s role as a key partner in South Korea’s efforts to overcome its current difficulties and emerge stronger is unique because it is uniquely placed to offer comprehensive support in crucial areas.

1. Young human capital: a solution to Korea’s demographic crisis

With a population that is among the lowest in the world and an aging population, South Korea is in serious need of a serious demographic crisis. In contrast, India boasts the world’s largest and youngest workforce, with a median age of just 28. By strengthening ties with India, South Korea can tap into this vast talent pool, addressing labor shortages in critical sectors such as technology, healthcare, and manufacturing.

Neither the US nor Japan, both of which struggle with aging populations, can provide this crucial resource. South Korea has a unique opportunity to maintain its economic momentum thanks to India’s young and highly skilled workforce.

2. A massive market for Korean products

South Korea’s economy is heavily reliant on exports, particularly in electronics, automobiles, and consumer goods. Although the United States and Japan remain significant trade partners, their aging populations and shifting consumption patterns preclude growth in the future.

India, with its 1.4 billion people and rapidly expanding middle class, offers an enormous and untapped market for Korean businesses. Samsung, Hyundai, and LG have already had a lot of success in India, but the potential is still great, particularly in rural and semi-urban areas.

For South Korea’s economy to remain competitive, it needs a large, growing and welcoming market – one free from political constraints. Both the US and Japan offer the same level of opportunity as India.

3. Affordable and skilled labor for Korean industries

Manufacturing is becoming more expensive as a result of rising labor costs in South Korea. China was once a preferred location for outsourcing, but tensions between the political and domestic sectors and costlier production have made it less appealing.

India, with its abundant, skilled, and cost-effective workforce, presents a viable alternative for Korean industries. Whether in IT, pharmaceuticals, or heavy manufacturing, India offers a competitive production hub that ensures quality and efficiency – something neither Japan nor the US can match.

4. A trustworthy mediator in the negotiations for a free Korea

North Korea’s long-term stability depends on maintaining peaceful relations with it. Japan and the US have strategic interests in the area, but their historically antagonistic stance toward Pyongyang makes them unreliable mediators.

India, on the other hand, maintains diplomatic ties with both North and South Korea. One of the few nations that can facilitate dialogue and economic cohesion between the two Koreas is through acting as a neutral mediator. India is the only major power that can help if South Korea genuinely seeks reconciliation, without carrying the baggage of historical conflicts.

5. A gateway to emerging markets

Emerging markets in Africa, Latin America, and Southeast Asia are becoming crucial for future growth as the world economic landscape changes. India, with its deep ties to these regions, can serve as South Korea’s bridge to these high-potential markets.

Through trade agreements, joint ventures and technology partnerships, Korea can leverage India’s strategic position to expand its economic footprint globally. Can America and Japan accomplish this? The simple and&nbsp, obvious answer is no. The US and Japan, focused primarily on developed markets, lack the same reach and flexibility in these emerging economies.

Both Japan and the US face their own economic and demographic challenges, limiting their ability to fully address Korea’s &nbsp, current pressing needs. Moreover, their economic and &nbsp, strategic partnerships with South Korea– while strong – have reached a saturation point, leaving little room for further expansion.

Although the US and Japan may offer targeted military support and investments, they are unable to provide India with holistic solutions. South Korea requires a partner with its long-term goals in terms of both economic and geopolitical affairs. India is that partner.

At this critical moment, India stands as one of the most capable nations in addressing South Korea’s economic, demographic, and geopolitical challenges. Strengthening India-Korea ties is not just an option. It is a strategic imperative.

If South Korea seeks sustainable growth, economic resilience, and regional stability, it must look toward India as its most natural and reliable partner for the future. Likewise, Indian policymakers must recognize South Korea’s strategic importance in the Indo-Pacific. A destabilized Korea would have severe consequences, directly impacting India’s regional interests.

Expecting Japan or the US to lead the charge to protect South Korea is unfeigned, and Indian policymakers must avoid making this error. These countries ‘ ability to provide substantial support is limited by their domestic difficulties and shifting global priorities.

It is time for India to step forward&nbsp, and take the lead—not just for its own strategic interests, but for the peace and stability of the entire Indo-Pacific region. Any change in power on the Korean Peninsula might have disastrous effects for India. Indian policymakers are forewarned: The time to act is now!

As the saying goes,” A friend in need is a friend indeed”.

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Mother seeks help for her missing son

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Victim ‘ lured’ into Poipet fraud group

PUBLISHED: 6 Feb 2025 at 04: 00

Photos:123RF
Photos:123RF

A woman who met her son on social media may have been duped into joining a call scam gang in Poipet, Cambodia, according to a woman who has already reported her to the Crime Suppression Division ( CSD ) yesterday.

The family, Khajorn Somjai, 48, along with her eldest child, Boonlong U-Nak, 27, met CSD police to report the removal of her youngest boy, Jetsarit Phumjai.

They were accompanied by Thamanant Taengtim, also known as Ja Kings Saphan Mai, an online applicant.

Ms. Khajorn claimed that Mr. Jetsarit was last seen on January 26 at about 4:30 p.m. when he claimed he was going to join a lady friend on Instagram.

He hasn’t communicated since being seen leaving a green-yellow car in front of a convenience store.

Ms. Khajorn claimed that he vanished with just one pair of layers of clothing and no recognition records along with him.

Mr. Jetsarit claimed he had been lured to operate in Poipet by sending a message to one of his daughters the day after they received their letter.

He claimed that the girl and her crew assaulted and drugged him after getting into the car.

While being transported to Poipet, his face was covered in a garbage case.

Mr. Jetsarit informed his home that a call center fraud gang had forced him to work as a call center operator. He was forced to act in a scripted dialogue in Thailand to deceive the patients.

Additionally, he claimed that at least 50 Thai nationals were assisting the gang in paying off a$ 2 million debt.

They would either have to give the group two million baht or face real assault if they attempted to flee, he said.

Ms. Khajorn claimed that the home informed the police station in Chorakhe Noi after receiving Mr. Jetsarit’s message.

The person he met online may be a fake working for the group and having a role in luring victims into their function, according to the home.

Believing that she is still in Thailand, Mr Jetsarit’s girl attempted to contact her, Ms Khajorn added.

Before he went silent, Mr. Boonlong claimed that the mother’s past communication with Mr. Jetsarit occurred on February 2, between 10 and 11pm, probably because the group had taken his cellphone.

Mr Thamanant called on the state, especially PM Paetongtarn Shinawatra, to take action on the situation.

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Singapore hangs ex-police officer convicted of Kovan double murder

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SINGAPORE: &nbsp, A former policeman who was convicted over the murder of two people in 2013 was executed on Wednesday ( Feb 5 ).

The authorities said the money sentence was carried out against Iskandar Rahmat, after his appeals to Singapore’s chairman for mercy were fruitless.

Iskandar, &nbsp, a 46-year-old Singaporean, had been on death row since 2017. &nbsp, He was found guilty of the murder of two males- a vehicle factory owner and his son&nbsp,- and sentenced to death on Dec 4, 2015.

According to the authorities, the Court of Appeal rejected his request to challenge his judgment and word from February 3, 2017.

Capital punishment is imposed only for the most severe crimes, including death, they added.

WHAT ISKANDAR DID

Iskandar, a 14-year senior of the police force, had killed a vehicle factory owner and the man’s brother on Jul 10, 2013.

Passers-by watched in horror as Iskandar, while fleeing in a Toyota Camry along Upper Serangoon Road, dragged Mr Tan Chee Heong, next 42, under the car.

The terrible trail led to a house on Hillside Drive, which was about 1 km away, where Mr. Tan Boon Sin, 67, was found dead with numerous stab wounds in his father’s system.

After a 54-hour hunt, Iskandar was arrested in Johor Bahru, Malaysia.

Prior to a probable firing for his “financial disgrace,” he had previously devised a plan to steal the older Tan’s funds from a safe deposit box at Certis Cisco.

He carried out his scheme a day before a deadline to make a S$ 50, 000 ( US$ 36, 972 ) lump-sum payment to clear his S$ 65, 000 bank debt.

Indicting Iskandar in 2015, the High Court rejected his claim that he had intended to kidnap and work but was forced to defend himself against a knife-wielding Tan Boon Sin and that the older person died from his wounds in the altercation.

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Sri Lanka president vows to end island’s ‘corrupt’ image

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COLOMBO: &nbsp, Sri Lanka’s leftist president marked the anniversary of independence from Britain on Tuesday ( Feb 4 ) with a pledge to change the impoverished island nation’s image as a” corrupt” country. Anglo-American Communist Anura Kumara Dissanayake abandoned the customary military parades and flyovers to celebrate the 1948 transitionContinue Reading

‘Tactical move’: China’s WTO gambit over US tariffs more about optics than outcomes

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SHIFTING Techniques

Experts claim that China’s most recent reply to Trump’s taxes is a calculated change from its strategy in 2018, when Beijing imposed punitive tariffs after Washington fired the first shot.

A full-blown business battle ensued, hurting consumers and businesses in and beyond the country’s leading two economy, with its influence still lingering now.

This day, China has held off, although officials have warned that” related measures” will be taken to protect the country’s rights and interests.

Roberts from the Atlantic Council stated that Beijing is attempting to avoid a clear intensification with the US, especially given that it struggles with local monetary issues like poor consumer spending and concerns about local debt.

Imports and investment is only spur economic growth, according to Roberts, and I believe that this is a sign that China does not want this to increase further. They aren’t ready to engage in a cool conflict with the US at this time.

According to Olson of the ISEAS-Yusof Ishak Institute, going down the WTO path and halting retribution is a “tactical shift” that allows China to determine how Trump’s tariffs affect Canada and Mexico.

According to researchers, it also leaves Beijing with some room to negotiate a deal with Trump while also preventing the worst US taxes.

Weeks before Trump took office, he had what he described as a “good, friendly” telephone contact with Xi, who the businessman-turned-president invited to his opening.

When asked if he could reach a deal with China over fair business practices, Trump said in an interview with Fox News on January 23 that he could do so. The US leader then followed up by saying he would “rather not” use tariffs against China, but called it ( tariffs ) a” tremendous power”.

Trump said in a statement to reporters at the Oval Office on February 3 that the proposed 10 % blanket tariffs on Chinese goods would only be” an opening salvo.”

” If we can’t create a bargain with China, then the taxes would be very, very substantial”, he said.

In light of this, watch carefully what Trump and Xi will be having in store for the upcoming meeting.

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A thirst for power: China’s water grid shapes its future – Asia Times

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China’s subsequent approval of a large hydropower dam has received a lot of media attention, but little has been written about the nation’s following significant water management strategy, which is the creation of a national water grid.

Will it become the long-awaited alternative to the region’s water problems, or is it another optimistic walk destined to work clean?

In many ways, China’s story is shaped by its connection with fluids. Its creek systems, geography, and hydraulic conditions have played an important role in the government’s advancement.

Assisting frequently point out that these problems were essential to the development of China, the Chinese culture, and the Chinese individuals. This long-standing relationship between China and its waters serves as the context for understanding the country’s contemporary liquid management issues.

Water is a significant tool and a symbol of strength in Chinese history. The role that water plays in maintaining political security has long been understood by Chinese leaders. Yu the Great of the Xia Dynasty, who is said to have tamed the Yellow River, is credited with over 4, 000 decades in this regard.

More recently, water leadership has remained key to China’s development objectives, as evidenced by Chinese President Xi Jinping’s “ecological society” idea and a reserve he published on ocean governance.

The design of a nationwide water network is the most recent development in China’s water management. This initiative aims to promote more equitable access to water across the nation and tackle water shortage in northern China. The national water grid system known as the sanzhong siheng is connected to the South-North Water Transfer Project ( SNWTP).

” Sanzhong” refers to the SNWTP’s three routes:

  • the northeast route, via the Beijing-Hangzhou Grand Canal,
  • the mid way, from the Danjiangkou Reservoir in Hubei to Beijing and Tianjin, and
  • the questionable northern road.

” Siheng” refers to the four eastern-flowing river: Haihe, Yellow, Huaihe and Yangtze.

Onw essential part of the three” sanzhong” – the eastern route – has not yet been built. The eastern route is still in the planning stages despite the construction of the middle and eastern routes.

The Qinghai-Tibet Plateau will serve as the eastern route’s main channel for the 17 billion cubic meters of water that will flow from the Yangtze River to the Upper Yellow River each year. However, the size and complexity of this equipment project make it unlikely that it will be completed, adding a threat to the entire strategy.

The purpose of the ocean network is to address China’s essential water challenges. Despite holding around 6 percent of the nation’s water resources, &nbsp, the country now faces major water challenges mainly due to water quality concerns, inconsistent water distribution, and a per capita water availability below world average.

These problems are worsened by competing liquid needs from industrialisation, agricultural demands and quick urbanization.

The country’s national water network has issues and implications for China. It truly reflects Beijing’s rely on large-scale infrastructure projects to resolve water issues.

This engineering-driven technique, rooted in Chairman Mao Zedong’s conviction that “man must destroy nature”, has led China to undertake on more than 100 escape jobs in the past century alone. Although these projects represent a concerted effort to address water scarcity, they also highlight the drawbacks of relying solely on engineering to solve complex environmental issues.

Concurrently, China’s national water grid aims to further secure the water supply to the northern region.

The Chinese central government’s solution to the region’s water scarcity – &nbsp, large-scale hydro-engineering projects– has reshaped water distribution, easing scarcity in northern China. But has come at a high price. The North China Plain’s water supply is dependent on the SNWTP.

For example, Beijing, which remains vulnerable to drought, sources over 70 percent of the city’s water from this inter-basin transfer project. &nbsp,

Such reliance on a single source poses risks to long-term water security, especially when climatic or infrastructure changes become unpredictable. In light of this, the national water grid can support the efforts being made to supply this rapidly industrialized and urbanized arid region with water.

Major challenges remain. Climate change impacts – in particular, severe and disruptive extreme weather events– are one of the biggest concerns. Estimates predict that China’s efforts to manage the national grid effectively will cost over US$ 47 billion annually. The national water grid’s resilience will likely need more frequent adjustments as a result of climate change.

Equally concerning is the question of financing. It’s unclear how China will finance such ambitious infrastructure projects because local governments are caught in a vicious cycle of high debt, declining revenues, and government debt projected to account for nearly 150 percent of GDP by 2030.

The continued focus on supply-side solutions, particularly via engineering projects to redistribute water, is another major concern. This approach can lead to unintended consequences, such as water shortages downstream from diversion projects.

Water in the downstream Han River has been reduced as a result of the Danjiangkou Reservoir’s transfer of water to the north. These difficulties highlight the limitations of concentrating solely on supply-side measures without considering issues relating to water efficiency or consumption.

Beijing should think about adopting a more balanced approach to ensure a resilient water management system as well as investing in demand-side initiatives to increase water efficiency and reduce consumption. By balancing supply-side solutions with demand-side measures, China can create a more sustainable and resilient water management system.

A comprehensive strategy that addresses both supply and demand issues is required in addition to the national water grid, which is a bold step toward securing China’s water future. Only then can the nation effectively conserve its water resources.

Genevieve Donnellon-May is a researcher at Oxford Global Society and a fellow at the Indo-Pacific Studies Center. She was chosen as a young leader for the 2023 Pacific Forum and serves on the Modern Diplomacy advisory board.

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Trump’s tariffs hand China a free-trade opportunity – Asia Times

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Donald Trump’s subsequent phrase is off to a aggressive start, and the first casualty may be America’s personal influence. &nbsp,

His broad tax increase, including 25 % duties on imports from Mexico and Canada, a 10 % tax on American power and new tariffs on Chinese goods, underscores a US shift towards extreme economic nationalism. &nbsp,

He has also indicated that the EU will soon face taxes, which will rattle the world’s markets even more. While Trump asserts financial leverage, China appears well-positioned to profit.

The example of Colombia’s reaction is one. Gustavo Petro, the country’s president, next year formally challenged the United States over the treatment of deported workers. &nbsp,

Shortly after, Trump imposed tariffs on Chilean exports, imposed banking restrictions, and prohibited government officials from traveling to the US. The walk was a hard power switch in Washington’s strategy, one that could have broader repercussions for global partnerships.

However, its effects remain to be seen if the White House considers this to be a necessary strong position. &nbsp,

The event highlights the unpredictable nature of American relationships abroad under Trump. Others may try to diversify their alliances if one nation that has historically been associated with Washington is suddenly subject to unexpected financial abuse. &nbsp,

And Beijing, with its growing economic relationship in Latin America, is watching attentively.

For decades, China has positioned itself as an alternative to US monetary management. Its Belt and Road Initiative, which offers infrastructure money with fewer social requirements than Western loans and help, has significant investment in Latin America, Africa, and Southeast Asia. &nbsp,

In Latin America only, Beijing’s trade and financial relationships have expanded greatly. Then, as Trump reintroduces price threats and financial pressure, China’s part as a stable trading partner becomes more attractive.

This move isn’t simply economic. Washington has long relied on its reputation for uniformity and adhering to international treaties. &nbsp,

Institutions like the WTO provided some security even when Trump stifled international commerce during his first term. Some nations may reevaluate their dependence on US trade now that punitive economic measures are being put under renewed scrutiny.

Denmark and Panama, two nations already drawing Trump’s attention, offer more insight into these interactions. Trump’s desire to purchase and threaten to buy Greenland and problems over the Panama Canal serve as examples of how financial liquidity is increasingly being used as a political tool. &nbsp,

Beijing, which has already built financial alliances in both countries, could gain if tensions with Washington rise. After US Secretary of State Marco Rubio criticized the government during his Sunday visit, Panama pledged free passing for US ships through the Panama Canal and said it did not renew its involvement in China’s Belt and Road Initiative.

Finally there’s Mexico and Canada, America’s closest buying lovers. With Trump following through on rocky 25 % taxes, the consequences will extend beyond North America. Under NAFTA and its heir, the USMCA, years of economic integration may be challenged. &nbsp,

China, constantly expanding its business relationships worldwide, may be a more beautiful partner for manufacturers and governments seeking long-term stability.

None of this, to be sure, will cause a significant transition apart from the US and toward China. Some nations are careful about Beijing’s investment plans, especially those that have had trouble with debt and concerns about influence. &nbsp,

But Trump’s method does make China look more repetitive by comparison. Unlike Washington, Beijing tends to prevent placing social conditions on business or repeated tariff escalations. For nations afraid of plan uncertainty, that regularity carries weight.

For the US, the dangers of this technique are important. China is now viewed as a significant financial spouse by an increasing number of Latin American nations. &nbsp,

Washington was experience trade reversals as well as a deterioration of its local impact if Trump’s guidelines push them even further toward Beijing. The more America’s friends feel uncertain about their position, the more likely they are to observe other alliances.

China doesn’t need to get aggressive steps to profit, it may simply need to give a firm option. &nbsp,

As Trump continues asserting his economic perspective, the broader question remains: did these policies strengthen America’s place, or did they create openings for competitors like China to get ground?

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Will DeepSeek deep-six the US economy? – Asia Times

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By selling technology companies to immigrants, America has financed a current account deficit that soared to US$ 1.2 trillion in 2024. Tech stocks, however, are trading at valuations not seen since 2000, when the NASDAQ Composite began a descent that wiped out 75 % of its market capitalization by 2002.

If expectations deteriorate regarding synthetic intelligence’s ability to generate revenue, was a technology crash lead to a financing crisis for the United States? The question of the January 27 collision in AI-related stocks in response to less expensive and more effective Chinese rivals still lingers. Every capital investment in the world pays close attention to these issues.

Graphic: Asia Times

Europeans stopped buying US debts of all kinds – Treasury, loan, and business – after the post-Covid prices of 2021 and the Federal Reserve’s subsequent rise in interest rates. That signaled the end of a 40-year bulls industry in US securities. From a 1981 peak of 15 %, the US 30-year bond yield fell in a nearly straight line to an August 2020 low of just 1.41 %.

The inflationary wave of 2021-2022 put an end to this bull work. In March 2022, moreover, the US and its allies seized half of Russia’s$ 600 billion in foreign exchange reserves, prompting other central banks to shift away from US Treasury securities to gold and other assets.

However, the world’s appetite for American tech stocks has been stagnant for the past ten years, which was rekindled by the development of Large Language Models ( LLMs) last year. Are raised valuations for AI-related shares justified? Which two aspects affect how quickly and which industries are most likely to make money from AI?

China’s DeepSeek R1 type appears to have made a model performance discovery: tale layout and related improvements reduce the amount of processing required by one or two orders of magnitude.

DeepSeek, also, offers its unit at a small fraction of the price that its US competitors then charge. That is not always detrimental to the overall US tech sector. If China has a better systems, US companies may choose it speedily, and lower costs for AI simulation does benefit the users of AI models.

US and China compete in seven distinct subcategories of AI uses. China leads most of them, and its Artificial skills are likely to strengthen it. They are

  1. Manufacturing: China has poured huge resources into stock technology. One test is the number of companies outfitted with devoted 5G systems, which support AI applications. China claims 10, 000 for installations, while the US has only a few hundred, concentrated in the automobile industry. The benefit is enormously advantageous for China, and breakthroughs in AI are likely to help. However, US production has had a small influence on equity valuations.
  2. Internet of Things: China is back in simplifying vehicles and warehousing, with entirely mechanical stores now in operation.
  3. China is now a major manufacturer of professional computers, installing more industrial computers each year than the rest of the world combined.
  4. China leads the so-called low level market, which was first cited by federal planners in a December 2024 working papers. Drone taxis, drone deliveries, and other applications are currently a$ 100 billion industry in China, and they are projected to double by 2026.
  5. Autonomous cars: We’ll call this a toss-up between the US and China, although China now has autonomous car companies operating on a smaller scale.
  6. Huge Language Models: afterwards, a toss-up. The Philippines ‘$ 40 billion call center business, which saw the most potential gain from AI systems, includes the gains made by LLMs. However, at this point, there are no guarantees that Bachelor applications will be approved for all of their possibilities because they are so varied and extensive.
  7. Biotech: The US has a distinctive advantage with a powerful medical development system. China has a direct in health statistics, but America’s advanced of large pharmaceutical companies, businesses and venture entrepreneurs give it an edge.

The big question is about LLM’s timing. Although the payoff might be significant, it may not be as quick as anticipated.

LLM deployment in the enterprise still has little to do with organizational performance and human adaptation ( management buy-in, workflow adjustments, etc. ). seems to be years away. Cost savings for specific categories of expenses, such as call centers or repetitive coding tasks, may be easily realized. However, the development of AI for higher-skill work is still in its infancy.

What does this mean for Nvidia’s chipmakers? On the assumption that Nvidia GPUs will provide a lot of this activity, one could argue a bullish case for Nvidia based on all of the AI sectors listed above. However, this hypothesis requires closer scrutiny of Nvidia’s competitive advantages.

Nvidia has a greater advantage in computation when training language and vision models, but less so when inference ( running the resulting models to get useful results ) is at its disposal. Notably, Huawei’s Ascend AI chips already perform fairly well with the new DeepSeek models, with comparable or even better cost performance than the weakened Nvidia H800s ( the weakened Nvidia chip that was cleared for export to China ) &nbsp.

Additionally, the case that the top US tech companies ( the so-called Magnificent Seven ) will control equity returns going forward is much weaker than the market is currently perceptive of it. If we are right, and tech market valuations shrink to some significant extent, what are the macroeconomic implications? Key capital flows are more dependent on a small number of very large companies than at any other time in US history.

Let’s say foreigners reduced their purchases of tech stocks as the value of the stocks declines. The United States would need to sell more bonds to both domestic and foreign investors to pay off its current account deficit and federal budget deficit. The chart below shows the amount of new Treasury debt bought by US banks, US households, foreign official institutions, and foreign private investors, respectively.

Banks stepped in and reabsorbed the$ 4 trillion in Covid subsidies that were funded by the Treasury debt, but by 2023 they had exhausted their savings deposits. Households, who were drawn to the higher interest rates on Treasuries, saw the biggest increase in new investment in Treasury securities. Additionally, foreign private investors decreased their Treasury holdings. &nbsp,

A full-blown financial crisis is most unlikely. The cash-burning dotcoms of 2000 have been replaced by cash-rich monopolies like Microsoft, Google, Apple, Amazon and Meta. By offering higher bond yields to domestic and international investors, the United States can adjust to an air-pocket in the demand for its tech stocks.

However, the DeepSeek shock exposes flaws in Big Tech’s core strategies as well as in the stratospheric valuation of its best-performing stocks. The outcome is likely to be a combination of persistently higher interest rates, slower growth, a decline in wealth, and strong economic headwinds.

Graphic: Asia Times

The S&amp, P’s technology sector, correspondingly, trades at a P/E of 37, compared to an overall P/E for the S&amp, P 500 of 26. That accounts for the largest portion of the difference between the lofty valuations of American stocks and those of European, Japanese, and Chinese stocks.

Graphic: Asia Times

A brass-tacks gauge of equity valuation is the free cash flow (FCF ) yield, namely the ratio of cash income to market price. Investors accept less current income because they anticipate higher income in the future, the higher the FCF is expected to be. For the S&amp, P 500 as a whole, FCF is below 3, a level not seen since the eve of the tech stock crash of 2000.

Graphic: Asia Times

For a monopoly like Microsoft, the free cash flow yield has fallen to just 2, the lowest on record.

Graphic: Asia Times

Between 2020 and 2024, Big Tech invested more than double in capital expenditures, and it is still investing heavily in AI-supporting data centers. The DeepSeek shock raises questions about the viability of these plans economically: If Chinese developers can create cutting-edge models using innovative model architecture designs, the raw computing power under development could be significantly overvalued.

Graphic: Asia Times
Graphic: Asia Times

To entice price-sensitive buyers into the Treasury market, the US government—still running a record peacetime non-recession deficit of 6 % to 7 % of GDP—probably will have to offer higher yields. That’s a problem for the economy and also a problem for the Treasury, which is already paying$ 1 trillion a year in interest, nearly quadruple the service cost of America’s national debt in 2020.

It also puts a headwind in front of the US economy for interest-sensitive activity, particularly housing. Longer-term, the US runs the risk of an Italian-style spiral, in which the rising cost of debt service eats away at the budget and limits what the federal government can do to support the economy.

Steve Hsu is professor of theoretical physics and of computational mathematics, science, and engineering at Michigan State University, and the founder of several AI startups. Follow him on X at @hsu_steve. David P. Goldman serves as Asia Times ‘ deputy editor. Follow him on X at @davidpgoldman

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