Mike Tyson’s most dangerous combo was a right hook to his opponent’s left kidney followed by a snap uppercut to the chin. Correctly executed, the right hook to the body momentarily stuns the opponent causing him to double over, exposing the chin to the uppercut follow-up. China just went big, implementing a 34% across-the-board tariff on imports from the US, export restrictions on a range of rare earth minerals and sanctions on 11 American companies. Mike Tyson has just delivered a right hook to the body.
China also went first. A parade of economies, Vietnam most publicly, has been making calls to the White House to negotiate away crippling tariffs. The pusillanimous strategy would have been to wait and see.
If China’s strategy were to salvage as much trade as possible, a wait-and-see strategy would be appropriate. The whole world would be jockeying for advantage as everyone takes cues from everyone else and winds up with similarly lousy deals, namely large reductions in tariffs and/or commitments to purchase sizeable quantities of American goods.
