Trump threatened last night to impose an additional 50% tariffs unless China removes its retaliatory 34% tariffs by the 8th. China has preemptively announced six retaliatory measures:
1. **Sharply increase tariffs on U.S. agricultural products** (e.g., soybeans, sorghum).
2. **Ban U.S. poultry imports**.
3. **Suspend U.S.-China cooperation on fentanyl regulation**.
4. **Countermeasures in trade-in-services sectors**.
5. **Block imports of American films**.
6. **Investigate U.S. companies’ intellectual property benefits in China**.

This marks a rare instance of China publicly warning of retaliation in advance. Should Trump proceed with the 50% tariffs, China’s countermeasures will escalate further.

**Debunking "Isolation" Fears**
Some online pessimists ("kneel-for-peace" voices) fret that other nations might align with Trump, isolating China. This is baseless:
- China’s 2024 exports totaled **25 trillion RMB** (18.86% of GDP), far below Japan (21.8%), Germany (43.4%), South Korea (44%), Vietnam (87.2%), and the Netherlands (88.5%). Globally, China ranks **159th out of 195 nations** in export dependency, proving its economy is **dominated by domestic consumption**.
- U.S.-bound exports now account for just **2.7% of China’s GDP** (down from 8% during the 2018 trade war). **Conclusion**: China is unafraid of tariff threats—"If you want war, we’ll fight."

**Geopolitical Calculus**
- **Europe’s stance**: Ursula von der Leyen (EU Commission President) recently emphasized Europe’s focus on **non-U.S. trade** (88% of its global trade). Her call with Chinese leaders signals alignment.
- **Spain’s Prime Minister Pedro Sánchez** will urgently visit China, likely to coordinate positions.

**Behind the Scenes: U.S. Political Turmoil**
- Trump’s tariff gambit aims to pressure the Fed to cut rates and lower Treasury yields, even at the cost of market stability. Yet, U.S. Treasury yields **rose unexpectedly** yesterday—reportedly due to **hedge funds dumping bonds** (not China) to de-leverage amid Trump-induced uncertainty.
- **Trump’s self-sabotage**: His moves risk crashing **both stocks and bonds**, while a **$6.5 trillion Treasury debt cliff** looms in June. With global opposition mounting, his agenda may stall entirely.

**China’s Strategy**
By refusing negotiations and letting Trump’s threats backfire, China is betting on his eventual collapse. As one Chinese analyst quipped: *"After all his bluster, Trump will crawl back to Dongda (China) for cooperation."*