To illustrate just how nonsensically these tariffs were calculated, take the example of Lesotho, one of the poorest countries in Africa with just $2.4 billion in annual GDP, which is being struck with a 50% tariff rate under the Trump plan, the highest rate among all countries on the list.

Why? Does Lesotho apply extortionate tariffs on U.S. products and the U.S. is merely being "reciprocal" here? Not at all, despite what Trump is saying, it's NOT the way these tariffs are defined.

As a matter of fact Lesotho, as a member of the Southern African Customs Union (SACU), applies the common external tariff structure established by this regional trade bloc.

Which means it applies the same tariffs on U.S. products as South Africa does, as well as the 3 other members of the bloc: Namibia, Eswatini and Botswana.

So since the tariffs charged by these 5 countries on U.S. products are exactly the same, they must all be struck with a 50% tariff rate by the U.S., right? Not at all: South Africa is getting 30%, Namibia 21%, Botswana 37% and Eswatini just 10%, the lowest rate possible among all countries.

So what gives? Again, the way these tariffs are calculated has absolutely zero relationship with actual tariffs imposed by these countries on U.S. products. Instead, they appear to be simply derived from trade deficit calculations.

Looking at Lesotho specifically, every year the U.S. imports approximately $236 million in goods from Lesotho (primarily diamonds, textiles and apparel) while exporting only about $7 million worth of goods to Lesotho (wits.worldbank.org/CountryProfile…).

Why do they export so little? Again this is an extremely poor country where 56.2% of the population lives with less than $3.65 a day (databankfiles.worldbank.org/public/ddpext_…), i.e. $1,300 a year. They simply can't afford U.S. products, no-one is going to buy an iPhone or a Tesla on that sort of income...

The way the tariffs are ACTUALLY calculated appears to be based on a simplistic and economically senseless formula: you take the trade deficit the U.S. has with a country, divide it by that country's exports to the U.S and declare this - falsely - "the tariff they charge on the U.S."

And then as Trump did in his speech last night, you magnanimously declare that you'll only "reciprocate" by charging half that "tariff" on them.

As such, for Lesotho, the calculation goes like this: ($236M - $7M)/$235M = 97%. That's the "tariff" Lesotho is deemed to charge this U.S. and half of that, i.e. roughly 50% is what the U.S. "reciprocates" with.

It's extremely easy to see why this makes no sense at all.

First of all, there's nothing Lesotho can do about it: they can't change tariffs they allegedly charge the U.S. to reduce the tariff rate the U.S. "reciprocates" with because, again, it's NOT based on any tariff that they charge.

Similarly they can't do much about reducing the trade deficit they have with the U.S. because, again, they simply don't have enough money to buy U.S. products.

Also the main rational Trump gave for the tariffs is to get production back to the U.S., to "bring manufacturing back". 47.3% of Lesotho's exports are diamonds: how do you bring the "manufacturing" of that "back to the U.S."? Anyone can see it makes just about zero sense.

The Lesotho example exposes the fundamental economic incoherence of these tariffs. Rather than addressing actual trade barriers, they punish countries based on trade deficits that arise from structural economic realities. All the more countries like Lesotho which pose zero competitive threat to American industry.

Worse yet, these tariffs will likely make these structural realities even worse: the U.S. is Lesotho's second most important export destination so it's a fair bet that applying 50% tariffs on their products will make people in Lesotho even poorer, and therefore even LESS able to afford U.S. products.

But perhaps the most unfair and detrimental aspect of all this is that these tariffs represent a complete reversal of longstanding U.S. development policy, and therefore a betrayal of countries - like Lesotho - who chose to follow U.S. advice in the past.

For decades the U.S. has used preferential trade access to encourage economic development in the world's poorest nations, recognizing that trade, not just aid, could get them out of poverty and ultimately put them in a position where they too could afford iPhones or Tesla.

They're now effectively penalizing countries for following previous U.S. policy, a lesson which I bet they won't forget anytime soon.

So all in all the irony is painful: in the name of fighting unfair trade, America has just demonstrated what truly unfair trade looks like.

This isn't something designed to address genuine trade issues, but simply a mechanism based on arbitrary math to punish countries for the affront of selling more to the United States than they buy. The arbitrary math used to define the tariffs (which has nothing to do with tariffs charged on the U.S.) was just unwittingly confirmed by Deputy White House Press Secretary Kush Desai, in a way that shows he himself doesn't understand it 👇😅

https://x.com/JamesSurowiecki/status/1907657860793696281

This could potentially be quite transformational for peace in Ukraine and for Europe generally: welt.de/politik/auslan…

German newspaper Welt Am Sonntag, citing "EU diplomatic sources familiar with the matter", reports that "China proposed to the EU to participate in the 'Coalition of the Willing'" so as to "increase Russia's acceptance of peacekeeping forces in Ukraine."

Russia has so far vehemently rejected the idea of European peacekeeping troops in Ukraine but could indeed potentially be swayed if China were to be part of the coalition.

Such a move would also of course have the potential to fundamentally change the nature of EU-China relations and mark a huge shift in the continent's security architecture, where China would be an alternative security partner to the US in European affairs.

It would also strategically position Europe in a much more enviable position were it wouldn't be at the mercy of Washington's every whims, and could leverage competition between Beijing and Washington in a way that'd enhance its sovereignty and bargaining position.

All that being said, given the EU's proven history of diplomatic incompetence and strategic inertia, this scenario is more likely than not to remain theoretical. Some people reply that this could be fake news because this is inconsistent with China's historical position BUT it isn't: China was already one of the guarantor states in the 2022 draft "Treaty on Permanent Neutrality and Security Guarantees for Ukraine" negotiated in Istanbul (see screenshot, from here static01.nyt.com/newsgraphics/d…).

2022 treaty on which Lavrov said a peace deal must be based ("Our approach to the potential settlement has not changed: we are ready for dialogue on the basis of the 2022 agreements", mid.ru/en/foreign_pol…) 🤷

This "China is depleting the oceans with its huge fishing fleets" story is yet another utterly shameless piece of propaganda when China actually proportionally fishes much less than the rest of the world, since - unlike others - it gets the immense majority of its fish supply from aquaculture 👇 (src: openknowledge.fao.org/items/06690fd0…)

The worst culprit when it comes to depleting the oceans is actually Europe, relative to its population size. They fish about 33kg of fish per person per year compared with 10kg for China, a crazy 230% more! Actually if you read the report it's 13 million tones for China x.com/realSandkraken… Which corresponds to 14.3% of global captures of aquatic animals, which is less than Europe with 15.2 million tones or 16.7% of global captures. This is of course despite China having twice Europe's population...

In other words, Europe has 9% of the world's population but fishes 16.7% of the fishes while China has 18% of the world's population but fishes 14.3% of the fishes.

Now you tell me who is overfishing and who isn't...

If anyone wonders how to constitute the China allocation of their portfolio, these tickers, based on seating arrangements, are probably not a bad place to start.

That was actually the basic strategy of a friend of mine, very successful investor in China: he simply studied policy statements very deeply as well as signals like this meeting 👇 to understand what were China's strategic economic objectives and which companies would benefit from this. Just like the US has a "don't fight the fed" investment principle, China has in some way a "don't fight the government" equivalent.

(Not investment advice 😉) A list of some of the attendees 👇

https://x.com/shen_shiwei/status/1891363977722241261

Wow, this is huge. I just tried it myself with a foreign phone number (you can apparently choose any country, see screenshot) and it's true: you can now join Douyin - the Chinese version of TikTok - as an international user.

Which means the Great Firewall is coming down in the most unexpected way: with the world joining the China side of the wall.

Really feels like a Berlin wall moment, except in the opposite direction.
For people wondering where the hell I found the app, given it's not on Western app stores: apkpure.com/douyin/com.ss.…

This 👇 is arguably an even bigger Sputnik moment for China than the 6th generation fighter jet: a Chinese AI Model called DeepSeek v3 rivals - and often surpasses - the latest ChatGPT and Claude models in pretty much all respects for a tiny fraction of the training cost (only $5.5m), and it's open sourced (meaning anyone can use, modify, and improve it).

The fact that it's so cheap to train is particularly important as it completely changes the game of who can participate in advanced AI development. Up until now, the assumption was that you needed hundreds of millions or even billions of dollars to train such a model, yet DeepSeek did it with just $5.5m, a sum of money accessible to just about any startup anywhere. Concretely, this means that DeepSeek has just proven that serious AI development is not limited to tech giants.

And their model is not only cheap to train, it's also extremely efficient to run. They use an architecture called Mixture-of-Experts (MoE) where, while their full model has 671 billion parameters (which is huge), it only uses 37 billion at a time. To compare, Meta has 405 billion parameters in their latest Llama3.1 model and uses all 405 billion at a time. DeepSeek V3 is more than 10 times more efficient, yet performs better than Llama3.1 at almost all benchmarks (English, Math, Coding, etc.).

DeepSeek V3's performance at key benchmarks is impressive across the board:
- Crushes advanced math problems (90.2% on MATH-500, vs 78.3% for Claude-3.5-Sonnet and 74.6% for GPT-4o)
- Excels at coding (82.6% on HumanEval, vs 81.7% for Claude-3.5-Sonnet and 80.5% for GPT-4o)
- Can process huge amounts of text at once (128K tokens, roughly equivalent to 100,000 words in English)
- Processes text at 60 tokens per second, about twice faster than GPT-4o

And the craziest part is that it's open-source, meaning that:
- Anyone can download and study the code
- Developers can modify and improve it
- Companies can integrate it into their products without paying API fees
- The entire AI community can learn from it

Lastly, this obviously comes during an interesting context in China-US relations where the US is doing its utmost to prevent China from progressing technologically, especially in AI. As such, this is an absolutely beautiful response by China: "despite all your restrictions, we just built a world-class AI model for 1% of your cost, made it more efficient than anything you have, and open-sourced it for the whole world to use."

It's also a triumph of brains over money and raw power: with its restrictions the US placed China in a situation where it had to use resources more intelligently. As the saying goes "necessity is the mother of inventions"... And here we now are: China may have just changed the rules of the game forever, democratizing the very technology the US tried to restrict and proving, once more, that human ingenuity always finds a way. Interesting background on the company behind the model 👇

https://x.com/kevinsxu/status/1872492822529495251?t=Ec-rcEx51gIhqqaxyQQqng&s=19

This 👇 potentially changes everything, it looks like Trump envisions a U.S.-China G2.

He says that "China and the United States can together solve all the problems in the world".
x.com/kyleichan/stat…

From the point of view of a citizen of the Earth, I'm all for an improved relationship between the U.S. and China. And so far, despite some of his hawkish appointments, all of the statements by Trump himself point to that. Actions must follow of course, which is anything but a given: U.S. rhetoric often bears little correlation to their actions...

From the point of view of a European though, a US-China G2 would be a strategic disaster of the highest order. In fact it's long been something that many European strategic thinkers have warned about: if a US-China G2 materializes without Europe at the table, it will be on the menu.

A U.S.-China G2 would effectively mark an end to the undeclared world war we've been witnessing these past few years and declare the U.S. and China to be the 2 winners, setting the new rules of the game together the way the winners of WW2 did. Europe had a De Gaulle and a Churchill back then to defend its interests, there's virtually no-one today...

Which is why I've long said it was so strategically dumb for Europe to blindly follow the U.S. in its hostile strategy against China as one day (which looks like it may be coming soon) the U.S. would be bound to flip its position, leaving Europe exposed and with a damaged relationship with China. The smarter approach would have been to maintain an equally balanced relationships with both powers while building up European strategic autonomy. Instead of following Washington's lead on chip restrictions, decoupling initiatives, and confrontational rhetoric, Europe could have carved out its own path...

The question now is whether Europe can still recover its strategic position. And unfortunately the challenge appears nearly insurmountable: years of strategic complacency have left Europe vulnerable at precisely the moment when strength and independence are most crucial, with a complete absence of leaders of the caliber needed to navigate such tricky waters... Love how this is already being mischaracterized by "China watchers" as Trump playing into Beijing's hands: the "G2 that Xi Jinping has hoped for".
x.com/BonnieGlaser/s…

When actually the concept of a G2 originates from the very heart of the U.S. establishment, from people like Fred Bergsten, Zbigniew Brzezinski and Kissinger: en.wikipedia.org/wiki/Group_of_…

And China has actually historically been very critical of it, even rejecting the very concept. Here's for instance what Chinese Premier Wen Jiabao told Barack Obama when the idea was floated during his administration (gov.cn/ldhd/2009-11/1…): "The main reasons we don't agree with the concept of a 'G2' are: First, China is a developing country with a large population, and we remain clear-headed about the long road ahead to build a modernized nation; Second, China pursues an independent and autonomous peaceful foreign policy and does not ally with any country or group of countries; Third, China maintains that world affairs should be decided jointly by all countries, not dictated by one or two countries." (original Chinese: 我们不赞成有关"两国集团"提法的主要原因是：第一，中国是一个人口众多的发展中国家，要建成一个现代化国家还有很长的路要走，对此我们始终保持清醒；第二，中国奉行独立自主的和平外交政策，不与任何国家或国家集团结盟；第三，中国主张世界上的事情应该由各国共同决定，不能由一两个国家说了算)

And again now we have the proposal coming from the U.S., not China, and we can quite safely assume it will likely again face quite a lot of opposition from China.

This is crazy... So let me get this right:
- Yoon lost recent parliamentary elections
- He's invoking national security to justify emergency powers
- He's labeling the opposition as North Korean sympathizers
- He is strongly aligned with US policy (even strengthening ties with Japan, which is deeply unpopular with the population)

This sounds like a bad remake of the classic transitions to right-wing military dictatorship we saw in so many US vassals during the cold war.

Hopefully South Korea will be strong enough to prevent history from repeating itself... Couldn't be more appallingly undemocratic: martial law can be lifted by a vote in parliament but he's blocking access to it 👇

https://x.com/josungkim/status/1863951342777286858?t=14aSRy0p4FvSqY8tD_EygA&s=19

Goodbye Uniqlo China business (22% of their revenue!) 👋

It's a virtual certainty that Chinese consumers will stop shopping at Uniqlo after this. A *Japanese* company that publicly chooses to align with the West's Uyghur narrative against China (which not a single Chinese believes in, even those most critical of the government): it's the closest you can get to corporate suicide in China.

Puzzling why they'd do that. The last company that said it'd stop using Xinjiang cotton was H&M. Their sales in China immediately decreased by 41% ()bloomberg.com/news/articles/…

Absolutely perfect illustration of what we enable with the way the media and the Western political class framed what happened in Amsterdam.

There was a football match between Israel and France yesterday and this 👇 happened at the beginning of the match: a horde of Israeli supporters openly lynched some French supporters in the stands.

Macron himself was in attendance at the match to show his commitment to "fighting antisemitism" after Amsterdam... He made no public comment that I know of on these French supporters getting lynched in front of his eyes. And the police made no reported arrests.

Had the reverse been the case, had this been some Israeli supporters getting lynched by a horde of French supporters, you can absolutely bet 100% that he (and all the French media) would have made a huge deal out of it.

You cannot overstate the absurdism of it: because we've so gaslighted ourselves around "antisemitism" and so distorted the meaning of it, Western countries would literally rather let our their own citizens get lynched on their own soil - in front of the president's eyes (!) - than face accusations being "antisemitic" in their own definition of the term. French TV interviewed after the match an Israel supporter (wearing an IDF t-shirt) who participated in the lynching, who commented that "the security [in the stadium] was magnificent. I'll even say even too much... We had a small problem in the block K, directly it was settled, the police came and directly they solved the problem".

No comment...

This is hugely important and no-one is paying attention.

Philippines President Marcos Jr. just signed 2 new bills (the "Maritime Zones Act" and the "Philippine Archipelagic Sea Lanes Act"), backed by the U.S. State Department (via a press release by the infamous Matthew Miller: state.gov/on-the-philipp…), that claim to implement "international law" but actually are a direct violation of international law in that they attempt to legitimize expansionist claims at the expense of virtually all its neighbors.

Let me explain 🧵
First, some context.

The Philippines exist as an independent country since 1946 when they gained their independence from the United States. They had never existed as a country before.

The establishment of the Philippines was officialized by the Treaty of Manilla.

This is crazy: Israeli police arrests 2 French military personnel ("gendarmes") with diplomatic status in a Christian church (the Eleona Church) that has officially belonged to France for 160 years and is protected by diplomatic immunity: x.com/sambklf/status…

To make things worse the church is located in occupied East Jerusalem - theoretically Palestinian territory - and the arrests occured as the French foreign minister Jean-Noel Barrot was due to visit it. He cancelled his visit due to the presence of Israeli police on site and the breach of diplomatic immunity.

Yet another unarguable proof that Israel respects absolutely zero rule. Live reaction by France's foreign minister, who looks very shaken: "I will not enter the Eleona domain today because Israeli security forces entered it armed without first obtaining authorization from France and without agreeing to leave today."
x.com/sambklf/status…

In normal language, given this is officially French territory, it's called an armed invasion of sovereign territory...

As our 2-week road-trip in China's Sichuan came to an end, time to do a small retrospective to summarize what we've done in case anyone wants to do a similar trip one day, or just needs inspiration for when they travel to China.

A small 🧵 of what we did and saw, day by day.


But before I start, a few practical observations.

I did this trip visa-free, as French nationals don't need visas anymore for stays in China of less than 15 days. Check for yourself if you need a visa.

Anyone can do this trip, we did it ourselves with 2 young kids, but I'll admit we're definitely not the relaxed type of travelers who like to tan on a beach somewhere. We like to actually visit stuff 😊

You do need a Chinese driving license to drive in China (I have one). It's really easy to procure one nowadays, in some places like Beijing you can even convert your foreign driving license into a Chinese one upon landing at the airport. Otherwise you have myriads of other ways to get around in China.

Yes, it immensely help to speak Chinese or travel with someone who does to get around in China, very few people speak English. Although I can imagine you can manage to get around with instant translation apps (never tried it myself). Most people are typically very friendly and helpful to foreign tourists.

For the most popular attractions in China make sure to think about booking tickets in advance (or ask a travel agency to do it for you) as places are limited. Typically attractions release tickets a week ahead of time, although it depends.

Lastly, if you travel to China for the first time (not at all my case, I've been coming to China for 16 years and lived during 8 years in the country) you need to be prepared to a dramatically different tech and payment ecosystems from the rest of the world. At the very least set-up WeChat before you depart on your journey and connect your debit/credit card to it, as WeChat is the ubiquitous payment method in China. Also be sure to download a VPN that works in China, or alternatively roam on your foreign sim card so the great firewall won't apply to you, and so you'll keep being able to use all your usual apps.

With that out of the way, here's what we did 👇

I'm genuinely amazed that some places like this still exist in China.

On our drive to Chongqing airport back from SanXingDui we decided to check midway a spot called "Qian Fo Zhai" ("Thousand Buddhas village") in an area named Anyui. And it turns out to be an entire hill with some amazing Tang and Song dynasty grotto carvings that are completely free to access, with virtually no tourists.

I thought that at this stage most of those had been organized in touristic attractions, similar to Dazu, Mogao or Longmen grottoes but no, turns out you obviously have a number of those which are still unorganized, which is quite an amazing experience. Probably won't remain the case for long, if only for purposes of protecting the artifacts. And at the bottom of the hill we just stumbled upon a Buddhist monastery and listened to the monks singing a beautiful prayer 🙏

Last full day of our 2-week Sichuan road-trip and we end it on a high point: a visit of SanXinDui, one of the greatest archeological discoveries of all times, anywhere in the world.

Unfortunately SanXinDui is bizarrely unknown in the West, even though it ranks on par with things like the discovery of Tutankhamen's tomb or the Terracotta army in Xi'an.

SanXinDui used to be the capital of China's ancient Shu kingdom which ruled here between 1,700BC and 1,200BC so everything in the museum is 3,000 to 4,000 years old.
The artifacts found here - and they uncovered an incredible 17,000 objects already - are beyond extraordinary, almost otherworldly, revealing a unique culture unlike anything that had been found in China before. And a culture much more advanced for that time period of Chinese history than had been assumed before.

Here you can see 4 pieces we just saw in the museum:
- A monumental bronze mask in pure SanXinDui style, with protruding eyes that archeologists believe symbolizes a far-sighted leader or shaman
- A typical SanXinDui mask with a gold plated mask on top of it
- A monumental 4m tall bronze "tree" with dragons for its roots and birds with 9 fruits and birds on its branches
- A wheel with 5 beams thought to represent the sun

More artefacts we saw in the museum in the 🧵 below 👇


You can see many, many bronze masks, all with similar features but all unique

Genuinely incredible experience in China today, straight out of a movie.
So we're in E Mei Shan in Sichuan, one of the 4 sacred Buddhist mountains in China, and I was told by my friend @ZhaiXiang5 of this temple called "Sacred Water Temple" that's hidden from tourists and especially beautiful.

We had high expectations but we still were blown away, this place is truly the hidden gem of E Mei Shan, incredibly charming!

This is us arriving at the place 👇 (the rest in the 🧵) Look how amazingly pretty the inside of the temple is!

Status update: having a hotpot in a bomb shelter, served by robots. Only in Chongqing 😅 For the folks confused about what's happening: Chongqing has thousands of bomb shelters from the time the Japanese were bombing the city when the government was here.

Many of these shelters are today converted into shops or restaurants.

Very special dinner tonight in Chongqing in Dadong, one of the most luxury restaurant brands in China (especially famous for its duck).

I went through the whole menu for you 👇 so you can see how beautiful their dishes are.

I'll also post all the dishes we eat one by one as a 🧵 below as we receive them. To start with, the duck!

A lot of sensationalist stuff gets written on China, and most of it is horsesh*t.

But rarely, some of it is true.

This is the story of a project on which 60,000 Chinese soldiers worked during 18 years in complete secrecy. It was simply known as the "816 project".

A 🧵 I came across it yesterday, when looking for spots to visit around Chongqing.

About 150km East of the city, I noticed a place in the middle of the countryside simply called "816 Nuclear Military Plant".

My curiosity piqued, I looked into it and could barely believe it.

The resolution just passed by the EU Parliament on Ukraine is a sad illustration of how undemocratic and dangerously deluded it's become.

Undemocratic because it acts against the will of the people. Deluded because it asks for things everyone knows are impossible.

A short 🧵 First of all, what do Europeans want? All the surveys are crystal clear (for instance this recent one by @EurasiaGroup 👇): approximately two-thirds of Europeans want their leaders to "push for a negotiated settlement for the war in Ukraine".

Interestingly, there's a Taiwan angle to the pager terror attack by Israel: according to the NYT () the pagers were made in Taiwan and Hezbollah had ordered the pagers from a Taiwanese company called "Gold Apollo".

Israel and Taiwan have been forging a closer relationship lately (see this interesting article about it: ), mostly because their fate is in many ways closely linked, as Mao once said "Israel and Taiwan are bases of operation for imperialism in Asia. They created Israel for the Arabs and Taiwan for us. They both have the same objective". And I think they are each well aware that the fall of one would make the position of the other more fragile, as it would set a precedent.

So not too big a stretch to think that Taiwan could have assisted Israel in this terror attack. Although it of course needs to be confirmed (and probably never will be...).

And by the way, yes, it absolutely is a terror attack, although obviously no Western media is going to call it that:
- There was obvious intent to inflict maximum casualties and psychological impact
- The attack was indiscriminate in that Israel had no way of knowing who was in the vicinity of all the devices were when they got detonated, and as a matter of fact the attack did cause many civilian casualties (the dead include a 10 year old girl, and the wounded hundreds of civilians)
- It occurred outside of a war zone and was a blatant violation of another state's sovereignty (Lebanon) in an action obviously not sanctioned by the UNnytimes.com/2024/09/17/wor…
middleeasteye.net/news/israel-ta…
Update, the founder of Gold Apollo, the Taiwanese company says they didn't make the pagers: "The product was not ours. It was only that it had our brand on it." ()

He said that the model was produced and sold by a company called "BAC" and "declined to comment on BAC's location" 🤷‍♂️reuters.com/world/middle-e…