China now faces 245% Trump tariff
China faces 245% Trump tariff
Just when you think the idiocy couldn't get worse.
Good luck America! It's not a dust bowl this time. It's an orange turd that's gonna ruin you.
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Will probably see further movements from the PRC to sell off US treasury bonds and shifting more away from the dollar in general, along with tighter export restrictions on rare Earth. China already said they won’t keep increasing tariffs, but they seem dedicated to not backing down, and they have the Material means to actually resist US trade aggression.
What would be incredibly based is if the PRC starts paying off loans in Africa with its dollars, decoupling the Global South from the US even further. Gets rid of dollars and debt in the Global South, potentially freeing up new customers for goods produced in China and strengthening ties.
What would be incredibly based is if the PRC starts paying off loans in Africa with its dollars, decoupling the Global South from the US even further. Gets rid of dollars and debt in the Global South, potentially freeing up new customers for goods produced in China and strengthening ties.
This is exactly what's going to happen.
I hadn't thought about this, but you're right, this is the 4D chess play here.
Yep, the reason China hasn't done it long ago is because it was biding time to build up BRICs and BRI so that it has alternative customers, and thus was more reliant on the US as a consumer. Trump's strategy likely would have worked in the 90s, but we aren't in the 90s anymore. Now that the US is destroying economic ties to the PRC, China can respond by severing the US's ties to Africa, Latin America, the Middle East, and SEA. The EU will have to pick either China or the US.
don't get my hopes up!
Would certainly be a huge benefit for African countries to free up money for more consumption, but I'll retain cautious optimism.
China borrows from Africa?
No, it's the other way around of course. The neo-colonized borrow from the neo-colonizer.
Africa has borrowed from everyone. But mostly from the US and EU in the form of USD, usually in contracts that require them to pay back in USD. With the belt and road initiative china added to Africa's loans with much better terms. China could offer additional loans at pennies on the dollar in exchange for the us Treasury bonds, which Africa could use to pay off its loans to the US and EU.
This would effectively shift dozens of countries away from the dollar permanently, while being the single largest anti colonial action in history, while giving china pretty extensive mineral rights across Africa.
Everyone wins in this scenario long term except the US and EU; and china is only hurt in the short term by underselling their us bonds.
“China could offer additional loans at pennies on the dollar in exchange for the us Treasury bonds, which Africa could use to pay off its loans to the US and EU.”
Do you mind explaining that a bit further? I think I grasp what you’re saying but I’m not sure I fully understand how it would work.
Let's say Nigeria signed a predatory loan offered by the US to develop infrastructure. The terms of this loan is that they must pay $xxx USD per year until the loan is paid off with xx% interest. The contract will explicitly state they cannot pay in resources or other currency besides USD (and related bonds) in order to create dependence.
China could offer a loan that gives Nigeria Treasury bonds equal to their total loan to the US, allowing them to pay off their loan to the US in exchange for less total debt to china.
This would change the debtor, but also usually the terms so Africa can now pay the debt however they choose, rather than a specific currency.
Or, more simply, Bob loans Jim twenty Bobbucks and only wants Bobbucks back in the future. Chen has twenty Bobbucks and want Jim's help in the future, so Chen gives Jim the Bobbucks in exchange for a favor or some moneyary debt that isn't Bobbucks. Solving the issue.
Thank you, that is exactly what I was looking for.
American politicians tend to ignore that China has been an empire for two millennia, so the century of humiliation may be an outlier.
