Trade War Update: Make Americans Grow Angry

China’s Ministry of Foreign Affairs again refutes Trump’s lies that China is negotiating—China is not:

In response to a question on how far China and the US are from formally initiating trade negotiations and whether China is willing to participate in negotiations only if the US lowers tariffs first, given that US President Donald Trump said in an interview with NBC that he will not drop tariffs to get China to negotiating table, Lin Jian, a Chinese Foreign Ministry spokesperson, said on Tuesday that this tariff war was launched by the US. China's position is consistent and clear: We will fight, if fight we must. Our doors are open, if the US wants to talk.

The US side recently keeps saying that it wants to negotiate with China. There are no winners in tariff and trade wars, and if the US side really wants to solve the problem through dialogue and negotiation, it should stop threatening and pressuring, and engage in dialogue with China on the basis of equality, respect and mutual benefit, Lin noted.

As with Russia’s well stated position on negotiations, China's also being ignored while Trump conducts megaphone diplomacy trying to position the Outlaw US Empire as victim instead of aggression initiator as it was with Ukraine. The situation with shipping and retailer inventories within the Empire will soon become critical as Gene Seroka, Port of Los Angeles Executive Director informed Bloomberg in this 3.5-minute clip. Bloomberg’s reporters focused mostly on clothing while today’s Global Times focused on housing construction and related household items:

US homeowners bear brunt of tariffs: Chinese suppliers

On April 2, the day when the US administration announced its so-called "reciprocal tariffs" affecting more than 180 countries and regions around the world, a merchant surnamed Xiong from Hangzhou, East China's Zhejiang Province, felt perplexed.

"It is hard to tell how the tariffs will impact our business and like many others we have drawn up backup plans," said Xiong, general manager of a construction company which operates a customized summer house construction business.

However, while Xiong was worried about the potential impact of the tariffs on his business, he got an invitation. "On this very day, we actually received an invitation from a client based in Boston to conduct an on-site survey at the latter's ski resort, and if this deal is finalized, it will generate $2 million in revenue for us," Xiong said.

As Xiong flew to meet his client, whose company had booked his flight, he asked, "are you not concerned about the tariffs?"

Passing on costs

Xiong said his client told him that "life has to continue even with the tariff, and having no revenue at the ski resort is unacceptable... the only way is to swallow the tariff first and then eventually pass on the increased costs to visitors to the resort, through ways such as higher administration fees."

Xiong's experience on what US officials call "Liberation Day" is just one example illustrating the resilience of mutually beneficial trade flow and business ties between American and Chinese companies in the area of residential and commercial building and maintenance.

Several Chinese suppliers have also seen the negative impact of the hefty tariffs imposed by the US on the sector; however, the impact will mostly be felt by US consumers, as the tariffs will add up the building cost for American homes and lower Americans' living standards.

Although large portion of US home building materials come from Canada and Mexico, industry players pointed out that tariffs on a wide variety of goods from China will also inevitably increase costs in the US home building and construction sector.

The US administration has imposed 145 percent tariffs on Chinese goods and 10 percent tariffs on imports from most other countries. The tariffs will affect Chinese products essential to the US home building and construction sector. From lawn mowers to DIY toolboxes, US homeowners will face higher prices due to the tariffs, several representatives from Chinese suppliers said.

China is a major supplier of many key materials for the US construction industry, Ye Wen, owner of a home building materials company based in South China's Guangdong Province, told the Global Times.

"From my observation and information gathered from expo clients, 'Made in China' fasteners (nails and screws), LED lighting, and decorative building materials accounted for nearly half the US market share," Ye said.

Despite additional costs resulting from the tariffs, Chinese products remain the top choice for the US purchasing managers due to their stable quality, comprehensive supply chain advantages, and responsiveness, Ye said.

Zhong Shangtian, another owner of a home construction company based in Guangdong, told the Global Times that in addition to bolts and nuts, and hardware accessories, the US is heavily reliant on Chinese-made drywall, timber and wood products such as plywood and magnesium oxide wallboard, a newer type of home building material, for which the US heavily relies on Chinese producers.

It is true that many of these products can be and are produced in the US, or Canada, but low-cost offerings from China remain something that US builders rely on... "just imagine the cost benefits if we are talking about large residential district or commercial projects," Zhong said. "To block Chinese-made goods is to rob this cost-effective option from homebuyers."

Meanwhile, Chinese companies have been actively coping with the US tariffs. Chinese suppliers interviewed by the Global Times said that they have worked on ways to diversify their markets, such as making new entries into the ASEAN and European markets, as the US tariffs eroded some of the market demand. None of them is willing to eat the tariffs as it is far beyond their margin and their products can find a buyer in other markets.

Diminished outlook

These warnings coincided with an estimate from the National Association of Home Builders (NAHB), a US industry association, which pegged the typical cost impact of recent tariffs at $10,900 per home, despite ongoing fluctuations in the US tariff policy since early April.

The duties in place on imported steel, aluminum, and other metals have already driven up prices, including for essential supplies like nails, screws, bolts, and fasteners that builders use by the millions, according to New York-based US business media outlet Inc.com.

"There is virtually no short-term replacement of 'Made in China' goods, due to Chinese manufacturers' production capacity, technological sophistication, and supply chain stability that guarantee project progress," Ye said.

"Looking down the pipeline, I think housing accessibility in the US will be compromised because of the sweeping tariffs, new home prices will rise in particular, some developers will choose to delay the projects, and middle- and low-income American households and first-time homebuyers will bear the brunt of it," Ye said.

The NAHB estimates that $204 billion worth of goods were used in the construction of both new multifamily and single-family housing in 2024 and approximately 7 percent of all goods used in new residential construction are sourced from foreign countries.

Overall, builders estimate that recent tariffs have added an average of $10,900 to the cost of each new home, according to the NAHB, citing data from an April survey conducted with the NAHB/Wells Fargo Housing Market Index. This came on top of a 34 percent rise in the cost of building materials since December 2020, which is far higher than the rate of inflation, the NAHB said.

Anirban Basu, chief economist at US industry body Associated Builders and Contractors, told Inc.com that "these tariffs have already materially diminished the outlook for construction activity in 2025." [My Emphasis]

Housing construction was one of the few bright spots within the Outlaw US Empire’s economy, although the continued reliance of the suburban settlement construction pattern greatly impacts energy and other infrastructure efficiency negatively. And the cost of cookie-cutter tilt-ups in suburban tracts averages $210,000 in the lower housing cost states (when I looked at such housing in Colorado during 1990 the cost for a modest house was $90,000); unfortunately, many such tracts include McMansions that skew the average. As Hudson and articles about housing note, most homeowners spend 40% of their income on their home. While most current homeowners will handle house-related tariff inflation, new homeowners needing to furnish their homes and purchase tools to manage their landscape will be hit hard. But price hikes are only one factor of concern as the Port Director said; what’s critical is inventories and looming shortages beginning as soon as mid-June for all products.

And contrary to many expectations is the fact that all sectors of US exports are also being affected by the Trade War as this Guancha news item reported today:

US press: The impact of Trump's tariffs has worsened, and almost all US exports have been hit

According to a report by the U.S. Consumer News and Business Channel (CNBC) on May 6, due to U.S. President Trump's insistence on provoking a "tariff war", many companies canceled manufacturing orders, and U.S. imports plummeted, and now it has further evolved into a nationwide decline in U.S. exports. Almost all U.S. exports have been hit, with agricultural products being hit particularly hard.

According to the report, Vizion, a trade tracking agency, analyzed container booking data before and after Trump's tariffs went into effect, and they found that exports at most ports across the United States have seen a significant decline.

The Port of Portland, for example, saw its largest decline in exports by 51 percent. Exports from the Port of Tacoma, a large agricultural export port with corn and soybeans, were also down 28 percent, with agricultural products shipped mainly to China, Japan and South Korea. Exports at the Port of Los Angeles fell 17 percent, Savannah Ports, which have the largest container exports of agricultural products this year, fell 13 percent and Norfolk lost 12 percent.

Other ports saw smaller declines, such as the Port of Houston and Seattle, where exports fell by 3 percent and 3.5 percent, respectively. But Ben Tracy, Vizion's vice president of strategic business development, noted: "It's clear that almost all U.S. exports have taken a hit. ”

This confirms what the U.S. agriculture industry has been warning about its lack of ability to sell its produce to global markets.

CNBC noted that the decline in exports was related to a decrease in container ships destined for the United States, as some companies were forced to cancel manufacturing orders, causing some Chinese factories and cargo ships to stop entering the United States. Tariffs have led to a rapid decline in U.S. imports, with port data tracked by Vizion showing a 43% week-on-week decline in container volumes at U.S. ports from April 21 to April 28.

Kyle Henderson, CEO of Vizion, said: "We haven't seen anything like this since the pandemic interrupted in 2020. This means that shipments that were scheduled to arrive in the next six to eight weeks will not be delivered at all. As tariffs push up costs, small businesses are suspending orders, and goods that once had reliable shipping channels are now doubling in price, forcing importers to make difficult choices.”

Retailers have been urging U.S. consumers to buy goods as soon as possible, and data from Bank of America's global research unit suggests that warning may be correct. The agency's latest forecast data shows that the number of container ships entering the U.S. port of Los Angeles will fall further in May, and the trade dispute will lead to a 15 to 20 percent reduction in the number of U.S. containers imported from Asia in the coming weeks.

The Bank of America report pointed out that despite the early "stockpiling" of goods by U.S. businesses at the beginning of the year, there has been no significant increase in commodity inventories, many retailers may only have one to two months of inventory, and any unforeseen demand or supply disruption could affect retailers' supply of goods and commodity prices in the United States.

CNBC said that in the second half of this year, the United States will usher in the peak shopping season such as National Day on July 4, "Black Friday" in November and "Cyber Monday" in December, and retailers now need to source goods and prepare for the holidays, so this June could be a "turning point" for the US supply chain, "either lock in the success of the holiday in advance or have to resign to fate".

Kipling Louttit, executive director of the Southern California Maritime Exchange, said tracking data showed that only 14 cargo ships had arrived in the last three days, and only 10 were scheduled to arrive in the next three days, but the "normal level of activity" over the three days should be 17 cargo ships.

He warned that the reduction in the number of cargo ships and containers arriving in the United States will further translate into a surplus of labor, trucks, trains and other parts of the supply chain, and that "they will lose their jobs because of the decrease in cargo arrivals."

Matson, a Hawaii-based cargo ship operator that offers expedited shipping services from China to Long Beach, California, has seen a 30 percent drop in container volumes from a year earlier than Trump tariffs since April went into effect. Matson has lowered his outlook for 2025 on May 5, citing tariffs, trade regulatory measures, U.S. economic issues and geopolitical issues.

Matt Cox, CEO of Matson, said on the earnings call: "We have limited visibility into our container demand. We expect container volumes to decline year-on-year in Q2 and at this point, it is difficult to determine whether the lower levels are temporary or will persist longer in 2025. The duration of the period of declining demand may depend on ongoing negotiations, as well as the timing of possible tariff adjustments. ”

On May 6, local time, data released by the U.S. Bureau of Economic Analysis and the U.S. Census Bureau showed that the U.S. international trade deficit in March 2025 was $140.5 billion, up from $123.2 billion in February, a record high. Exports in March were $278.5 billion and imports were $419 billion. [My Emphasis]

The above outcomes were all predicted by responsible economists and studiously ignored by Team Trump. Now we turn to the Trade War’s effects on the Tech War as described by this Global Times item: How US abuse of tariffs against China affects Apple – and why China holds the cards:

In recent days, international media have been paying close attention to Apple CEO Tim Cook's warnings about the potential impact of the tariff war on Apple's earnings. As one of the world's most valuable companies, Apple has a significant influence on the US economy, the global economy and people's lifestyles. The challenges that Apple faces are inevitably the challenges posed by the tariff war initiated by the US. The New York Times even published an article calling on Americans to replace their iPhones, while Bloomberg ran a headline: "Apple Reaches Critical Juncture With Tariffs, AI and Services Turmoil." This likely means that America's tariff war has also reached a critical juncture.

Apple CEO Tim Cook recently announced during the company's second-quarter earnings call that US tariffs on Chinese imports will cost the company an extra $900 million in the June quarter alone.

In response, Apple plans to shift most of its iPhone assembly to India for the US market. The company has already moved the assembly of iPads, Macs, Apple Watches and AirPods to Vietnam to reduce its dependence on China.

Irrespective of where production shifts, the inescapable consequence of Washington's tariffs will be a surge in prices, presenting a significant challenge for American consumers.

Unlike shoes or hats, which you might buy less if prices increase, smartphones, especially iPhones, are a different story. iPhones, which currently dominate about half the US smartphone market, have become an integral part of the people's daily lives. Let's face it: Many Americans would feel lost without their iPhones, even for a day or just a few hours.

Politicians in DC have long hoped Apple would bring production back home. However, Apple's dependence on China for production and market growth has only deepened since the Obama era. The US cannot take on iPhone production in terms of technology or workforce. About 90 percent of Apple products are now assembled in China, not to mention the thousands of apps developed for Apple devices.

If the US were to mandate that all iPhone assembly be done domestically, the financial implications would be significant. Wedbush analysts estimate that the cost of a single iPhone could triple, reaching around $3,500. Other calculations suggest that such a move could require hundreds of billions of dollars. These figures underscore the substantial economic impact of moving iPhone assembly back to the US.

Apple has shifted some assembly lines to countries such as India and Vietnam, but many components are still made in China. That's because China continues to lead the world in key manufacturing technologies, and there aren't easy alternatives for many parts. In other words, Apple's supply chain is tightly linked to China. This fact also means China holds essential the cards in any trade dispute.

A recent New York Times article entitled "You Should Think About Replacing Your iPhone—Now" points out that the US lacks the manufacturing expertise, competitive industrial clusters, and even the population density required to make Apple products en masse.

Some in Washington argue that China benefits more from China-US trade. But look at Apple: In 2023 alone, Apple's revenue from the Greater China region reached $73 billion—accounting for about 19 percent of its global revenue.

China will continue to innovate and grow, no matter what. In the long run, what will the US stand to lose? Anyone with a bit of strategic vision already knows the answer. [My Emphasis]

Well, I don’t miss not having an iPhone or a “smart phone”; I have a very basic flip-phone that fills my cell phone requirement. And we aren’t an Apple household either since we have none of its products. But I’m certainly aware of Apple’s tech prowess and business impact. As the author notes, Apple’s experience is the same as most tech companies in their relations with China. In an article about China’s shipbuilding industry and the attempts by Biden then Trump to wage war on that portion of Chinese industry, the following is also appropriate for all China’s manufacturing:

For all ship types, China's manufacturing accounts for only 23% of the world's ships in use, and with the current number of ships under construction, this proportion has only risen to 25%, and if only the ships under construction are counted, then the proportion of China-made ships can reach 53%. Taking into account the price, the value of all ships manufactured and being built in China will not exceed 20%, which is roughly the same as China's share of the world's population. China is a large country with a huge population, more than the population of all countries in the entire Western world (about 1.1 billion people), and it should not be surprising that the size of any industry in China is comparable to that of the entire Western world. [My Emphasis]

It really is that simple—China’s population and geographic size dictate how large its agriculture and industry—its economy—will become. That it has millions of engineers and other tech professionals indicates it will eventually become a top tech leader which it’s been demonstrating. India has a similar potential that unlike the Outlaw US Empire China welcomes, not fears. That the Outlaw US Empire disdains industrial policy and has even viewed it as evil is its choice, which is one main reason why it now lags behind global trend setters. And something similar can be said about education policy which is where all those engineers emerge from. The truth of the matter is ordinary Americans and Europeans have had very little say in the way their economies are designed and who they are made to serve. A quick look at where wealth is concentrated gives the game away, or ought to—today’s Western economies are designed to serve the elites, the top 10%, not the majority, and have been structured that way for many decades, prior to WW1 in most cases. China and Russia primarily have political-economies that are structured differently—they aim to serve the majority, not a tiny minority or Oligarchy—and more nations are joining their geopolitical efforts to create fairness and harmony so humanity can prosper. Standing against those efforts are the Collective West’s Neoliberals and Neocons with Trump standing as their leader—Trump wants to return society to the Gilded Age of 1880-1910, which is what all his policies are designed for.

The cartoon explains a lot regarding the Empire at the very critical juncture of 1912 when several different future paths were possible besides the one we experienced. However, one political faction is omitted from the cartoon—the Socialists—and also vote that Labor isn’t depicted, while the majority of Americans weren’t legally allowed to vote—Women. So, as with the 1787 Constitution that established Oligarch rule, the 1912 election established Neoliberal rule, with only a brief interlude from 1933-1941, and created the economic and ideological structures that now imprison most of the nation and keep it from combining into a community to overcome the oligarchs. Perhaps this time with Make Americans Grow Angry the greater mass of the public will have an epiphany and combine to forge a different future path than that being forced upon one and all.

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