No Result
View All Result
SUBMIT YOUR ARTICLES
  • Login
Tuesday, October 28, 2025
TheAdviserMagazine.com
  • Home
  • Financial Planning
    • Financial Planning
    • Personal Finance
  • Market Research
    • Business
    • Investing
    • Money
    • Economy
    • Markets
    • Stocks
    • Trading
  • 401k Plans
  • College
  • IRS & Taxes
  • Estate Plans
  • Social Security
  • Medicare
  • Legal
  • Home
  • Financial Planning
    • Financial Planning
    • Personal Finance
  • Market Research
    • Business
    • Investing
    • Money
    • Economy
    • Markets
    • Stocks
    • Trading
  • 401k Plans
  • College
  • IRS & Taxes
  • Estate Plans
  • Social Security
  • Medicare
  • Legal
No Result
View All Result
TheAdviserMagazine.com
No Result
View All Result
Home Market Research Economy

Escalation dominance? – Econlib

by TheAdviserMagazine
6 months ago
in Economy
Reading Time: 3 mins read
A A
Escalation dominance? – Econlib
Share on FacebookShare on TwitterShare on LInkedIn


Kyle Chan recently made this claim in a blog post:

There is no such thing as escalation dominance. Trump thinks the US will win in a trade war because China sells more to the US than the other way around. A tit-for-tat escalation on tariffs means the US will always be able to tariff more Chinese goods than vice versa. Adam Posen has recently argued it’s actually China that has “escalation dominance” (a RAND concept in nuclear deterrence) because China has other ways of escalating beyond tariffs, including potentially denying Americans access to Chinese-made goods from smartphones to medicines. However, the reality is neither side has escalation dominance because both sides have already gone far beyond trade measures. . . . 

The US and China both believe they have escalation dominance, which makes the problem worse. US Treasury Secretary Scott Bessent said on CNBC that China had made a “big mistake” in retaliating against Trump’s tariffs because China was “playing with a pair of twos.” China’s Ministry of Commerce has said that China would “fight to the end.” While there are already signs that Trump is backing down, the confidence that each side feels—or at least tries to project—only fuels a downward spiral of recklessness and emotion-driven bravado.

I mostly agree with those points, but would like to add a few others.  In China, the public has begun rallying around the flag.  Here’s Bloomberg:

Financial investors, manufacturers in China’s eastern coastal region, policymakers in a range of departments and even elite factions that have lost out from Xi’s power grab are all rallying behind him. Even regular critics and entrepreneurs who have been pummeled by his policies in recent years want him to stand firm in the face of an unprecedented economic attack. . . .

“A few months ago, I would have said I’ve never known people to be so unhappy — with their lives, with Xi, with worries about the future,” said a Chinese toy and textile manufacturer who runs factories in Guangdong, India and Southeast Asia.

“Now, that’s all changed,” the person said. “People are still really worried about their jobs and income – they’re holding back from spending — but now the enemy is the US. They’re to blame for everything going wrong.”

In contrast, public opinion in America is sharply divided.  President Trump is rapidly losing support, especially on question related to the economy and tariffs.

In addition, the Chinese public is far more accustomed to accepting economic pain than are America’s consumers, who have never experienced events such as the Cultural Revolution.  Indeed the ability to “eat bitterness” is a core aspect of Chinese culture, and is not at all a prominent aspect of American culture.  Here’s AI Overview:

The Chinese idiom “eating bitterness” (吃苦, chīkǔ) describes enduring hardship and adversity without complaint, often in the pursuit of a greater goal or personal growth. It signifies a stoic and perseverant attitude towards difficult situations, where the ability to suppress emotions and endure pain is valued.

So how did the administration miscalculate so badly?  Perhaps they relied on a flawed economic model.  Economists understand that the greatest benefits from international trade go to the country that imports goods.  But most average people believe that it is exporters that gain the most from trade.  Those holding that view are likely to wrongly assume that our trading partners hold a weak hand.  Based on their public comments, Trump administration officials like Scott Bessent seem to suffer from this misconception. 

I predict that the next few months will produce an unpleasant wake-up call.  Of course I cannot be sure that this will occur.  But there is one issue where I do have absolute confidence in my prediction, where there is almost metaphysical certitude.  If there is a trade deal with China, the administration will declare it to be a “win” for the US, regardless of the terms of the deal.

PS.  The term ‘escalation dominance’ originated during the Cold War with the Soviet Union.  



Source link

Tags: DominanceEconlibEscalation
ShareTweetShare
Previous Post

Is BorgWarner Inc. (BWA) the Best Small Cap EV Stock to Buy?

Next Post

It’s a Wrap: U.S.-China Talks End With Signs of Progress

Related Posts

edit post
Why Republics Will Collapse | Armstrong Economics

Why Republics Will Collapse | Armstrong Economics

by TheAdviserMagazine
October 28, 2025
0

QUESTION: Mr. Armstrong, you have said many times that we are in a phase in which this time it will...

edit post
Private sector created nearly 15,000 jobs a week over the past month, preliminary ADP data shows

Private sector created nearly 15,000 jobs a week over the past month, preliminary ADP data shows

by TheAdviserMagazine
October 28, 2025
0

Private sector employers added an average 14,250 jobs per week over the past four weeks, according to new preliminary data...

edit post
Adam Smith Would Not Approve: The Evidence

Adam Smith Would Not Approve: The Evidence

by TheAdviserMagazine
October 28, 2025
0

Shortly after the “Liberation Day” tariffs were announced back in April, Janet Bufton wrote an excellent post about whether or...

edit post
The World Confronts the Genocide Washington Is Trying to Bury

The World Confronts the Genocide Washington Is Trying to Bury

by TheAdviserMagazine
October 28, 2025
0

Conor here: We’re offered daily reminders that the US-Israel has no intention of abandoning its genocide in Gaza. While the...

edit post
Mamdani To Reform NYC – Wall Street Moves To Miami

Mamdani To Reform NYC – Wall Street Moves To Miami

by TheAdviserMagazine
October 27, 2025
0

  Andrew Cuomo’s campaign just posted — and quickly deleted — this AI-generated ad depicting “criminals for Zohran Mamdani.” It...

edit post
Follow the Money and Power in the Trump 2.0 Political Maze

Follow the Money and Power in the Trump 2.0 Political Maze

by TheAdviserMagazine
October 27, 2025
0

Follow the money has been a rule of thumb for understanding American politics since the Watergate scandals of the 1970s,...

Next Post
edit post
It’s a Wrap: U.S.-China Talks End With Signs of Progress

It’s a Wrap: U.S.-China Talks End With Signs of Progress

edit post
Dow futures and the dollar surge as Wall Street cheers U.S.-China tariff talks

Dow futures and the dollar surge as Wall Street cheers U.S.-China tariff talks

  • Trending
  • Comments
  • Latest
edit post
77-year-old popular furniture retailer closes store locations

77-year-old popular furniture retailer closes store locations

October 18, 2025
edit post
Pennsylvania House of Representatives Rejects Update to Child Custody Laws

Pennsylvania House of Representatives Rejects Update to Child Custody Laws

October 7, 2025
edit post
What to Do When a Loved One Dies in North Carolina

What to Do When a Loved One Dies in North Carolina

October 8, 2025
edit post
Another Violent Outburst – Democrats Inciting Civil Unrest

Another Violent Outburst – Democrats Inciting Civil Unrest

October 24, 2025
edit post
Probate vs. Non-Probate Assets: What’s the Difference?

Probate vs. Non-Probate Assets: What’s the Difference?

October 17, 2025
edit post
California Attorney Pleads Guilty For Role In 2M Ponzi Scheme

California Attorney Pleads Guilty For Role In $912M Ponzi Scheme

October 15, 2025
edit post
Dollar mixed as investors eye central bank decisions, trade talks

Dollar mixed as investors eye central bank decisions, trade talks

0
edit post
Unlocking Stock Market Success: Why You Should Embrace the Skew

Unlocking Stock Market Success: Why You Should Embrace the Skew

0
edit post
Why Republics Will Collapse | Armstrong Economics

Why Republics Will Collapse | Armstrong Economics

0
edit post
Dogecoin Price Hasn’t Begun Its 3rd Wave Yet, ATH Above alt=

Dogecoin Price Hasn’t Begun Its 3rd Wave Yet, ATH Above $0.8 Still In The Cards

0
edit post
12 Future Tax Traps Gen Z May Run Into Before Age 30

12 Future Tax Traps Gen Z May Run Into Before Age 30

0
edit post
183 Million Credentials Stolen, Including Millions of Gmail Logins. Google Says Reports Are ‘Greatly Exaggerated.’ Are Your Details Safe?

183 Million Credentials Stolen, Including Millions of Gmail Logins. Google Says Reports Are ‘Greatly Exaggerated.’ Are Your Details Safe?

0
edit post
Dogecoin Price Hasn’t Begun Its 3rd Wave Yet, ATH Above alt=

Dogecoin Price Hasn’t Begun Its 3rd Wave Yet, ATH Above $0.8 Still In The Cards

October 28, 2025
edit post
Trump says he is prepared to send ‘more than the National Guard’ into US cities

Trump says he is prepared to send ‘more than the National Guard’ into US cities

October 28, 2025
edit post
183 Million Credentials Stolen, Including Millions of Gmail Logins. Google Says Reports Are ‘Greatly Exaggerated.’ Are Your Details Safe?

183 Million Credentials Stolen, Including Millions of Gmail Logins. Google Says Reports Are ‘Greatly Exaggerated.’ Are Your Details Safe?

October 28, 2025
edit post
Nokia shares jump on B Nvidia investment to grow AI networking, cloud footprint (NVDA:NASDAQ)

Nokia shares jump on $1B Nvidia investment to grow AI networking, cloud footprint (NVDA:NASDAQ)

October 28, 2025
edit post
Risks, Shifts & Strategic Design

Risks, Shifts & Strategic Design

October 28, 2025
edit post
AI-fueled cyberattacks make security more challenging

AI-fueled cyberattacks make security more challenging

October 28, 2025
The Adviser Magazine

The first and only national digital and print magazine that connects individuals, families, and businesses to Fee-Only financial advisers, accountants, attorneys and college guidance counselors.

CATEGORIES

  • 401k Plans
  • Business
  • College
  • Cryptocurrency
  • Economy
  • Estate Plans
  • Financial Planning
  • Investing
  • IRS & Taxes
  • Legal
  • Market Analysis
  • Markets
  • Medicare
  • Money
  • Personal Finance
  • Social Security
  • Startups
  • Stock Market
  • Trading

LATEST UPDATES

  • Dogecoin Price Hasn’t Begun Its 3rd Wave Yet, ATH Above $0.8 Still In The Cards
  • Trump says he is prepared to send ‘more than the National Guard’ into US cities
  • 183 Million Credentials Stolen, Including Millions of Gmail Logins. Google Says Reports Are ‘Greatly Exaggerated.’ Are Your Details Safe?
  • Our Great Privacy Policy
  • Terms of Use, Legal Notices & Disclosures
  • Contact us
  • About Us

© Copyright 2024 All Rights Reserved
See articles for original source and related links to external sites.

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In
No Result
View All Result
  • Home
  • Financial Planning
    • Financial Planning
    • Personal Finance
  • Market Research
    • Business
    • Investing
    • Money
    • Economy
    • Markets
    • Stocks
    • Trading
  • 401k Plans
  • College
  • IRS & Taxes
  • Estate Plans
  • Social Security
  • Medicare
  • Legal

© Copyright 2024 All Rights Reserved
See articles for original source and related links to external sites.