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Friday, April 11, 2025

11: Tariffs

Bessent revealed the first layer: debt management.

$9.5 trillion needs refinancing in 2025.

Market volatility pushed investors toward Treasury bonds.

Yields dropped below 4%, saving billions in interest.

Tariffs aren't just trade policy - they're fiscal strategy. pic.twitter.com/GHWTdZ4LsN
— Karl Mehta (@karlmehta) April 10, 2025

Lower interest costs help, but won't fix $36T in debt.

The second part of the plan: slashing spending.@elonmusk & @DOGE cutting $4B daily - heading toward $1T in savings by September (if not sooner). pic.twitter.com/vkF0VMtqgB
— Karl Mehta (@karlmehta) April 10, 2025

Who's first in line to negotiate?

Vietnam meeting today.
Japan sending a deal team.
South Korea, India at the front.

"China's neighbors" rushing to Washington's table. pic.twitter.com/ou5Yyqf2Do
— Karl Mehta (@karlmehta) April 10, 2025

According to Bessent, the main beneficiaries will be American workers:

Countries aligning with American interests get preferential trade terms.

Those that don't (like China) face massive tariffs up to 125%.

It's economic leverage as geopolitical power. pic.twitter.com/PuTaAc6z37
— Karl Mehta (@karlmehta) April 10, 2025

Trump's strategy targets three groups:

• Trading partners (10% baseline tariff)
• Neutral countries (sectoral tariffs remain)
• China (punitive 125% tariffs)

"Everything else was a ceiling for negotiations."
— Karl Mehta (@karlmehta) April 10, 2025

These tariffs could reshape global supply chains while generating billions in revenue.

Companies face a stark choice: pay tariffs or invest in American production.

The implications are massive for communities devastated by decades of offshoring: pic.twitter.com/XWfHcUFxoc
— Karl Mehta (@karlmehta) April 10, 2025

Trump’s Trade War

"These are imbalances that have taken decades to create."

If manufacturing returns:

• Hollowed-out communities revive
• National security improves
• Supply chains become resilient
• American workers gain leverage

This is economic realignment, not just trade policy. pic.twitter.com/jeLZ19szs5
— Karl Mehta (@karlmehta) April 10, 2025

The most fascinating part of Bessent's strategy?

How it transforms global alliances.

Vietnam, Japan, South Korea, and India are first in line for negotiations.

Asian nations—China's neighbors—are being pulled into America's economic orbit. pic.twitter.com/rxoocCGX1l
— Karl Mehta (@karlmehta) April 10, 2025

"For decades Republicans and Democrats have said unfair trade practices are ripping off the American people, but nobody has ever done anything."

If successful, this creates:

• Manufacturing revival
• Balanced global trade
• Stronger national security
• Lower borrowing costs pic.twitter.com/SJEy9ltiUE
— Karl Mehta (@karlmehta) April 10, 2025

Old-fashioned diamonds from the mines are absolutely cooked

Lab-grown diamonds now make up 80% of Gen Z engagement ring sales

Over the last 2 years the industry flipped— These new science diamonds are chemically, microscopically, and visually exactly the same at 1/10th the cost…
— Nick Gray / How to Make Friends (@nickgraynews) April 11, 2025

Makes sense
pic.twitter.com/DYxaBEaQyf
— Elon Musk (@elonmusk) April 11, 2025

Obama too pic.twitter.com/qXsfsMIWhP
— CoolHandMe (@CoolHandMe33) April 11, 2025

This is funny haha pic.twitter.com/2wBUoiueCL
— The Immortal (@TheImmortal007) April 11, 2025

pic.twitter.com/BxS2AMASA7
— Sam Altman (@sama) April 10, 2025

pic.twitter.com/tIWHNoG9rt
— Sam Altman (@sama) April 10, 2025

Trump’s Trade War

What Happens When a Country Runs a Trade Surplus with the World?

Trump’s Trade War

What Happens When a Country Runs a Trade Surplus with the World?

Understanding the Long-Term Effects of Persistent Trade Surpluses

Introduction

What if a country manages to run a trade surplus not just with a few trading partners, but with most—if not all—countries? In the short term, this might seem like a sign of economic strength. But zoom out, and you’ll find the situation becomes more complex. Economic theory provides insights into what such persistent surpluses mean for global trade balances, currency valuation, domestic consumption, and even geopolitical dynamics.

What Is a Trade Surplus?

A trade surplus occurs when a country exports more goods and services than it imports. It earns more foreign currency than it spends, and the difference adds to the country's current account surplus.

When this surplus is widespread—with most trading partners—it means the country is essentially supplying the world with more value than it consumes from it.

Why Would a Country Want a Trade Surplus?

Boosts Domestic Industry: More exports can mean stronger manufacturing and job creation.
Foreign Currency Reserves: Surpluses add to a country’s stockpile of foreign currencies, which can be used to stabilize its own economy.
National Strategy: Some nations—most notably China, Japan, and Germany—have used trade surpluses as a strategy to accelerate economic growth.

But while there may be short-term benefits, long-term imbalances are not without consequences.

What Happens in the Long Run?

1. Currency Appreciation

According to classical balance-of-payments theory, a sustained trade surplus increases global demand for the surplus country's currency—because buyers need to convert their own currencies to pay for its exports. This causes the surplus country’s currency to appreciate.

As the currency appreciates:

Its exports become more expensive to the world.
Its imports become cheaper.
Over time, this should naturally reduce the surplus and bring trade into balance.

This is what’s supposed to happen in theory.

2. Currency Manipulation & Intervention

To prevent the currency from appreciating and to maintain the surplus, some governments intervene in currency markets:

Buying foreign currency (e.g., U.S. dollars) to suppress the value of their own currency.
Imposing capital controls or other monetary measures to resist appreciation.

This delays the balancing mechanism, but it introduces distortions that build up pressure over time—often ending in sharp corrections or international trade tensions.

3. Global Imbalances & Deflationary Pressures

A country that consistently exports more than it imports is, by definition, absorbing less than it produces. This means:

Other countries must run deficits to absorb the surplus.
Global demand is artificially suppressed, creating a deflationary drag on the world economy.
Trade partners may retaliate with tariffs, currency wars, or import restrictions.

These imbalances are part of what triggered major shifts in trade relations, like the U.S.–China trade war.

4. Domestic Economic Challenges

Ironically, a persistent surplus can hurt the surplus country:

Underconsumption: Citizens may be encouraged to save excessively and not spend, dampening domestic demand.
Dependence on Foreign Demand: The economy becomes vulnerable to global downturns.
Asset Bubbles: When trade surpluses are recycled into foreign assets (like U.S. Treasury bonds), it can inflate financial bubbles abroad and stoke inequality at home.

Japan in the 1980s and China post-2008 both illustrate these risks.

What Does Economic Theory Say?

In macroeconomics, trade imbalances are unsustainable in the long run. The "Marshall-Lerner condition" and Purchasing Power Parity (PPP) principles suggest that exchange rates and trade flows will adjust over time to restore equilibrium—unless policies interfere.

In essence, a persistent global surplus is a signal of distortion—not strength. Markets seek balance. If policy distorts those market signals, eventual corrections can be more painful.

Conclusion: The Illusion of Endless Surpluses

Running a trade surplus with most of the world might seem like winning the global economic game, but it's more like holding your breath underwater. Eventually, you have to surface. The global economy is an interconnected system—one country’s surplus is another’s deficit.

While surpluses can stimulate development and industrial growth, they must eventually give way to domestic consumption, currency revaluation, and rebalancing. If not, the pressure builds—until markets or politics force a reset.

In the end, economics has no free lunch. Even a surplus can turn into a liability if it’s maintained by force rather than balance.

Trump’s Trade War

The Best Possible Outcome for the US-China Trade War — And How to Get There
The Trump–Xi Trade Saga: From Tariff Wars to Economic Brinkmanship
Hillary's Self-Goal, Kamala's Self Goal
The Silence Around the Trade War Is What Worries Me Most
Why Can’t the U.S. Build Bullet Trains?
How Does China Do What It Does? Unpacking the Secrets Behind the “World’s Factory”
Trump’s Tariffs and the Coming Great Disruption
The Coming Storm: What Happens Now That Trump Has Slapped Tariffs on the Entire World
The Emperor and the River: Why Manufacturing Jobs Aren’t Coming Back Why the U.S. Has Trade Deficits (And Why That Might Be by Design)
WTO Minus One: Trump’s Tariff Chaos and America’s Self-Inflicted Decline
China And Trade
Trumponomics: A 1600s Idea in 21st Century Clothing
Economic Theories That Disagree with Trump's Tariff Policy
$8 Billion Is Insufficient to End World Hunger
The Structure Of Trump's Victory
Only The Kalkiist Economy Can Fully And Fairly Harvest AI
मैं कपिल शर्मा शो का बहुत बड़ा फैन हुँ

How BYD Is Beating Tesla at Its Own Game
Revolutionizing Email: From Chronological Chaos to Smart AI Agents
The Next Smartphone Will Have IOT Elements
Building Tools Versus Solving Big Problems

Trump’s Trade War

Trump’s Trade War
Peace For Taiwan Is Possible

Trump’s Trade War

Trump’s Trade War
Peace For Taiwan Is Possible

Trump’s Trade War

11: Tariff Chaos Continued

Trump’s Trade War

Thursday, April 10, 2025

10: Tariff Chaos Continues

Trump’s Trade War

The Best Possible Outcome for the US-China Trade War — And How to Get There

Trump’s Trade War

Trump’s Trade War
Peace For Taiwan Is Possible

Trump’s Trade War

The Best Possible Outcome for the US-China Trade War — And How to Get There

🌐 A Trade War with Global Consequences

The escalating trade tensions between the United States and China are no longer just a bilateral issue—they’ve become a threat to the global economy. With tariffs soaring, markets trembling, and supply chains rattled, the rest of the world watches nervously. But it doesn't have to end in economic wreckage. A better path is possible—one that benefits both Washington and Beijing, and stabilizes the broader international system.

So what would the best case scenario look like? And what steps must be taken—by both nations—to move from confrontation to cooperation?

✅ The Best-Case Scenario: Mutual Gain through Fair Trade and Strategic Cooperation

Restoration of Predictable Trade Relations
- The U.S. and China agree to reduce tariffs to pre-2018 levels.
- Both commit to transparent trade practices monitored by neutral third parties like the WTO.
- The Phase One trade deal is either revised or replaced with a long-term trade agreement grounded in measurable, enforceable goals.
Technological Competition Without Decoupling
- The two powers agree on frameworks for fair competition in technology sectors without forcing a global tech “cold war.”
- Joint forums are created to discuss ethical AI, data governance, and semiconductor supply chains.
Global Supply Chain Stabilization
- The U.S. and China coordinate on diversifying but not severing supply chains.
- They build resilience against future disruptions without resorting to zero-sum policies.
A New Economic Dialogue Framework
- A high-level, recurring U.S.-China Economic Cooperation Council is established with rotating working groups on trade, technology, and sustainability.
- Academic, business, and civil society leaders are included to depoliticize and broaden the conversation.
Global Impact: Economic Recovery and Stability
- With the world's two largest economies cooperating, global markets stabilize.
- Developing countries no longer suffer collateral damage from trade volatility.
- Innovation and investment pick up as uncertainty fades.

🤝 How the US and China Can Deescalate

What the United States Can Do:

Tone Down the Rhetoric: Shift from nationalist framing to pragmatic problem-solving.
Lift Excessive Tariffs: Targeted tariffs may be necessary, but broad-based ones hurt American consumers and businesses.
Rebuild Multilateral Coalitions: Work with allies to ensure a united, rules-based global trading system.

What China Can Do:

Open Up Its Markets: Reduce barriers for foreign firms and improve legal protections for intellectual property.
Curb Industrial Subsidies: Gradually wind down support that creates global distortions in sectors like steel and solar panels.
Enhance Transparency: Especially in data governance, cybersecurity rules, and business operations of state-owned enterprises.

🌏 A Call for Global Leadership

At a time when climate change, pandemics, and geopolitical risks demand unified responses, a prolonged U.S.-China economic war is a distraction the world cannot afford. Both nations must show the maturity to see beyond short-term political wins and recognize their shared responsibility as global stewards.

The best outcome isn't one in which one side "wins"—it's one where both sides rise. Economic peace between the U.S. and China would not only lift both economies, but also signal to the world that cooperation, even between rivals, is still possible.

Conclusion: The U.S.-China trade war has shown us what fracture looks like. It's time to show the world what repair looks like. The stakes couldn’t be higher—and the opportunity, no less profound.

Trump’s Trade War

The Trump–Xi Trade Saga: From Tariff Wars to Economic Brinkmanship
Hillary's Self-Goal, Kamala's Self Goal
The Silence Around the Trade War Is What Worries Me Most
Why Can’t the U.S. Build Bullet Trains?
How Does China Do What It Does? Unpacking the Secrets Behind the “World’s Factory”
Trump’s Tariffs and the Coming Great Disruption
The Coming Storm: What Happens Now That Trump Has Slapped Tariffs on the Entire World
The Emperor and the River: Why Manufacturing Jobs Aren’t Coming Back Why the U.S. Has Trade Deficits (And Why That Might Be by Design)
WTO Minus One: Trump’s Tariff Chaos and America’s Self-Inflicted Decline
China And Trade
Trumponomics: A 1600s Idea in 21st Century Clothing
Economic Theories That Disagree with Trump's Tariff Policy
$8 Billion Is Insufficient to End World Hunger
The Structure Of Trump's Victory
Only The Kalkiist Economy Can Fully And Fairly Harvest AI
मैं कपिल शर्मा शो का बहुत बड़ा फैन हुँ

How BYD Is Beating Tesla at Its Own Game
Revolutionizing Email: From Chronological Chaos to Smart AI Agents
The Next Smartphone Will Have IOT Elements
Building Tools Versus Solving Big Problems

Trump’s Trade War

Trump’s Trade War
Peace For Taiwan Is Possible

Trump’s Trade War

Trump’s Trade War
Peace For Taiwan Is Possible

Trump’s Trade War

The Best Possible Outcome for the US-China Trade War — And How to Get There https://t.co/zUYlo3VOvW
— Paramendra Kumar Bhagat (@paramendra) April 11, 2025

People bring ideas with them.
— Paramendra Kumar Bhagat (@paramendra) April 11, 2025

Trump’s Trade War

10: Tariff Pause

Trump’s Trade War

Wednesday, April 09, 2025

90 Day Pause

9: Trump

American Gorbachev?

Trump’s Trade War

Indian Media Calling Trump The American Gorbachev, The One Who Brings The Empire Down

Trump’s Trade War

Some in the Indian media are calling Trump the American Gorbachev, the one who brings the empire down, dramatically so. The WTO was architected and led by the US. Trump is busy dismantling it. There seems to be no economic theory behind his moves. If any exists, it harks back to the days before Adam Smith wrote his book. It is called mercantilism.

The only sane thing to do at this juncture is the effort spearheaed by Senatore Elizabeth Warren in the US Senate. The US Congress has the power to undo the damage and rescind the tariffs.

Trump’s Trade War

The Silence Around the Trade War Is What Worries Me Most
Why Can’t the U.S. Build Bullet Trains?
How Does China Do What It Does? Unpacking the Secrets Behind the “World’s Factory”
Trump’s Tariffs and the Coming Great Disruption
The Coming Storm: What Happens Now That Trump Has Slapped Tariffs on the Entire World
The Emperor and the River: Why Manufacturing Jobs Aren’t Coming Back Why the U.S. Has Trade Deficits (And Why That Might Be by Design)
WTO Minus One: Trump’s Tariff Chaos and America’s Self-Inflicted Decline
China And Trade
Trumponomics: A 1600s Idea in 21st Century Clothing
Economic Theories That Disagree with Trump's Tariff Policy
$8 Billion Is Insufficient to End World Hunger
The Structure Of Trump's Victory
Only The Kalkiist Economy Can Fully And Fairly Harvest AI
मैं कपिल शर्मा शो का बहुत बड़ा फैन हुँ

How BYD Is Beating Tesla at Its Own Game
Revolutionizing Email: From Chronological Chaos to Smart AI Agents
The Next Smartphone Will Have IOT Elements
Building Tools Versus Solving Big Problems

Trump’s Trade War

Some people are attacking Bill Ackman for supporting Trump and then realizing some of his policies are mistaken. But this is better than not realizing it, or realizing it and keeping quiet, which is what practically everyone else who supported Trump has done. https://t.co/OvWtLuGKCq
— Paul Graham (@paulg) April 7, 2025

Trump’s Trade War
Peace For Taiwan Is Possible

pic.twitter.com/17A9JHT7yy
— Elon Musk (@elonmusk) April 8, 2025

The Most Surreal Views from the Above- A Thread 🧵

1. Mount Fuji seen from the International Space Station! pic.twitter.com/zfh15WohAa
— Ravi Tiwari🇮🇳 (@Ravitiwariii_) April 8, 2025

Trump’s Trade War

Tuesday, April 08, 2025

Trump’s Tariffs and the Coming Great Disruption

Trump’s Trade War
Peace For Taiwan Is Possible

Trump’s Tariffs and the Coming Great Disruption

In the 1920s and 1930s, a wave of protectionism swept the globe. Countries raised tariffs against each other in a self-defeating spiral that deepened the Great Depression. Today, the world faces a very different landscape. While President Donald Trump’s trade policies echo that earlier era of economic nationalism, the global context has fundamentally changed. That’s both a reason for cautious optimism—and for serious concern.

Unlike the interwar period, today’s world is more economically integrated. The rise of regional trade blocs like the European Union, ASEAN, Mercosur, and the African Continental Free Trade Area creates strong counterweights to unilateral trade wars. Countries are more likely now to lower tariffs among themselves to offset the impact of US protectionism, preserving access to markets and supply chains. The global economy has matured, and many nations have learned from history.

Moreover, while the US is still a giant consumer market and the dollar remains the de facto global currency, America no longer holds the same unchallenged dominance. Other economies are better positioned to adapt, realign, and reforge new trade relationships that sidestep the US if necessary. In this environment, Trump’s return to tariffs is unlikely to trigger a Great Depression—but it could very well ignite a Great Disruption.

This disruption may not tank the global economy, but it could seriously damage the US’s long-term position. Tariffs imposed under Trump’s trade agenda are not supported by much mainstream economic theory. Protectionist policies tend to raise prices, hurt consumers, and disrupt global supply chains without delivering long-term competitive advantage. More often than not, they provoke retaliation.

The danger is not only economic but geopolitical. As the US retreats from global trade leadership, other powers—particularly China and the EU—are stepping in to fill the void, reshaping the global order in ways that may not favor American interests. Allies may grow weary of an unpredictable US trade policy and seek greater self-reliance or deeper regional ties.

Trump's tariffs might not collapse the global economy, but they could mark the beginning of the US’s gradual marginalization in a multipolar world economy. That’s not a Depression—but it’s still a major disruption. And whether the US comes out stronger on the other side is far from certain.