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Here is another variable that doesn’t get enough attention.

America demands that China address its massive trade surplus. Ok, but what is it that America exports?

If you look into the official data, officially the largest exports out of America in 2024 are civilian aircraft parts ($123bn) and oil ($118bn).

Not included in the “official data” is the exports of weapon systems. For 2024 that totaled $319bn. Nearly triple the official top two categories. Great article on this provided below.

So, China has said it is open to addressing the trade issue, but America policy won’t be selling weapon systems to China. Moreover, basically everything that China does want to be from America is disallowed under “national security”. Can’t buy Nvidia chips, as example.

https://aje.io/lfiawn

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Discussion

Benjamin Chodroff 8mo ago

USA exports services (FAANG et all) are all blocked by China. I’m not a fan of the way Trump is conducting this “negotiation” but I do think that there are legitimate reasons that the USA needs to make a legitimate change, especially with countries that have no interest in a symbiotic relationship. The debt in the USA is not going to be sustainable especially in the face of Bitcoin, and we should be using suppliers that wish to work with us and our services — my humble opinion, but eager to hear and learn from what others think.

Peter Alexander 8mo ago

Actually agree wholeheartedly with what’s you’ve laid out here. My focus is just on the world as it actually is rather than what one might wish it to be.

I view the steps being taken by the Trump team as being actually correct in terms of the intent. Execution is a whole other issue.

Still, the larger issue is that such action by America needed to be taken on China roughly 15 years ago and didn’t. Now it’s a negotiation where America is fiscally bankrupt and sources virtually everything from China. That boat will take years to turn around.

Thank you though for the comment. We are all here to learn. All of us.

Benjamin Chodroff 8mo ago

Turning this boat around by private markets and policy should have happened 15 years ago when U.S. had much more leverage. I hope cooler heads prevail. The tariffs are blunt and painful, but I’m more worried about acts of aggression that cause me to use the bug-out bag I stocked last weekend. I can tolerate pandemic lockdowns, but kinetic action: nope. I hope I am just paranoid.