Some supply shock is baked in already, due to shipping cancellations. That's just for items that need to go by ship.
Anecdotal, for a more tech-intensive sector: Pre-tariff, we ordered from a Chinese supplier some electronics - having switched after being repeatedly let down by US counterparts being unable to keep deadlines. Context: are a MNC subcontractor in the chain ultimately for a big-name US science/tech champion trying to get some next generation capital/research equipment. The Product industry in which PRC is catching up fast. And that US big-name firm itself in last couple years committed to rotate into a "friendly" ASEAN country for key engineering work, because they figure it's the only way they could still compete in the upcoming generation. Result - more trans-Pacific round trips in everything. Result for our electronics order - nevermind the cost increase (which is totally unclear btw), these key intermediate goods now simply held up in US customs amid the confusion.
I think safe to say, can repeat this story thousands of times. If even 10% of these cases attempt to switch to US domestic suppliers, it will instantly swamp the domestic spare capacity (which btw already bid way up due to the little-talked-about quasi wartime production for smart munitions and air defenses).
So ... not sure about persistent stagflation, perhaps that depends on when or if the taps are opened on various forms of stimulus? Must defer to the experts such as the author. But if another 4-6 weeks go by with the White House doing their weekly headfake, then indeed we're looking at a repeat of the Covid experience.
The complementary shock on the other side is one of demand. Seems fundamentally simpler to treat.
I think the question at this point is whether there is a deal to be made or not. Trump has shown himself to be ready to change his position on many issues. But, what does President Xi think about this? The danger in playing chicken is nobody swerves. China might be willing to bet that they can hold their society together longer than Trump can hold his tariffs and political coalition together. Professor Roach, as someone with a great deal of on the ground experience in China what are your thoughts on how the Chinese government is planning to play the trade war?
Say what you will but I sure like the idea of the United States’ pharmaceuticals being produced in the U.S. For decades our politicians have been bribed in some way or another and left their constituents hanging in the wind. I hope Trump does well. I find it odd the vitriolic tone so many have about what Trump is attempting to do: help our country. Would people prefer Kamala? Could the U.S. as a republic survived for very much longer under the “leadership” of the (Marxist) democrats, the controlled opposition republicans their deep state machine?
Talk about bribery! Haven’t you been paying attention to what Trump and company have been doing lately? Tariff exemptions on electronics and technology imports from China while the small business person selling made in China clothes and toys gets shafted. Special Mar-A-Lago dinner event with Trump for top Trump meme coin buyers.
Some supply shock is baked in already, due to shipping cancellations. That's just for items that need to go by ship.
Anecdotal, for a more tech-intensive sector: Pre-tariff, we ordered from a Chinese supplier some electronics - having switched after being repeatedly let down by US counterparts being unable to keep deadlines. Context: are a MNC subcontractor in the chain ultimately for a big-name US science/tech champion trying to get some next generation capital/research equipment. The Product industry in which PRC is catching up fast. And that US big-name firm itself in last couple years committed to rotate into a "friendly" ASEAN country for key engineering work, because they figure it's the only way they could still compete in the upcoming generation. Result - more trans-Pacific round trips in everything. Result for our electronics order - nevermind the cost increase (which is totally unclear btw), these key intermediate goods now simply held up in US customs amid the confusion.
I think safe to say, can repeat this story thousands of times. If even 10% of these cases attempt to switch to US domestic suppliers, it will instantly swamp the domestic spare capacity (which btw already bid way up due to the little-talked-about quasi wartime production for smart munitions and air defenses).
So ... not sure about persistent stagflation, perhaps that depends on when or if the taps are opened on various forms of stimulus? Must defer to the experts such as the author. But if another 4-6 weeks go by with the White House doing their weekly headfake, then indeed we're looking at a repeat of the Covid experience.
The complementary shock on the other side is one of demand. Seems fundamentally simpler to treat.
Bottlenecks are the mothers of all squeezes.
I think the question at this point is whether there is a deal to be made or not. Trump has shown himself to be ready to change his position on many issues. But, what does President Xi think about this? The danger in playing chicken is nobody swerves. China might be willing to bet that they can hold their society together longer than Trump can hold his tariffs and political coalition together. Professor Roach, as someone with a great deal of on the ground experience in China what are your thoughts on how the Chinese government is planning to play the trade war?
Say what you will but I sure like the idea of the United States’ pharmaceuticals being produced in the U.S. For decades our politicians have been bribed in some way or another and left their constituents hanging in the wind. I hope Trump does well. I find it odd the vitriolic tone so many have about what Trump is attempting to do: help our country. Would people prefer Kamala? Could the U.S. as a republic survived for very much longer under the “leadership” of the (Marxist) democrats, the controlled opposition republicans their deep state machine?
Talk about bribery! Haven’t you been paying attention to what Trump and company have been doing lately? Tariff exemptions on electronics and technology imports from China while the small business person selling made in China clothes and toys gets shafted. Special Mar-A-Lago dinner event with Trump for top Trump meme coin buyers.
Let's stay focused on what the administration is doing, or not doing.
What a theoretical administration would do is neither predictable nor relevant.
As for bribery, how about corporations moved offshore to save money and reward shareholders? Full stop.