The Fatal Flaw in Trump’s China Playbook

Trump’s economic team—spearheaded by CEA Chair Stephen Miran—is pushing a tariff blitzkrieg (20-50% on Chinese goods) to force a “Plaza Accord 2.0” and weaken the USD. Their fantasy? Repeat 1985’s Japan takedown. But here’s why this plan is doomed:

• China ≠ Japan

  • Japan’s “Lost 30 Years” happened because it lacked full supply-chain sovereignty (no raw materials, no domestic market scale).

  • China mines its own rare earth, feeds its own people, and dominates global manufacturing. Slapping tariffs just makes Beijing double down on self-sufficiency.

• Globalization’s Hedge Effect

  Miran’s model assumes a unipolar world where crushing China alone works. Reality? Vietnam, Mexico, and even EU nations now act as China’s shock absorbers. Tariffs might bankrupt Cambodia’s garment factories before touching Shenzhen’s tech hubs.

• The Credibility Suicide

  The USD’s strength relies on one unspoken rule: China recycling trade surpluses into Treasuries. Antagonizing your biggest creditor while waging tariff war is like burning your lifeboat to stay warm.

Team Trump’s “Customized Delusion” Problem

Miran and Navarro operate like fanfiction writers — tailoring models to Trump’s whims instead of economic laws. Example:

• Trump wants tariffs? Miran designs a “limited-parameter” simulation where 50% duties magically revive Detroit.

• Reality? EU retaliates, Japan hedges with RMB, and USD liquidity dries up.

Even Musk mocked: “Harvard econ degrees = overpriced toilet paper.”

The Inevitable Crash

History’s lesson: No currency survives without trust. The USD’s “exorbitant privilege” exists only because:

• China props it up via trade recycling.

• Allies tolerate its abuse.

Trump’s team is torching both pillars while chanting “MAGA.” Result? A global dump of USD assets — not by Beijing’s plot, but by America’s own hand.

Epilogue: How This Ends

• Short-term: Tariffs spike inflation, Fed prints more → USD devalues chaotically.

• Mid-term: BRICS+ nations accelerate de-dollarization.

• Long-term: The U.S. wakes up as international deadbeat — holding a $30T debt pile and a hollowed-out industrial base.

Bottom line: You can’t bully a multipolar world with 1985 tactics. But hey, at least Navarro got his book deal.