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Yahoo
17-04-2025
- Business
- Yahoo
The US–China ‘decoupling' would be a messy divorce
A version of this story appeared in CNN Business' Nightcap newsletter. To get it in your inbox, sign up for free here. Even if the writing has been on the wall for years, breaking up is never easy. China and the US don't often see eye to eye, but for decades, they have broadly agreed that it is better to be trade partners than trade enemies. That alliance is now hanging by a thread. And the real-world collateral damage is already piling up. The presidents of the world's two biggest economies don't appear ready to talk turkey. China indicated Wednesday that it would be open to negotiations only if talks are based on 'respect,' and greater 'consistency and reciprocity' from the Trump administration, a person familiar with the matter told my CNN colleagues. (I, for one, am not holding my breath.) Without some kind of retrenchment, US-China trade is expected to fall by more than 80% — a magnitude 'tantamount to a decoupling,' said Ngozi Okonjo Iweala, the director general of the World Trade Organization, which issued a similarly grim report on global trade Wednesday. (The upshot: Pre-Trump tariffs, global trade was penciled in to grow 2.7% this year. Now, it's expected to shrink 0.2%.) Here's how Trump's trade war is already rippling through the economy: US retail sales climbed 1.4% in March — largely driven by cars and auto parts — as Americans try to get ahead of expected price increases. Boeing, America's top exporter and a major employer, has reportedly been blocked from making deliveries to Chinese airlines. Beijing recently placed export restrictions on seven types of rare earth minerals — vital components for everything from iPhones to electric vehicles that China has a near-monopoly on. Nvidia, the US chipmaking leader, said it would take a $5.5 billion hit after Washington ordered the chipmaker to halt sales to China. Chinese fast-fashion retailer Shein and online marketplace Temu will raise prices next week, according to Reuters. US stocks tumbled on Wednesday — dragged down by Nvidia's China shut-out, the grim forecast from the WTO, and comments from Fed Chair Jerome Powell, who warned of a 'challenging scenario' in which tariffs lead to a triple whammy of weaker economic growth, higher unemployment and faster inflation, all at the same time. 'There isn't a modern experience for how to think about this,' Powell said at an event hosted by the Economic Club of Chicago on Wednesday. You might think the 'Art of the Deal' president would be eager to hash out some kind of pact with China. But if Trump has taught the world anything, it's to expect the unexpected. 'There may be another game plan here,' Ed Yardeni, a veteran investor and president of Yardeni Research, told investor Louis Navellier on his Navellier Market Buzz podcast. 'It's conceivable that he's got no interest in doing a deal with China. It's conceivable that the US has come to the conclusion that China is a geopolitical threat… and what we're trying to do is ruin their economy.' Some new reporting from Bloomberg is lending weight to that theory. According to the news outlet, which cited unnamed sources, the Trump administration is 'preparing to pressure nations to curb trade with China.' One option on the table, Bloomberg said, is essentially a monetary sanction in which the US would ask other nations to impose tariffs on certain countries with close ties to China. Whether a trade deal is the goal or not, 'it's not a pretty thing to watch,' Yardeni said. 'He is trying to use America's economic power to bully other countries… But it's going to be real hard to bully China.' As many observers have noted, China may be in a stronger position to withstand a tit-for-tat trade war, in part because it maintains an authoritarian grip on every facet of its economy. But perhaps more importantly, Beijing has learned from its first go-round with Trump in 2017. The country is already going beyond the tit-for-tat measures that characterized the earlier trade feud. China's halt on Boeing deliveries and its restrictions on rare-earth exports show that the country 'has learned how to weaponize its imports in a new way,' Mary E. Lovely, a senior fellow at the Peterson Institute for International Economics, said in an interview. 'China still wants to look like a respectable stakeholder' to trading partners like Australia, the EU and Southeast Asia, where President Xi Jinping visited this week, Lovely notes. 'They want to say, 'The door is open. We're reasonable, we're just combating US aggression.' And they are doing it now with a much bigger set of tools.' Sign in to access your portfolio
CNN
16-04-2025
- Business
- CNN
The US-China ‘decoupling' would be a messy divorce
Even if the writing has been on the wall for years, breaking up is never easy. China and the US don't often see eye to eye, but for decades, they have broadly agreed that it is better to be trade partners than trade enemies. That alliance is now hanging by a thread. And the real-world collateral damage is already piling up. The presidents of the world's two biggest economies don't appear ready to talk turkey. China indicated Wednesday that it would be open to negotiations only if talks are based on 'respect,' and greater 'consistency and reciprocity' from the Trump administration, a person familiar with the matter told my CNN colleagues. (I, for one, am not holding my breath.) Without some kind of retrenchment, US-China trade is expected to fall by more than 80% — a magnitude 'tantamount to a decoupling,' said Ngozi Okonjo Iweala, the director general of the World Trade Organization, which issued a similarly grim report on global trade Wednesday. (The upshot: Pre-Trump tariffs, global trade was penciled in to grow 2.7% this year. Now, it's expected to shrink 0.2%.) Here's how Trump's trade war is already rippling through the economy: US retail sales climbed 1.4% in March — largely driven by cars and auto parts — as Americans try to get ahead of expected price increases. Boeing, America's top exporter and a major employer, has reportedly been blocked from making deliveries to Chinese airlines. Beijing recently placed export restrictions on seven types of rare earth minerals — vital components for everything from iPhones to electric vehicles that China has a near-monopoly on. Nvidia, the US chipmaking leader, said it would take a $5.5 billion hit after Washington ordered the chipmaker to halt sales to China. Chinese fast-fashion retailer Shein and online marketplace Temu will raise prices next week, according to Reuters. US stocks tumbled on Wednesday — dragged down by Nvidia's China shut-out, the grim forecast from the WTO, and comments from Fed Chair Jerome Powell, who warned of a 'challenging scenario' in which tariffs lead to a triple whammy of weaker economic growth, higher unemployment and faster inflation, all at the same time. 'There isn't a modern experience for how to think about this,' Powell said at an event hosted by the Economic Club of Chicago on Wednesday. You might think the 'Art of the Deal' president would be eager to hash out some kind of pact with China. But if Trump has taught the world anything, it's to expect the unexpected. 'There may be another game plan here,' Ed Yardeni, a veteran investor and president of Yardeni Research, told investor Louis Navellier on a podcast this week. 'It's conceivable that he's got no interest in doing a deal with China. It's conceivable that the US has come to the conclusion that China is a geopolitical threat… and what we're trying to do is ruin their economy.' Some new reporting from Bloomberg is lending weight to that theory. According to the news outlet, which cited unnamed sources, the Trump administration is 'preparing to pressure nations to curb trade with China.' One option on the table, Bloomberg said, is essentially a monetary sanction in which the US would ask other nations to impose tariffs on certain countries with close ties to China. Whether a trade deal is the goal or not, 'it's not a pretty thing to watch,' Yardeni said. 'He is trying to use America's economic power to bully other countries… But it's going to be real hard to bully China.' As many observers have noted, China may be in a stronger position to withstand a tit-for-tat trade war, in part because it maintains an authoritarian grip on every facet of its economy. But perhaps more importantly, Beijing has learned from its first go-round with Trump in 2017. The country is already going beyond the tit-for-tat measures that characterized the earlier trade feud. China's halt on Boeing deliveries and its restrictions on rare-earth exports show that the country 'has learned how to weaponize its imports in a new way,' Mary E. Lovely, a senior fellow at the Peterson Institute for International Economics, said in an interview. 'China still wants to look like a respectable stakeholder' to trading partners like Australia, the EU and Southeast Asia, where President Xi Jinping visited this week, Lovely notes. 'They want to say, 'The door is open. We're reasonable, we're just combating US aggression.' And they are doing it now with a much bigger set of tools.'
CNN
16-04-2025
- Business
- CNN
The US-China ‘decoupling' would be a messy divorce
Even if the writing has been on the wall for years, breaking up is never easy. China and the US don't often see eye to eye, but for decades, they have broadly agreed that it is better to be trade partners than trade enemies. That alliance is now hanging by a thread. And the real-world collateral damage is already piling up. The presidents of the world's two biggest economies don't appear ready to talk turkey. China indicated Wednesday that it would be open to negotiations only if talks are based on 'respect,' and greater 'consistency and reciprocity' from the Trump administration, a person familiar with the matter told my CNN colleagues. (I, for one, am not holding my breath.) Without some kind of retrenchment, US-China trade is expected to fall by more than 80% — a magnitude 'tantamount to a decoupling,' said Ngozi Okonjo Iweala, the director general of the World Trade Organization, which issued a similarly grim report on global trade Wednesday. (The upshot: Pre-Trump tariffs, global trade was penciled in to grow 2.7% this year. Now, it's expected to shrink 0.2%.) Here's how Trump's trade war is already rippling through the economy: US retail sales climbed 1.4% in March — largely driven by cars and auto parts — as Americans try to get ahead of expected price increases. Boeing, America's top exporter and a major employer, has reportedly been blocked from making deliveries to Chinese airlines. Beijing recently placed export restrictions on seven types of rare earth minerals — vital components for everything from iPhones to electric vehicles that China has a near-monopoly on. Nvidia, the US chipmaking leader, said it would take a $5.5 billion hit after Washington ordered the chipmaker to halt sales to China. Chinese fast-fashion retailer Shein and online marketplace Temu will raise prices next week, according to Reuters. US stocks tumbled on Wednesday — dragged down by Nvidia's China shut-out, the grim forecast from the WTO, and comments from Fed Chair Jerome Powell, who warned of a 'challenging scenario' in which tariffs lead to a triple whammy of weaker economic growth, higher unemployment and faster inflation, all at the same time. 'There isn't a modern experience for how to think about this,' Powell said at an event hosted by the Economic Club of Chicago on Wednesday. You might think the 'Art of the Deal' president would be eager to hash out some kind of pact with China. But if Trump has taught the world anything, it's to expect the unexpected. 'There may be another game plan here,' Ed Yardeni, a veteran investor and president of Yardeni Research, told investor Louis Navellier on a podcast this week. 'It's conceivable that he's got no interest in doing a deal with China. It's conceivable that the US has come to the conclusion that China is a geopolitical threat… and what we're trying to do is ruin their economy.' Some new reporting from Bloomberg is lending weight to that theory. According to the news outlet, which cited unnamed sources, the Trump administration is 'preparing to pressure nations to curb trade with China.' One option on the table, Bloomberg said, is essentially a monetary sanction in which the US would ask other nations to impose tariffs on certain countries with close ties to China. Whether a trade deal is the goal or not, 'it's not a pretty thing to watch,' Yardeni said. 'He is trying to use America's economic power to bully other countries… But it's going to be real hard to bully China.' As many observers have noted, China may be in a stronger position to withstand a tit-for-tat trade war, in part because it maintains an authoritarian grip on every facet of its economy. But perhaps more importantly, Beijing has learned from its first go-round with Trump in 2017. The country is already going beyond the tit-for-tat measures that characterized the earlier trade feud. China's halt on Boeing deliveries and its restrictions on rare-earth exports show that the country 'has learned how to weaponize its imports in a new way,' Mary E. Lovely, a senior fellow at the Peterson Institute for International Economics, said in an interview. 'China still wants to look like a respectable stakeholder' to trading partners like Australia, the EU and Southeast Asia, where President Xi Jinping visited this week, Lovely notes. 'They want to say, 'The door is open. We're reasonable, we're just combating US aggression.' And they are doing it now with a much bigger set of tools.'
CNN
16-04-2025
- Business
- CNN
The US-China ‘decoupling' would be a messy divorce
Even if the writing has been on the wall for years, breaking up is never easy. China and the US don't often see eye to eye, but for decades, they have broadly agreed that it is better to be trade partners than trade enemies. That alliance is now hanging by a thread. And the real-world collateral damage is already piling up. The presidents of the world's two biggest economies don't appear ready to talk turkey. China indicated Wednesday that it would be open to negotiations only if talks are based on 'respect,' and greater 'consistency and reciprocity' from the Trump administration, a person familiar with the matter told my CNN colleagues. (I, for one, am not holding my breath.) Without some kind of retrenchment, US-China trade is expected to fall by more than 80% — a magnitude 'tantamount to a decoupling,' said Ngozi Okonjo Iweala, the director general of the World Trade Organization, which issued a similarly grim report on global trade Wednesday. (The upshot: Pre-Trump tariffs, global trade was penciled in to grow 2.7% this year. Now, it's expected to shrink 0.2%.) Here's how Trump's trade war is already rippling through the economy: US retail sales climbed 1.4% in March — largely driven by cars and auto parts — as Americans try to get ahead of expected price increases. Boeing, America's top exporter and a major employer, has reportedly been blocked from making deliveries to Chinese airlines. Beijing recently placed export restrictions on seven types of rare earth minerals — vital components for everything from iPhones to electric vehicles that China has a near-monopoly on. Nvidia, the US chipmaking leader, said it would take a $5.5 billion hit after Washington ordered the chipmaker to halt sales to China. Chinese fast-fashion retailer Shein and online marketplace Temu will raise prices next week, according to Reuters. US stocks tumbled on Wednesday — dragged down by Nvidia's China shut-out, the grim forecast from the WTO, and comments from Fed Chair Jerome Powell, who warned of a 'challenging scenario' in which tariffs lead to a triple whammy of weaker economic growth, higher unemployment and faster inflation, all at the same time. 'There isn't a modern experience for how to think about this,' Powell said at an event hosted by the Economic Club of Chicago on Wednesday. You might think the 'Art of the Deal' president would be eager to hash out some kind of pact with China. But if Trump has taught the world anything, it's to expect the unexpected. 'There may be another game plan here,' Ed Yardeni, a veteran investor and president of Yardeni Research, told investor Louis Navellier on a podcast this week. 'It's conceivable that he's got no interest in doing a deal with China. It's conceivable that the US has come to the conclusion that China is a geopolitical threat… and what we're trying to do is ruin their economy.' Some new reporting from Bloomberg is lending weight to that theory. According to the news outlet, which cited unnamed sources, the Trump administration is 'preparing to pressure nations to curb trade with China.' One option on the table, Bloomberg said, is essentially a monetary sanction in which the US would ask other nations to impose tariffs on certain countries with close ties to China. Whether a trade deal is the goal or not, 'it's not a pretty thing to watch,' Yardeni said. 'He is trying to use America's economic power to bully other countries… But it's going to be real hard to bully China.' As many observers have noted, China may be in a stronger position to withstand a tit-for-tat trade war, in part because it maintains an authoritarian grip on every facet of its economy. But perhaps more importantly, Beijing has learned from its first go-round with Trump in 2017. The country is already going beyond the tit-for-tat measures that characterized the earlier trade feud. China's halt on Boeing deliveries and its restrictions on rare-earth exports show that the country 'has learned how to weaponize its imports in a new way,' Mary E. Lovely, a senior fellow at the Peterson Institute for International Economics, said in an interview. 'China still wants to look like a respectable stakeholder' to trading partners like Australia, the EU and Southeast Asia, where President Xi Jinping visited this week, Lovely notes. 'They want to say, 'The door is open. We're reasonable, we're just combating US aggression.' And they are doing it now with a much bigger set of tools.'
Yahoo
06-03-2025
- Politics
- Yahoo
DeSantis warns Byron Donalds about missing votes. He missed plenty in 2018.
With a few strokes of a keyboard, President Donald Trump upended Florida politics. Early in the gubernatorial cycle, he endorsed a young and relatively obscure congressman, tilting the race in his favor. The candidate turned to campaigning almost immediately, raising money and missing a few votes in Congress while he tended to his political ambitions. The year was 2018. The candidate was Ron DeSantis. If any of that sounds familiar, that's because history seems to be repeating itself. Last week, the Trump-endorsed U.S. Rep. Byron Donalds announced he would run for governor. The 46-year-old Naples-area representative — that's young in politics — has already begun courting major Republican fundraisers. He'll start campaigning in earnest in the coming months. It's not hard to find parallels between DeSantis and Donalds at this stage in their careers. Pre-Trump endorsement, both men were relatively unknown third-term U.S. representatives. Like DeSantis in 2018, Donalds won Trump's endorsement by emerging as one of his most vocal surrogates in the media. But DeSantis doesn't seem to be reveling in the similarities. Instead of backing Trump's pick for governor, he appears to be looking to play kingmaker — or queenmaker — himself. His preferred 2026 candidate appears to be his wife, Casey. Donalds? DeSantis says he should stick to his day job. 'Donald Trump just got into office. I want these congressmen focused on enacting his agenda. They haven't done very much yet,' DeSantis said at a Tampa news conference last week. 'We have such a narrow majority that to be trying to campaign other places and missing these votes I think is not something that's advisable at all." DeSantis may be speaking from experience. During key months of his first gubernatorial run in 2018, he missed dozens of congressional votes. From July to September of that year, he was in the 98th percentile of all U.S. representatives in terms of missing votes, according to the nonprofit GovTrack. That means he was one of the most absent lawmakers in Washington during that stretch. (DeSantis resigned from Congress in September 2018.) Max Goodman, a longtime Florida Republican political consultant, said missing votes while running for higher office is natural. 'Find me one congressman running for statewide or national office who doesn't miss some votes!' he wrote in a text message. The situation in Washington during DeSantis' first gubernatorial campaign is different from the environment today. During DeSantis' last term, Republicans held 235 seats to Democrats' 193 — a healthy majority. Today, they have just a four-seat advantage. As DeSantis noted, Donalds' vote matters quite a bit. In February, Donalds made news for missing two votes he cast at the same time as an appearance on the political program Real Time with Bill Maher. According to Punchbowl News, Donalds potentially violated ethics rules by casting his votes from nearly 2,700 miles away. Still, the governor's criticism of Donalds is striking given the similarities between the two Trump proteges. DeSantis has said Donalds should not put his political ambitions ahead of his office, but DeSantis launched a run for president less than a year after Floridians elected him to a second term as governor. Politically, the most important thing the two men have in common is Trump's approval. Like DeSantis was in early 2018, Donalds is fairly unknown to the Florida electorate. A February poll by the University of North Florida's Public Opinion Research Lab found that two in three voters have never heard of Donalds. Trump's endorsement is likely to change that for Donalds — just as it did for DeSantis. But DeSantis appears to be hoping that Trump's early endorsement won't decide the 2026 governor's race. In an X post Tuesday, the governor noted that Casey DeSantis recently played a round of golf with Trump. 'Casey and @realDonaldTrump had no trouble winning the match…" DeSantis posted to X.
