US-China Trade War: Mutual Misjudgments Trigger Early Showdown
An early conflict could be catastrophic for China, exposing economic vulnerabilities, raising the specter of a systemic collapse from an intensifying trade war.
The United States-China trade war, destined to reshape the dynamics between the two nations and the global order, has erupted prematurely due to mutual miscalculations. This conflict, potentially escalating into an all-out confrontation, could lead to dire economic consequences. Some economists predict that China's economy might face a "brittle failure," a catastrophic collapse as early as this year, 2025.
America's Misjudgment of China's Strength
On the one hand, the United States has overestimated China's economic and military prowess.
China's advancements appear formidable on the surface. Annually, China launches more naval vessels than the total existing fleets of all European nations combined. The People's Liberation Army continually upgrades its equipment, with a standard army brigade's firepower surpassing that of the US military. China's space program is thriving, with lunar missions and Mars exploration underway. In renewable energy, breakthroughs in photovoltaics and electric vehicles create an impression of relentless progress.
Additionally, China's financial diplomacy in Africa and Latin America, offering substantial aid to secure international support, bolsters its global influence. These indicators suggest an indomitable Chinese economy.
A notable example of this misjudgment is Elon Musk's recent endorsement of an analysis by Grok, which estimated China's 2025 GDP at $35.29 trillion in purchasing power parity terms. That would be 1.23 times larger than America and 1.60 times the European Union.
Musk's comment, "This comes as a surprise to most people," reflects a belief in China's economic dominance. However, this view has sparked debate. Critics, including American investor Kyle Bass, argue that such figures rely on manipulated data from the Chinese Communist Party (CCP).
When sharing his post, I noted, "I was surprised that Elon Musk has not seen through the CCP's data manipulation games yet. What Grok can get is mostly fake numbers about the Chinese economy released by the CCP or other 'experts' who use the CCP's numbers to do their studies." This highlights a broader tendency among some US observers to overestimate China's economic resilience.
China's Misjudgment of US Resolve
5/7/2025
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