Trinh Profile picture
Aug 26, 2019 β€’ 12 tweets β€’ 4 min read β€’ Read on X
Good morning 🌧️πŸŒͺ️. A typhoon passed through πŸ‡­πŸ‡°& it's gloomy outside, just like the mood of markets after:
a) JPO said hedgy words "act as approprioate"
b) Carney speech on the dollar & digital $
c) China raising tariffs to 30% from 25% on 75bn
d) Trump raised 300bn tariffs to 15%
Facts of tariffs so far:
a) China imports from the US roughly 120bn & tariffed 110bn so got 10bn left & so to ESCALATE it needs to raise the level as volume limited
b) That happened w/ 75bn raising by 5% so items like US crude went from 25% to 30%
c) US imported ~550bn & so far
Events leading to today:
June '18: πŸ‡ΊπŸ‡Έ25% tariffs on 34b; πŸ‡¨πŸ‡³ retaliates w/ 25% on 34
Aug '18: πŸ‡ΊπŸ‡Έ25% on 16b; πŸ‡¨πŸ‡³ same
Sept '18: πŸ‡ΊπŸ‡Έ10% on 200b that'll be raised to 25% (1 Jan)
πŸ‡¨πŸ‡³ retaliates w/ 5% on 60b
Truce
May '19: πŸ‡ΊπŸ‡Έ raises 10% to 25% on 200b
June '19: πŸ‡¨πŸ‡³ raises 5-25% on 60bn
Not yet tariffed by both sides but WILL starting 1 September 2019, yes this Sunday:
a) πŸ‡ΊπŸ‡Έ tariffs on the remaining (see chart πŸ‘‡πŸ») 300bn by 10% that later exempt 156bn (mostly consumer goods till 15 December)
b) China retaliates w/ raising 5% on existing tariffs of 75bn so +5% πŸ‘‡πŸ»
πŸ‘‡πŸ»:
c) πŸ‡ΊπŸ‡Έ Raising 5% on existing to 250bn to 30% on 1 October 2019.

By 1 October 2019: China tariffs on the US ranging from 10-30% of 110bn of goods & the US got 30% on 250bn of goods & 15% on 300bn of goods (w/ 156bn delayed til 15 Dec)

Basically all of trade b/n US&China πŸ‘‡πŸ»πŸ‘‡πŸ»
d) By 15 December, unless there are efforts to delay tariffs, there will massive front-loading for fear of this happening & guess what?

WE WILL HAVE TARIFFS ON ALMOST ALL OF US CHINA TRADE.

But that never ends there. Watch investment.
70th anniversary of the People's Republic of China led by the CCP is on, wait for it:

1 October 2019, which is the same date that the 25% of 250bn goes to 30% & obvs a month before on 1 September 15% on 144bn (156bn to be applied on 15 December 19.

About that September talk😬..
As a recap: Notice that the "bark" much stronger than "bites" to manage expectations & actions always surprise u w/ lower magnitude but trend is escalation.

Meaning, worst case scenario now new normal & u rejoice when it escalates but less than "bark"πŸ‘ˆπŸ»

As in the 10% to 15% of 144bn of goods on 1 September 19 (15% on 156bn of consumer goods 15 December) & 25% to 30% for 250bn of mostly intermediate goods on 1 October may not be realized, which u'll rejoice but only b/c ur expectations are managed. Don't forget that norms change
Trump: Non-committal in China tariff delay. Told you. He just puts it out there so you price the WORST & then takes a bit away & then when it happens you will think it is GOOD NEWS.

True story. This is what happened since late Jan 2018. SPX futures up 1% vs -1% this morning.
Do you know what happens after every escalation so far for trade-war? Deescalation by both China & the USA (yep, true story), albeit short-term reprieve until it escalates again, kind of like a dance to get to know each other's limit...

Same script still plays to buy timeπŸ‘ˆπŸ»
#Breaking Mofcom's Gao (de-escalating): Trade escalation not good for πŸ‡¨πŸ‡³, πŸ‡ΊπŸ‡Έ; πŸ‡ΊπŸ‡Έ & πŸ‡¨πŸ‡³ in effective contact; πŸ‡¨πŸ‡³won't discriminate against foreign firms; Won't crack down on foreign firms; discussing πŸ‡ΊπŸ‡Έ visits in Sept; πŸ‡¨πŸ‡³ has ample tools to respond but thinks should discuss removal

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More from @Trinhnomics

Aug 1
Guys, let's do it. All things Trump tariffs. Here we go. First, let's talk about the basics. 10% is the floor as in everyone gets that. And these are the economies that get higher than that:
15% (EU, Japan, South Korea and 33 countries: Angola, Botswana, etc.)
18% (Nicaragua)
19% (Cambodia, Indonesia, Malaysia, Pakistan, Philippines, Thailand)
20% (Bangladesh, Sri Lanka, Taiwan, Vietnam)
25% (Brunei, India, Kazakhstan, Moldova, Tunisia)
30% (Algeria, Bosnia and Herzegovina, Libya, South Africa)
35% (Iraq, Serbia)
39% (Switzerland)
40% (Laos, Myanmar)
41% (Syria)
In Asia, it looks like this. Excluding China and Myanmar, Laos, India got the highest - 25% and maybe more.

China is waiting for talks on extension. Right now, it's 10% reciprocal + 20% fentanyl during extension + 25% during Trump 1.0

Southeast Asia gets 20% to 19% except Laos & Myanmar at 40%, Brunei is 25% but energy is exempt so...Image
India original was 26% so 25% seems bad but frankly not too far from the Southeast Asians. That being said, India was aiming closer to 15% as Vietnam got dropped from 46% to 20%.

Anyway, let's talk about details of the White House info.

It goes into effect 7th August. But if you got stuff in ports/front-loading and not yet consumed till 1 October, there are varied rates for them.

Long story short, there is still time to negotiate this down before it goes into effect basically.Image
Read 13 tweets
Jul 30
Trump tariff strikes India at 25% plus Russian oil import punishment. Is it a surprise? Not exactly. I have been thinking for a week what a US India deal look like. And to be honest, I think I saw this coming. I think India can negotiate down from this threat btw. It's not final. But how much lower and what are the costs?
Why is it not a surprise that India is not getting the deal that it is working hard on?

First, let's look at the EU and Japan - they got smacked with 15% tariff & got reprieve for auto (and other sectors) but auto is key at 15%.

So 15% is the best India can get. And it won't get it. Why? Well, it has to offer a lot to Trump to get that and it won't.
Remember that this is just a threat (similar to what Trump did with Japan before they settled on a lower number) and the threat I suppose can be real or not. Irrespective, he cares about it enough to post about it.

Trump has a few agendas that he wants India or Modi's help with.

Ending that Ukraine War is one. And India is not interested in that. It's an emerging country that buys where it can cheapest.

Russian oil is cheapest & so it buys from Russia & Trump wants to starve Russia of oil revenue. India doesn't want to not buy the cheapest oil possible. Besides, Russia is neither a foe nor a friend.

Maybe the West's foe but not India. So on this point, very hard. What are the costs to India? Well, it will have to pay more for its oil if it doesn't buy the cheapest oil.

Trump is adding to that costs - tariff.
Read 6 tweets
Jul 28
India imported 15,000 cars a year. Why? It has 110% tariff on autos. Now, trade negotiations are not going well and it's approaching the WTO on Trump's 25% auto tariff.

But the reason is simple. India exports more than it imports autos. Why? It has pretty high tariff on auto.

What would an India trade deal look like then? Is there going to be one?Image
What's interesting is that the UK and India signed a trade deal that is supposedly a huge game changer.

Let's take a look at it.

Under the agreement, tariffs on imports of internal combustion engine (ICE)Β carsΒ will be slashed to 30-50% in the first year of implementation, but with the benefit limited to a quota of 20,000Β cars.

The tariffs will be reduced gradually, and after 15 years, they will become 10 per cent, with the quota set at 15,000 units. For out-of-quota imports of ICEΒ cars, the duties are reduced to 60-95 per cent in the first year, and further to 45-50 per cent from the tenth year onwards.
So on the surface, it looks like a big deal but the quotas are so tiny that it makes one wonder.

Of course, relative to annual import, quotas are HUGE as it is MORE than annual import.

But why do people care so much about US 25% auto tariff but don't care so much about India's 110% auto tariff?

Well, because the US imports 8m cars EVERY YEAR.

Look at the big deal that is the UK and India trade deal liberalization. There is a limit in quota.

The quota that the US sets for the UK is 100,000. So in other words, the US remains a big deal and one that needs to be negotiated with.
Read 4 tweets
Jul 16
Reading this article with great amusement with tons of comments that are so emotional & not backed by why. And they all seem so surprised on outcome. I have been saying this all along - the pass-through of tariffs are not as you think it will be. Why? Because you need to understand how they work & who has the negotiating power.

First, this statement here: "China’s retaliatory tariffs on American imports, the most sustained and significant of any country, have not had the same effect, with overall income from custom duties only 1.9 per cent higher in May 2025 than the year before."

ft.com/content/82e32f…
I mean, it seems to admire China's retaliation, as in it, that is the great thing to do.

Why didn't China collect more import duties even though it retaliated?

Well, because China is not GROWING its imports. It's exporting its deflation.

So its retaliation doesn't have as much "meat" so to speak. They need to sell more than they need to buy.
"But despite US tariffs hitting levels not seen since the 1930s, the timidity of the global response to Trump has forestalled a retaliatory spiral of the kind that decimated global trade between the first and second world wars."

They are so upset at the world for not retaliating. You can sense that in the usage. But remember, the US is a lot of countries' number 1 export market.

So you are not going to PISS off your #1 customer. It's just that simple. Why? Because a lot of countries just don't want to be powering their GROWTH via GROWING IMPORTS.

So what? Well, you then be captive to your "customer". You can always sell somewhere else.

Remember that India got like TONS OF TARIFFS. No one says much. They just say, well, they just tariff Indians & make it expensive for them to buy. Do they retaliate with the same tariff? No. They can, but why would you match someone's policies.

These are Trump's policies on US IMPORTS. You can also TAX your own imports. Btw, MANY COUNTRIES DO.
Read 5 tweets
Jul 9
Let's talk about India today. I'll be on @CNBCi at 11am HKT to discuss this particular issue.

First, we all know that India is amongst the least trade exposed and least exposed to the US amongst the big traders.

That being said, the US is the MOST lucrative export market and one it MUST grow if it wants to GROW OUTWARD AND UPWARD through trade.

Why? Look at China PPI today - it's is -3.6%YoY. Look at the Chinese yuan. It is not appreciating like crazy versus the USD. So what? China manufacturing is TOO competitive and will COMPETE with India so exporting to China is not a HIGH MARGIN BUSINESS.

That is the same for everyone who is a big trader. China is a competitor. So fierce that even the Chinese government is struggling w/ this onshore deflated PPI situation so you can see why foreign competitors are pissed off.
First, let's zoom in - India's export as a share of GDP is roughly 2.5% of GDP in 2024. As mentioned, 0.8% is exempted now (pharma, electronics etc). But EXEMPTIONS ARE TEMPORARY. Today, we got threats of 200% tariffs on pharma for example.

Anyway, 1.3% of GDP faces 10% tariff now that will go up to 26% by 1 August if not successfully negotiated down.

India is not too exposed by Trump auto and steel but still somewhat.Image
Let's look at top 15 exports to the US.

#1 PHARMA, currently exempted but faces sectoral tariffs of a lot.

Look at what India exports to China - ZERO. Zero pharma. 3bn to the EU and 9bn to the US.

So here, you can see that INDIA NEEDS A DEAL.

You can go through all the sectors. Note something. In phones, the EU is a bigger market than the US. Yes 8bn vs US 7bn.

But the EU is not a country but made up of 27 countries. So the US is the LARGEST market by a long shot.

Look at all the ZEROS for China for top items. Not a good market for India.Image
Read 9 tweets
Jul 8
Good morning,

As promised, here is a thread on Trump trade war and what Asian countries are going to do or shall I say who has more room to give Trump a deal than others.

@Trinhnomics interview at 17 mins. Image
First, let's start with one certainty: Trump tariffs are higher, and they are on sectors (50% steel, 25% alum, 25% auto & more under study), countries (China 20% fentanyl, Canada & Mexico 25% fentanyl w/ USMCA qualified products 0%, and of course 10% reciprocal tariffs on everyone w/ extension ending 1 August for everyone & China 9 August.

Okay, so what?Image
Okay, let me first discuss the below chart that summarizes the impact on Asia and why different economies will have different negotiating priorities with the Trump administration.

First, big picture. Exports to the US as a share of output (GDP) of respective countries.

Vietnam is the most exposed by a long shot to the US. And that explains why Vietnam was most motivated to climb down from that 46% level to 20% now (40% for transshipment - we discuss later).

Exports to the US was 30% of GDP in 2024. Yep, that high. Good news? more than 10% of GDP was already exempted as Vietnam's largest export was electronics, namely phones, and thus that was exempted.

The rest enjoy 10% until 1 August and then 20% tariff. On a sectoral level, Vietnam faces 50% on steel and 25% on auto but as a share of total, not a big deal, even if not good for those sectors.Image
Read 15 tweets

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