This Is How Much US Trade with China Has Fallen
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Well, I'm a little concerned we're all going to be out of a job if the CCP collapses because of tariffs. You know, it's one of those things. There was this long-rumored urban myth about Chinese parables, you know, may you live in interesting times. You know, I don't think that's a true Chinese parable, but it seems to hold rather true at the moment.

Oh, yeah, that was a that was a purported Chinese curse, right? You live in interesting times. Well, we definitely live in interesting times. It seems like there is never any shortage of things to pay attention to if you're interested in China these days. Oh, yeah. Well, I just want to I want to get this question out there. This this was a question Matt wrote late at night when he was tired. And I think it's it's a thing of beauty. So you're going to read it verbatim. I'm going to read it verbatim.

Are you ready, Christopher? I'm sitting down. All right. President Trump has been adding tariffs like it's spring break and tequila shots are free. What's going on?

I think that is that President Trump is a long, everything I've heard is that he's actually a teetotaler. So maybe he gave some imported tequila or domestically produced bourbon that's not going to Canada over to his staff and they're just hitting tariff, tariff, tariff over and over again. Look, we can basically only speculate as to what their strategy is. To me, there's definitely a method to the madness.

And I think it's this. Just to start off with, trade talks, even bilateral trade talks between two countries, if they're going to reach a trade agreement or whatever, can literally take 5, 10, 20 years.

The WTO round that has been going on since really the formation of the WTO officially kicked off shortly after the WTO was founded, a few years after the WTO was officially founded in 2000. And we're now 2025, and there's been no new trade agreement. So I think one of the issues is the president is trying to do this to basically sharpen minds and bring some urgency to the issues.

And I think part of this is that they learn from their first their first term And if you go back and look at the first term and i'm going to be off, you know Probably I don't know six months or something like that um, I think president trump first tariffed china in 2018 if I remember correctly and then there was some type of trade agreement with china reached in

And I believe it was 2019, sometime in the middle of 2019. And then basically he lost the election in 2020. And so basically, I think part of what we're seeing is that they said, we're not going to put ourselves under that time constraint. So from day one almost.

We're going to put this on a rocket ship. OK, so I think that's part of what's driving it. So then the next logical question is, wait a minute, why are we why are we tariffing other places, other places and other countries if the focus is is China? And I think I think there's I think there's multiple I think there's multiple issues there.

Number one, what you see, and you see this most directly in places like Mexico and Vietnam, I think, and I'd have to go back and run the exact numbers where they stand now, but US trade with China since 2018 when Trump first started implementing tariffs has fallen by, I believe, about 50%. Rough number. It's down about 50% from its high.

But one thing that happened was is that as Chinese trade with direct Chinese trade with the US fell significantly, a lot of those US imports got directed to Mexico and Vietnam. Part of that is good. Part of that is good, okay? Because some of that trade that's going to Vietnam is not really going to come back to the United States for many reasons, okay?

But what happened at the same time? Chinese exports to Mexico and Vietnam rose substantially. The concern in the Trump administration, and this has been widely debated among economists, policymakers, think tanks in the US, is what percentage of that

Trade now between the US and Vietnam US and Mexico is actually let's let's call it pure US Mexico US Vietnam trade and how much of that is what we would call transshipment and Transshipment is kind of a little bit of a range. The simplest example is something gets made in China exported exported in quote marks to Vietnam overnight

get stamped, made in Vietnam, and then shipped back, and then shipped to the US to avoid the tariffs. One of the things that the Trump administration is quite clearly trying to do is to reduce that type of trade.

So why, uh, why other, uh, why other, uh, countries, um, Europe, for instance, Japan, um, et cetera. Um, and I do think, um, it's going to be a little bit individualist as to what specifically the Trump administration is looking for. Sometimes it's security issues. Sometimes it's their relationship, uh, with China. Um, sometimes, uh, sometimes it will be just economic issues. Um,

But there absolutely are a range of issues, and a lot of them have to do with China, about how those countries are behaving. And the reality is implementing tariffs gives you significant leverage to say, we need to negotiate these issues. It is effectively the diplomatic version of sticking a gun to someone's head and saying, look, we're going to talk about this, whether you like it or not.

But without that leverage, you know, a lot of countries would simply not, you know, seriously engage in negotiations on a variety of issues.