Rachel Abrams

Exactly. They're going to have to find new markets, and there just isn't enough out there to absorb all these things that China usually sells to the United States. Exactly.

National pride and political legitimacy is on the line for China's leader, Xi Jinping. He is not going to come to the negotiation table under duress. He wants China to be treated like an equal to the United States. He's built up an image of himself as a strong man in China, someone who's responsible for rejuvenating China's sort of greatness. And so he cannot afford to look weak at all.

National pride and political legitimacy is on the line for China's leader, Xi Jinping. He is not going to come to the negotiation table under duress. He wants China to be treated like an equal to the United States. He's built up an image of himself as a strong man in China, someone who's responsible for rejuvenating China's sort of greatness. And so he cannot afford to look weak at all.

The legitimacy of his rule of the Communist Party rests on him being able to stand up to the United States.

The legitimacy of his rule of the Communist Party rests on him being able to stand up to the United States.

So China, of course, still has other levers that it can pull to inflict some pain on the United States. There are still many big American companies that are invested in the Chinese market. It's something that American businesses have drooled over for decades. And they can go after those companies. It can also go after Hollywood. It could block more films coming into China.

So China, of course, still has other levers that it can pull to inflict some pain on the United States. There are still many big American companies that are invested in the Chinese market. It's something that American businesses have drooled over for decades. And they can go after those companies. It can also go after Hollywood. It could block more films coming into China.

It could then also target some of the states that produce agricultural commodities that China imports from the United States. Those are generally states that voted heavily for Donald Trump. It could also decide not to allow a sale of TikTok, which has been a front burner issue for President Trump.

It could then also target some of the states that produce agricultural commodities that China imports from the United States. Those are generally states that voted heavily for Donald Trump. It could also decide not to allow a sale of TikTok, which has been a front burner issue for President Trump.

Lastly, and this is the most risky of the options, it could also devalue its currency to make its exports more competitive in the global marketplace. The problem with that, though, is it would raise tensions with other countries that are worried about Chinese overcapacity and having too many Chinese cheap goods flood their country.

Lastly, and this is the most risky of the options, it could also devalue its currency to make its exports more competitive in the global marketplace. The problem with that, though, is it would raise tensions with other countries that are worried about Chinese overcapacity and having too many Chinese cheap goods flood their country.

Well, from the United States, American consumers are just going to see prices go up. They're going to order things from Amazon and be shocked by what they're paying for whatever you're ordering from China, which is a lot of things. From the Chinese side... this is going to make a bad economic situation even worse.

Well, from the United States, American consumers are just going to see prices go up. They're going to order things from Amazon and be shocked by what they're paying for whatever you're ordering from China, which is a lot of things. From the Chinese side... this is going to make a bad economic situation even worse.

That means higher unemployment, that means factories going idle, that means goods that are just sitting in warehouses and not being able to offload it onto other countries. But ironically, in the long run, this could actually help China. It could actually accelerate the one thing they really, really need, which is to reform their economy away from exports. They can't be this one trick pony.

That means higher unemployment, that means factories going idle, that means goods that are just sitting in warehouses and not being able to offload it onto other countries. But ironically, in the long run, this could actually help China. It could actually accelerate the one thing they really, really need, which is to reform their economy away from exports. They can't be this one trick pony.

They have to find a way to get... more people in China to consume things kind of like Americans so that their economy is on a more sustainable footing. And the problem is the government knows this, but to make that reform requires painful changes that have been really slow and hard to make so far.

They have to find a way to get... more people in China to consume things kind of like Americans so that their economy is on a more sustainable footing. And the problem is the government knows this, but to make that reform requires painful changes that have been really slow and hard to make so far.

Yeah, that's true, except economists have been telling China that it needs to reform its economy for years, whereas economists in the United States are very skeptical about President Trump's plan and how it would bring manufacturing back to the United States.

Yeah, that's true, except economists have been telling China that it needs to reform its economy for years, whereas economists in the United States are very skeptical about President Trump's plan and how it would bring manufacturing back to the United States.

In the meantime, China would definitely prefer status quo because then it could work on reforming its economy without facing the pressure of a trade war.