2/5 Trump admin's trade playbook required capitulations from all the other third nations, in order to alienate China in the global trade. This will give the US more leverages to the trade talks with China. https://www.whitehouse.gov/bri...

3/5 But economic ideas should always take politics into account, politicians might not act as the economists imagine. Once China determines to absorb all the pains in the short term, it has become a game of resilience. https://x.com/NiHao20010424/st...

4/5 Will Trump's trade playbook always be there? If the blue Americans can always absorb the pains as well, it can. This is the hole in the playbook, which omits the politics By the way, it is good news that China won't let RMB too weak as others think. https://x.com/NiHao20010424/st...

5/5 If the RMB is too weak, the dumping wave can only push other nations to capitulate to Trump very quickly. Those nations are worried EVEN now. https://www.economist.com/fina...

Also, if China determines to weak RMB, the US is ready to push it back. Then, under the dumping pressure from China, most 3rd nations might come to talk with Trump admin. Then China is alienated. Brad Setser's theory:

Stephen Miran's user's guide (distilled in a thread earlier)

Michael McNair's analysis: https://x.com/michaeljmcnair/s...

More from Michael McNair: https://x.com/michaeljmcnair/s...

More about the gold: (Link here) https://x.com/Brad_Setser/stat...