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【讀者分享 🇺🇸🇨🇳】 投行眼中的美中「對等關稅戰」（英文長版）
🕑 Added 2025-04-24 02:01:03 +0000 UTCThe 2025 reciprocal tariff represents another major escalation in the ongoing U.S–China trade war, paused briefly during COVID-19. It also signals Donald Trump’s renewed ambition to reshape the global trade order and revitalize U.S. industry. At present, other countries are becoming collateral damage in this intensifying rivalry between the world’s two economic giants.
The world is moving into a “post-modern stage”. As Peter Oppenheimer (Goldman Sachs) noted, we’re entering a “post-modern stage” of the global economy. Globalization is giving way to fragmented bilateral agreements. Allies such as Europe, Canada, Mexico, Taiwan, and Japan are likely to strike deals with the U.S. while China may find itself increasingly isolated—regardless of its willingness to compromise. Economic decoupling is well underway, and political decoupling is happening already.
Tariff policy is part of national security agenda. With no historical precedent to rely on, both academia and market analysts are struggling to interpret its implications—compounded by the unpredictable nature of the president. While there is general consensus that tariffs will stoke inflationary pressures and potentially lead to a recession, the timing, depth, and duration remain uncertain. These outcomes are subject to negotiation, retaliation, market volatility, shifts in monetary policy, and investor sentiment. Volatility will reign, and liquidity remains fragile.
It is still early to conclude the end of “US exceptionalism”. “This is still the most prosperous nation on the planet, [with the] the deepest and widest capital markets the world has ever seen,” (Jamie Dimon said to reporters on Friday. ) 」 “If you’re going to invest your money in something, America is still a pretty good place in a turbulent world.” Concerns around China's use of U.S. Treasury holdings, the dollar’s long-term strength, and the durability of U.S. equities persist. Recent long-end Treasury selling has spooked markets, especially in the context of potential erosion of US treasury’s "flight-to-quality" status. But despite rising uncertainties, there remains no true alternative to the U.S. in terms of total GDP, productivity, innovation, deregulation, and entrepreneurship. If the U.S. enters a recession, few nations would benefit—and unfortunately should China decline further, global repercussions might be significant as well, including for the U.S. But as the dominant rule maker of old and new global order, America is still having its unique prestige.
Also it is early to regard the recession as an imminent risk. Although many mainstream analysts assign a high probability, frequently revising estimates from below 50% to above 60%, only to pull back to 45% hours after Trump paused further tariff. I still believe the American economy has the resilience and strength to navigate uncertainty. The health of private sectors either from their balance sheet, profitability will provide assurance. There is no funding crisis as we experienced in 2008. There is neither the high valuation concern of top technology name as that in 2000 internet bubble. There is no inflation shock from oil price as that in 1970s. So far the uncertainty, the panic, the herd mentality are very entangled with the market behaviour.
Tariff seemed a “mission impossible” when tasked with resolving America’s structural challenges: the twin deficits, a hollowed-out manufacturing base, a lagging supply chain, a weakened defense industry, and declining shipbuilding capacity etc. Many economists and investors criticize the protectionist nature of the policy. Yet few offer viable alternatives are given—particularly when framed within the national security context. No pain, no gain. America has long benefited from globalization, but it has also led to unsustainable deficits. The resulting pain may be prolonged and disruptive, potentially straining strategic relationships with allies. But time will tell whether in near term, tariffs may boost revenues; in the long term, they may help revive U.S. manufacturing. For the Trump administration, tariffs are the only important lever to exert America’s bargaining power as the world’s largest economy and the holder of the world’s largest trade deficit, which also will protect it against the mounting threat from China in geopolitics.
Comments
lyk
“ China may find itself increasingly isolated—regardless of its willingness to compromise” — China is not Russia. This will be answered soon enough. “But time will tell whether in near term, tariffs may boost revenues; in the long term, they may help revive U.S. manufacturing” — both run into basic math problems. “Many economists and investors criticize the protectionist nature of the policy” — they are more like criticisms from affected countries. Economists criticise the lack of due thought, the recklessness and contradictions they represent. “It is still early to conclude the end of “US exceptionalism”” — US will remain important for a long time. But we will increasingly see the limit of America’s power. The Treasury rate will remain the risk-free rate for a long time, but everyone knows it is not risk-free anymore. The US is still the favourite by far to win the Olympic gold medal in men’s basketball, but they think they are invincible. Every other team knows they are not. Now they have a target on their backs.
George
In addition to Scott Bessent, Trump’s team has invited several Wall Street stars to join the MAGA program. One of them is Michael Grimes who took on a role as a senior adviser at the Commerce Department last month. As Silicon Valley’s top IPO rainmaker, Grimes built his reputation over his three-decade career at Morgan Stanley, leading a number of high profile tech IPOs for companies like Meta, Uber, and Airbnb. He also advised Elon Musk on his $44 billion takeover of Twitter. Grimes is now heading the US Investment Accelerator, an office aimed at encouraging both domestic and foreign companies to invest money in the US. This initiative is part of the Trump administration’s “America First” agenda which seeks to reinvigorate US production and manufacturing, while reducing reliance on imports. His role involves serving as a liaison for companies that commit to investing $1 billion or more in the US and providing them with white glove service. For all the responsibilities we know so far, he’s expected to act much like the investment banker he once was, crafting proposals and brokering introductions. One of his primary duties will be overseeing the implementation of the CHIPS and Science Act, which the Biden administration passed to support America’s semiconductor R&D and manufacturing. Having newcomers such as Musk and business-driven folks from non-government sectors, they’ve created a goal-oriented and taboo-free model that not only goes well beyond reasonable bounds but also challenges the boundaries of what should be legally permitted within a president’s authority in a tireless and intensive manner, aiming to gradually instill the concept of “institutionalized changes” in the public. Ironically, Trump is the truly president who dares implement Obama’s “Change” slogan. The MAGA program appears designed to advance on multiple fronts. Despite Trump’s market-shaking tariff war which faced unprecedented market reactions—such as a dramatic selloff of government bonds, plunging global stock markets and the dollar, and China’s tit-for-tat counterattack—it’s only one instrument in his toolkits of achieving his broader “America First” agenda. If MAGA is Trump’s top priority, he seems unconcerned about short-term economic disruption in his master plan. Yet he’s willing to backtrack on his tough stance if market realities prove the induced effects to be significant or long-lasting. Imposing sweeping tariffs, which many consider an extraordinarily heavy sledgehammer, is viewed by Trump and his cabinet the really effective means of dismantling unilateral agreements under long-corrupt or enemy-hijacked institutions and of swiftly cutting a bilateral deal with each trading partner with political add-ons. More importantly, this deal-with-all-at-once strategy aims to establish a clear line between capitalism bloc and predatory capitalism bloc and to rev up the process of decoupling with China’s manufacturing chain, compelling allies and neutral countries to take sides. Regardless of whether the tariff war may temporarily cease, other initiatives within the MAGA program could disrupt global markets and economy, as the reasons for disruption are increasingly shifting from economic factors to politically driven ones. Fierce winds blown by Trump’s big mouth will continue to roil the sea of our economy.
