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Remember what i told you a decade or so ago,
They have the smartest(0,01%) and the dumbest(90 %) people on earth.
Btw bro,we know each other for almost 14 years now.
There is likely a deeper method to the "NYC real estate salesman" madness ( not being good for larger economics if things stay as is).
Reality will apply its own counterforce and there is negotiation room that will be interesting to see play out.
I mean if India basically manages to pare down its rate (further) and create a real differential with Chinese one it can reshore a ton of capital from China over next few years (similar to how Vietnam did so in trump first term - and I'm sure Vietnam will also negotiate with Trump team just like EU and Japan will do so etc). Then carveouts past that too (right now goods wise they are just pharma and electronics).
I mean US tariffs on Chinese will add up to 54% on everything and could increase even more as Chinese just announced 34% on all US stuff instead of trying negotiating first till april 10 heh..... and then the time line for everyone a cpl more months etc as costs on what actually is very inelastic in US demand compared to what it can do internally.
So that is already significant 28% cost difference between India and China if things stay as is (when they could reduce further in India case and increase the difference even more).
Basically the section 4C stuff will be interesting feedback loop, this is where reality will impose and make a proper strategy over time and China gets stuck with whatever it wants to get stuck with (it has done a ton of IP theft, there is downside now from that w.r.t more capital transfer to other countries):
India is likely to negotiate under section 4 C of the executive order. Section 4 B has penalties for retaliation while section 4C permits reduction of tariffs on economic and national security matters.
Section 4C of Trump’s executive order stated, “Should any trading partner take significant steps to remedy non-reciprocal trade arrangements and align sufficiently with the United States on economic and national security matters, I may further modify the HTSUS to decrease or limit in scope the duties imposed under this order.”
