Give it another month and it’ll be down to 10% (if that)

And people hound me about #China being a dystopian hellscape. Perhaps, but what only seems obvious is that America is heading in the same direction. Sam Altman's eye-scanning ID project launches in U.S. with six locations

CNBC

Sam Altman's eye-scanning ID project launches in U.S. with six locations

Altman co-founded "World" in 2019 — known as Worldcoin until last year — to create a global identity verification system.

China Morning Missive Any American company having, to this very day, a China supply chain acute dependency is - bluntly - a company having no other options. Or better put, has no other options which won’t either (1) detrimentally impact adequate access to finished goods/required inputs or (2) severely impairs profitability. It’s been seven years since Trade War 1.0 and the point at which the risk posed by an over-reliance on China for any given company’s supply chain became overtly evident. Then that risk went from theoretical to very, very real. China at the onset of Covid implemented export controls on locally manufactured PPE. Today it’s rare earths. What might be next? All else equal, the combination of these two known events should have resulted in all American companies exiting completely from their China based production. But all else is not equal and for far too many the Gordian Knot has proven impossible to cut. All that was left were excuses. Again, it has been seven years and I’ll repeat my point. If a company hasn’t shifted its production out of China it’s because they can’t. What has been learned is that China is all but impossible to quit for so many and so many critical industries in America. All that Mr. Ackman has done here is put his ignorance on full display.

Bloomberg.com

Ackman Says Time Is Friend of US, Enemy of China in Trade War

Billionaire hedge fund manager Bill Ackman said China will need to strike a trade deal with the US quickly as it can’t win a drawn-out trade war ...

China Sunday Morning Missive Sitting back with a coffee on a Sunday morning and this is what comes across the “feed”. DeepSeek is back. Then again, it was just a matter of time. Assuming the speculation is true it could be yet another chaotic week ahead. Then again, what else is new? It would appear that the proverbial genie is now well and truly out of the bottle. Lest we forget China also had its Thorium moment last week as well. The evidence is building. A policy of containing China has failed. Like it or not, the only path forward is cooperation. Granted, that is - sort of - what TresSec Bessent openly said last week. The Trump team does want to engage and negotiate. There is a desire for a “really big deal”. The issue, however, are the terms of those negotiations and right now the parties are well and truly divided. China has made it abundantly clear what is required to begin talks. Trump is increasingly boxed in and as that realization continues to become impossible to deny expect a further walking back. As more and more time passes, and as China continues to demonstrate tenacity in the face of tariffs, whatever American leverage may exist rapidly fades.

Wccftech

DeepSeek R2 AI Model Rumors Begin to Swirl Online; Reported to Feature 97% Lower Costs Compared to GPT-4 & Fully Trained on Huawei

DeepSeek is set to drop another model pretty soon, as details about their next

Hope is not a strategy. Treasury Sec. Bessent says China, U.S. have 'opportunity for a big deal' on trade

CNBC

Treasury Sec. Bessent says China, U.S. have 'opportunity for a big deal' on trade

Bessent named-checked Bridgewater founder Ray Dalio, who recently expressed fears of a sharp fallout from President Donald Trump's tariff policies.

China Morning Missive II What can only be described as a complete turnaround on China in a single day could be very telling. What I’ve not yet added is how there’s been zero commentary within #China about how it is the Beijing power players are thinking about the issue of US trade. The point remains though. The entire Trump team, including the President himself, is out there publicly in what can only be described as pulling back from the abyss. Might this all be some sort of 4D chess play? Maybe. Then again, I am far more inclined to go with Occam’s Razor here. The answer to the about-face on trade with China is simply the understanding that China is the producer for nearly everything the US consumes. Cutting the supply off, almost entirely I might add, is set to (1) lead to higher prices for all manner of goods and/or (2) a vast reduction in the overall supply of goods on the shelves of American retailers. If you thought American’s lost their mind when eggs prices surged earlier this year, think what the reaction would be if they walked into Walmart and found that the shelves were barren.

Bloomberg.com

Trump’s U-Turns on Powell, China Follow Dire Economic Warnings

Confronted with fresh warnings from financial markets, business leaders and top advisers, President Donald Trump this week eased off on two of his ...

China Morning Missive Color me skeptical in regards to the news just out that Trump and Xi are now set to met in person in early May. Then again, the triple digit tariffs on all Chinese imports to America may already be having a material (negative) impact on the American economy. What is known is that Sec Bessent held a private meeting with JP Morgan clients and stated that a deal with #China was in the making. See news story linked below. I am not a believer in coincidence. This commentary from Bessent comes a single day after a White House meeting with the CEOs of Walmart, Costco and Target. Each of the companies has made the pilgrimage to China over the past month in an attempt to have their suppliers “eat” the Trump tariffs. In each case, the Chinese suppliers simply said “no”. Inventories are being drawn down and the risk isn’t just higher prices, but stores that have vastly less on offer. The shelves are at risk to being bare. Like I said on CNBC yesterday. Trump has already flinched. He appears to be doing so once again. https://www.reuters.com/world/bessent-sees-de-escalation-us-china-trade-tensions-talks-be-a-slog-2025-04-22/

So this just flashed out in the news. Call me skeptical.

News & Analysis for Stocks, Crypto & Forex | investingLive

Trump and Xi to meet in early May | investingLive

Finally!

Back hashing it all out on Trump v China earlier today on CNBC Asia.

China Morning Missive Here is but one example of why an American policy of containment just won’t work with China. It might have been possible a decade-plus in the past, but not today. Nvida is told to halt all chip shipments to China. This was expected going back to the first trade war in 2018. In fact, Trump’s biggest mistake was to loudly and publicly point out all of China’s weak points. This included access to tech. The Chinese heard, knew what Trump said was correct and with that action was taken. For five years China prepared for what is now playing out. None should be surprised by Huawai announcing new, competitive chip technology nor with CATL with advances in batteries and EV charging stations. Remember DeepSeek? That is just the tip of the proverbial iceberg. https://www.reuters.com/world/china/huawei-readies-new-ai-chip-mass-shipment-china-seeks-nvidia-alternatives-sources-2025-04-21/

This so good to be up for air and able to post Notes here again.

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.

Al Jazeera

US hits record arms sales in 2024 driven by Ukraine demand

US arms export growth was driven by countries seeking to replenish weapons stocks that were donated to Ukraine.

2001 George W Bush “you are either with us or with the terrorists” 2025 Donald J Trump “we might force countries to choose between the US and China” We’ve all seen the game before and, arguably, America had far greater leverage 25 years ago. Arguably. And it still turned out horribly wrong. Over the past decade and a half, the US has spent blood and treasure on a series of misadventures. China, on the other hand, has deployed trade surpluses to build.

China Morning Missive Nothing at all surprising about this move, even as the chorus continues to call for “fiscal stimulus”. The fact that China’s central bank remains cautious on rates tells you all you need to know. Pragmatism is the name of the game. Don’t expect any material moves to support the local economy until Beijing has a clearer understanding of what, exactly, the Trump administration wants from this trade war. https://www.reuters.com/markets/rates-bonds/china-set-leave-lending-rates-steady-tariffs-raise-easing-bets-2025-04-18/

Trying something new in an attempt to be more production on Nostr

TikTok is the canary in the China trade war coal mine. If the Trump team is unable to secure a deal on the social media platform then the two parties remain at a stalemate. The Chinese know how central TikTok is to a wide swath of Americans. If no deal is to be secured, as part of a much larger trade deal, then the Chinese will just burn it to the ground. Once that path is taken, the Chinese will blame the outcome on Trump. I will also repeat that the Chinese side hasn’t even begun to play hardball with Trump. Once you see headlines about “export controls” on items beyond rare earths then you will know the game has been taken to the next level. https://www.reuters.com/technology/trump-says-china-has-reached-out-tariffs-tiktok-deal-may-wait-2025-04-17/

Not that this #China strategy should come as a surprise. It’s the fact that Bessent and the entire Trump team actually view the strategy as being “doable”. When reviewing which country represents the largest trading partner of other countries China has surpassed the US years ago. The only solution is for the US and China to recognize the world as it is rather than the world they wish it to be. The solution will demand collaboration. That, however, isn’t the American position …… at least not at the moment. https://www.wsj.com/politics/policy/u-s-plans-to-use-tariff-negotiations-to-isolate-china-177d1528?st=ynEXsW&reflink=article_copyURL_share

Been keeping busy but I so need to get back here with Notes. So much to share on the #China front. For now though there is this 7pm Tuesday night (today) @preston @James Lavish themes - and more - which you both addressed last week on your podcast.

China has zero American fucks to give. Think the Trump team will be waiting a bit longer for that inevitable “call from Beijing”. https://www.reuters.com/world/asia-pacific/chinas-xi-visit-vietnam-malaysia-cambodia-april-14-18-xinhua-reports-2025-04-11/

What it’s means when you use the phrase “The Definition of Insanity”. And pardon my vulgarity, but it has really devolved into a dick measuring contest at this stage. https://www.wsj.com/world/china/china-trump-trade-tariff-war-98676e74?st=pACsqa&reflink=article_copyURL_share