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The US–China trade war is "a game of chicken, but the chickens are not equally sized," Tamarack Advisory managing partner James Early tells Julie Hyman and Madison Mills on Morning Brief. Early explains that while the trade war hurts China more than the US, China is more prepared for the blowbacks than the US.
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China hitting back at President Trump's latest tariff plan with Beijing officials announcing it'll impose 34% levies on all US imports, along with export controls on rare earth elements crucial for semiconductors and EVs. Our next guest says China's move marks the end of an era for global trade. Joining us, we've got James Early, Tamarack Advisory's Managing Partner. James, always great to speak with you. I know you have significant experience in Asia. Talk to me about how much leverage the United States has in these negotiations, and did the US just overplay its hand here?
Well, first of all, Madison, it's great to be here, but I feel like I'm living in a movie the past couple days. It's just it's just beyond reality, but it is reality. In terms of leverage, this is definitely a game of chicken, but the chickens are not equally sized. I mean, the US exports roughly 140 billion dollars of stuff to China every year, and China exports roughly 440 billion dollars. So, this trade war certainly hurts China more than it hurts the US, but at the same time, the Chinese populace and Chinese companies are more equipped to take that pain.
Well, and and Trump sort of seemed to allude to this in his latest post on Truth Social this morning. He says, "China played it wrong, they panicked, the one thing they cannot afford to do." So then what's the next move? Or does he sort of sit back and, to your point, let them sort of incur the the pain that you're talking about?
Well, I mean, the irony here is that this is an economic war, but it's really much more about domestic optics on both sides. In both cases, China and the US, the leadership wants to look tough to the people. Like China basically had had to react like this. So, my answer would, nobody knows, but but it's going to come down to how the politics shake out. I would not be surprised to see this thing off just as quickly as it was on in in a couple of weeks, even a couple of days, or maybe a couple months, who knows, right? Maybe maybe we get a deal for TikTok and Trump is appeased. It could be some little trigger just like that. Uh, but for now, it's not looking that way. For now, it's looking like China is opening the door to basically every other company affected by tariffs, which is basically every country, excuse me, affected by tariffs, which is basically every country to retaliate in some shape, form, or fashion.
