Rachel Abrams

So I was surprised that the tariffs were paused on most of the world, but I was not surprised that the tariffs were actually increased on China because we've seen such a ratcheting up of this trade war between these two countries in the last week or so. And China is the only country that has decided to go toe to toe with Donald Trump.

When the Trump administration slapped tariffs on them last week, China returned the volley with the same tariff on the United States. And then when Trump increased it again, China responded with the exact same levy. And now here we are today with a whopping 125% tariff on Chinese goods. And now we're waiting for China's response to that.

When the Trump administration slapped tariffs on them last week, China returned the volley with the same tariff on the United States. And then when Trump increased it again, China responded with the exact same levy. And now here we are today with a whopping 125% tariff on Chinese goods. And now we're waiting for China's response to that.

I think China wants this trade war to end. Its economy has been struggling for a few years now because of a property crisis. They've built too many houses and there aren't enough buyers right now. And so there's been a problem with deflation, with rising debt. And the only thing that's been driving growth in the economy is manufacturing and exports.

I think China wants this trade war to end. Its economy has been struggling for a few years now because of a property crisis. They've built too many houses and there aren't enough buyers right now. And so there's been a problem with deflation, with rising debt. And the only thing that's been driving growth in the economy is manufacturing and exports.

And the biggest single market for China is the United States. About 15% of its exports go to the United States. Now, that's a smaller share than it was a few years ago, but it's still a massive part of China's business model.

And the biggest single market for China is the United States. About 15% of its exports go to the United States. Now, that's a smaller share than it was a few years ago, but it's still a massive part of China's business model.

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.

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.