I'm half Indian and I find that hilarious because it's so true. In the poorer villages it's more like 5 on one bike, though


It's going to involve serious pain on both sides of the Pacific. My worry is twofold. First, for the millions of American jobs, in both service and manufacturing, that depend on access to affordable pre-consumer components, whether from China or elsewhere. My second worry is that historically, trade wars have often led to real ones. If a prolonged US-China trade war causes Xi Jinping to feel significant domestic pressure from the massive job losses that will follow a significant decline in export manufacturing, his next logical step to maintain legitimacy and distract the Chinese public from the economic issues, may quite plausibly be an invasion of Taiwan, and then all bets are off.

I'm very much in support of smart industrial policies, to bolster and even protect, key strategic domestic industries. That sometimes includes tariffs. It should also include targeted investments, in fields that are essential to economic growth, like supercomputers, silicon chips, AI, renewable energy, and so on and so forth. Successful industrial policies include both carrots and sticks. Carrots are government investments, tax credits, and so forth -- like the CHIPS act, which was a rare act of bipartisan common sense that will help us maintain the technological momentum we sorely need.

And yes, sticks can be in the form of tariffs. They are proper responses to clear evidence of dumping (ie Chinese steel) and can also be used strategically to protect domestic industries (if we allowed Chinese electric car manufacturers like BYD to enter the US market, they would quickly dominate -- like they are starting to do across Asia.)

To be sure, there are plenty of unfair trade practices in place across the globe, many of which disadvantage the US. And there should be a disciplined, rational effort to improve market access for US products, and stimulate the development of domestic industries -- like we've historically done in aerospace, digital technology, pharmaceuticals, and many other industries too numerous to name.

But the current whiplash of absolutely bonkers trade policies (grounded in the absolutely false assumption that manufacturing trade deficits are always evidence of 'cheating') is horrendous news for US businesses that either manufacture products for export, or import precursor materials for domestic production. Many of these are small businesses that cannot absorb these rapid cost increases. Unless these ludicrous tariffs are dramatically scaled back, and quickly, this country will face a ****storm of declining demand, declining investment earnings, and rising unemployment that will make 2008 and 2020 seem like wonderful times to have been alive.

(Right after posting this, I saw SWA CEO Bob Jordan's comments. See below.)

"A recession isn’t coming after all — it’s already here, according to at least one airline CEO.

Southwest Airlines (LUV) CEO Bob Jordan told Bloomberg that demand has cratered in recent months, with domestic leisure travel dropping more than he’s ever seen besides the Covid-19 pandemic. The executive expects Southwest’s second-quarter revenue to fall by six percentage points after it declined by three points in the first quarter.

“I don’t care if you call it a recession or not, in this industry that’s a recession,” the CEO told Bloomberg."