Trade War

So as of this writing, the USA and China are engaged in a tit-for-tat trade war. 

Thus far, the USA has imposed an additional 145% tariffs on Chinese made products.  And China, in response, has imposed their own 125% tariffs on USA made products.  It feels like we are going towards an inevitable decoupling of both economies, which will have severe consequences.

Both Trump and Xi are proud and don’t want to back down for fear of losing face and looking weak.  So, right now, as my friend put it, it’s a chest-beating competition out there.

As a Chinese American, it feels strange and a little bit sad to see these two countries going at it.  It’s a conflicting feeling and one where I wish that both sides can cool the temperature down and sit down to negotiate a bilateral trade deal that is beneficial for both parties.

I would say that the USA wants China to lower its trade deficit and perhaps wants to protect its companies that are doing business in the region.  They also don’t want China to devalue their currency nor to force technology transfers from US companies.  China wants lower tariffs to improve its export-dependent economy and to be seen as an equal partner in the global order with the USA. 

I’d say that there are still many complex details that need to be worked out on both sides.  And I just hope that both parties come to better terms with each other. 

Because in a trade war, it unfortunately feels like a zero-sum game, where there has to be a winner and a loser.  Inevitably though, both sides will suffer from economic turmoil.  The USA itself is already bracing for higher prices and slower growth, which will lead to stagflation and potentially recession.  China, themselves, are not doing too well neither and have a dampened property market as well as increased pressure to sell off their goods to other countries outside of the USA.

Unfortunately, it still feels like a lot of games in this world are seen as zero-sum.  It is simply easier to play these games.  It is much harder to come to the table to negotiate win-win solutions. 

Ways to achieve win-win perspective is to see your problem from different angles and to figure out how best to achieve your goals while giving away small wins to the other party – wins that may be of little benefit to yourself but tremendous for the other side. 

I, myself, don’t have a one-stop-shop solution to this problem.  After all, the USA and China have had ideological differences for decades on end now, and it’s not easy to just put all these frustrations to an end through one simple deal. 

Also, there’s the fact that some form of USA constituents will get hurt no matter what the government does or doesn’t do.  There’s always going to be some group out there that draws the short straw and thus is not satisfied with the current state of matters.  Right now though, it feels like many groups have been given the short straw.

It’s a sensitive geopolitical game and I feel like it’s not going to end anytime soon.  As an owner of a small family business that deals with the import of goods from China, I am obviously not stoked about this sudden increase in tariffs.  It makes it much harder for my business to thrive in the USA market and forces me to focus more time and energy on international markets outside of the USA. 

It gives me a lot of headaches and a lot of mental turmoil to simply think about how to deal with these tariffs and whether or not they will be further raised in the future.  The uncertainty is worse than the actual tariffs themselves.

I, however, don’t want to fall into the trap of hating any party because of what they did.  Because that type of hate will be toxic and inevitably boomerangs back to myself.  There are other more healthy ways to mentally deal with these types of hard times.

One way is to write it out (which is what I’m doing right now) or to speak with a close friend or family member.  You can also choose humor and laugh at the problem.  For example, there was a popular story a few days ago about the government accidentally taxing an island that was only inhabited by penguins!  They really have it in for so many species beyond the human race!

Either way, I really don’t want to hate the government because it’s a downward spiral from there.  I just want to detox from the news sometimes and see what else is out there.  Spend more time with my friends and family, continue to practice self-care, and continue to practice gratitude for the small things in life.

There are so many coping strategies that I can harness.  And if I need more ideas, all I have to do is ask ChatGPT!  So yes, it’s quite a chaotic time that we live in right now and I’m bracing for economic consequences because of it. 

However, I hope that there is a win-win solution for both parties down the horizon and I hope that they come to the negotiating table sooner rather than later.  From my own side, I’ll do my best to continue to practice love, compassion, humility, and all the other healthy things in between.  I will continue to be grateful for all that has been given to me, and I will continue to nourish the relationships that I hold dear in my life.