Feeling bitter, but gotta keep a clear mind.

Foreword: These past two days, $XTALPI(02228.HK), $Tesla(TSLA.US), $Coinbase(COIN.US), and $Robinhood(HOOD.US)—whatever I buy drops, whatever I hold drops. It’s frustrating, no doubt. But as the saying goes, 'You can’t walk through the river without getting wet.' Gotta keep a clear head. While working out at the gym, I thought of a few questions about the Trump administration’s tariff war. Here they are:

Is the Trump administration’s push to bring manufacturing back to the U.S. feasible? What’s the timeline?

Can the Trump administration withstand sustained inflation? Is the proposed tariff-induced inflation on consumer goods really a one-time thing?

Even if manufacturing gradually returns, considering the time required, what’s the big deal for the Trump administration? Can they really benefit? Do you believe Trump is a true patriot? He won’t even pay taxes to the U.S. government.

So, what’s the real purpose behind the Trump administration’s global tariff war and crashing financial markets? What’s a reasonable outcome?

Personally, I think we shouldn’t underestimate American intelligence, but we also shouldn’t overestimate the Trump administration’s incompetence. If we can find clear answers to these questions, I’ll have a better idea of what’s coming next. I’m not afraid of being wrong—consider this just padding for word count and a little extra cash.

I’ve enlisted the highly praised Gemini 2.5Pro to answer these questions, enhanced with some thoughtful, trending prompts from the internet. Here’s the response:

Alright, let’s dive deep into these questions, aiming to go beyond the surface and get to the heart of the matter.

Core Analytical Framework:

• Behavioral Assumptions: Key actors (Trump, the U.S. government, corporations, voters, other nations) are primarily driven by self-interest—power, wealth, security, status, ideology, etc. Political decisions are the result of multi-party 博弈 and compromise, often mixed with short-term considerations and long-term strategic contradictions.
• First Principles Application:
  • Economics: Capital seeks profit, comparative advantage, globalized division of labor, supply-demand dynamics, and cost-benefit analysis are foundational. Policy interventions distort markets, leading to unintended consequences.
  • Politics: Acquiring and maintaining power is the primary goal. Policies must serve to 巩固 and expand the political base. Symbolism and narrative-building often matter more than 实际效果。
  • Human Nature: Self-interest, shortsightedness, emotionality, preference for simple narratives, tribalism (Us vs Them).

1. Trump Administration’s Push to Bring Manufacturing Back to the U.S.: Feasibility, Timeline, and Relevance to Trump

Feasibility:

• First Principles: The global manufacturing landscape evolved over decades based on comparative advantage and cost-benefit principles. Capital and production factors naturally flow to the most cost-effective locations. Forcing a reversal of this trend requires overcoming massive economic inertia.
• Real-World Obstacles:
  • Cost: U.S. labor, land, environmental, and compliance costs are far higher than in many developing countries. Even with tariffs and subsidies, the overall cost may not be competitive.
  • Labor: The U.S. faces a shortage of skilled industrial workers, and younger generations are less willing to work in manufacturing.
  • Supply Chains: Modern manufacturing relies on highly complex, globalized supply chains. Rebuilding a purely "American" supply chain is not only costly but also time-consuming—and in many sectors, unrealistic.
  • Automation: Even if some manufacturing returns, it’ll likely be highly automated, creating far fewer jobs than in the past and doing little to address Rust Belt unemployment.
• Conclusion: Large-scale, comprehensive reshoring is economically inefficient and fraught with difficulties. Selective, strategic reshoring—especially in sectors tied to national security, critical tech, or high value-add—is feasible. But expecting a full revival of manufacturing’s glory days defies basic economic logic.

Timeline:

• Industry relocation and supply chain restructuring are decades-long processes involving massive investments, infrastructure, worker training, and R&D.
• A four-year presidential term is far too short to see significant, fundamental results.

Relevance to Trump:

• Political Gains > Economic Results: For Trump, reshoring’s core value lies in its political symbolism and narrative power.
  • Fulfilling Promises: Appeals to his base (especially Rust Belt blue-collar workers) who yearn for a return to "glory days" and "America First."
  • Image Crafting: Positions himself as a fighter for American workers, challenging globalization elites who "sold out" U.S. interests.
  • Short-Term Wins: Even announcing a few factory relocations or blocking an outsourcing deal generates headlines and reinforces his "promises kept" image.
• Can He Benefit?
  • Politically: Yes. Successful narratives and symbolic actions can solidify his base and boost approval, even if long-term economic results are lackluster or negative. Voters often respond more to "stories" than "data."
  • Economically: Unlikely to see macroeconomic 红利 during his term. Policy lag means any benefits would likely emerge post-presidency. Poorly executed policies could even harm the economy short-term via trade wars.

2. Trump Administration’s Inflation Tolerance and the "One-Time" Tariff Inflation Myth

Inflation Tolerance:

• Political Reality: Inflation—especially in consumer goods—is political poison. It erodes purchasing power and triggers broad discontent. Historically, high inflation often costs ruling parties elections.
• Trump’s Twist: His administration may shift blame (e.g., onto the Fed, predecessors, or foreigners) and offset it with other policies (tax cuts, job growth—even low-quality jobs). But sustained, significant inflation is politically untenable for any administration. They may face a painful choice between curbing inflation or 坚持 tariffs.
• First Principles: Voting behavior is heavily driven by "wallet feelings." Persistent inflation directly worsens this.

Is Tariff-Induced Inflation Really One-Time?

• No. That’s an oversimplification.
• Direct Effect: Tariffs are taxes on imports, typically passed to consumers as price hikes.
• Indirect & Ongoing Effects:
  • Supply Chain Adjustments: Firms relocating to avoid tariffs incur costs (time, investment, efficiency losses), which persistently inflate prices.
  • Domestic Substitutes: Pricier imports give domestic producers room to raise prices.
  • Input Costs: Tariffs on raw materials/components increase downstream production costs—a continuous drag.
  • Retaliatory Tariffs: Other countries’ tariffs on U.S. exports hurt industries, potentially 间接推高 domestic prices or stifling growth.
  • Inflation Expectations: If markets expect tariffs to persist/expand, it can become self-fulfilling, fueling broader price rises.
• Conclusion: Tariffs’ inflation impact is complex, multi-layered, and persistent—not a "one-time shock." It’s like dropping a rock in a pond: the ripples keep spreading.

3. Trump’s Patriotism and Tax Behavior

• Is He a True Patriot?
  • Defining "Patriot": The term is subjective.
    • Supporters’ View: If "patriotism" means prioritizing U.S. interests over globalism/others’, challenging international 秩序 for America’s "fair share," then Trump’s "America First" rhetoric fits.
    • Critics’ View: If it requires respecting institutions, laws (including tax spirit), democratic norms, and soft power, Trump’s actions (e.g., election denial, tax avoidance) clash with traditional patriotism.
  • Reality: Behavior is multi-motivated. Trump likely blends genuine belief in a "strong" America (as he defines it), power-seeking, personal/family business interests, and political calculus. Labeling him simply "patriot" or not oversimplifies. His "patriotism" is unconventional, highly personal-branded, and politically instrumental.
  • Tax Avoidance: Legally minimizing taxes (vs. illegal evasion) is common among the wealthy. Trump’s refusal to release full returns and reported aggressive avoidance undermine his "for the people" image but don’t inherently contradict his trade policies. Self-interest 本能 doesn’t negate policy "patriotism," though it creates moral tension.

4. The Real Aims and Likely Outcomes of Trump’s Global Tariff War

Real Aims (Beyond Rhetoric):

• Core Driver: Political Survival.
  • Base Consolidation: Tariffs embody "America First," directly appealing to core voters (globalization’s "losers").
  • External Enemies: Blaming "unfair trade" and foreigners diverts attention from domestic issues (manufacturing decline, inequality).
  • Strongman Image: Confrontational trade policies project "fighting for America,"满足选民对强硬领导人的渴望。
• Secondary Goals:
  • Negotiation Leverage: Trump’s "Art of the Deal" relies on extreme pressure. Tariffs are blunt but effective tools to extract concessions.
  • Industry Protection: Shielding sectors like steel/aluminum wins their support.
  • Personal Belief: He may genuinely think the U.S. gets a "bad deal" in global trade, needing 强硬 correction.
• Blind Spots: Likely underestimates global interdependence and backlash, and overestimates U.S. leverage to 改变 others’ core interests.

Likely Outcomes (MECE Breakdown):

• Economic:
  • Higher Trade Costs: Tariffs disrupt supply chains, reduce efficiency.
  • Inflation: As above.
  • Growth Slowdown: Uncertainty dampens investment/consumption.
  • Winners & Losers: Protected industries gain short-term; trade-reliant sectors (agriculture, autos, tech) and consumers lose.
• Financial Markets:
  • Volatility: Unpredictability spikes market nerves.
  • Risk Asset Pressure: Equities suffer during escalations.
  • Safe Havens: Gold，美元 (short-term)，某些 bonds benefit.
  • "Crash" Risk: Full-blown trade war could trigger turmoil, especially if 叠加 debt/bubble vulnerabilities—but more likely prolonged 震荡.
• Geopolitical:
  • Strained Relations: Tensions with China, EU, Canada, Mexico, etc.
  • Weakened Global Governance: WTO authority erodes; cooperation declines.
  • Multipolarity Acceleration: U.S.-China rivalry intensifies; alliances tested.
  • U.S. Soft Power Erosion: Unilateralism damages leadership 形象。
• Structural Shifts:
  • Supply Chain Regionalization: Firms diversify away from China—but to Vietnam, Mexico, India, not mass U.S. reshoring.
  • Tech Decoupling: Trade and tech wars reinforce each other.

Final Insight:

Trump’s trade policies—reshoring and tariffs—are politically driven, serving his brand, base, and power logic. They rely on 简化 narratives and 短期 political wins, often ignoring economic laws, long-term consequences, and global complexity. Results will likely be more symbolic than substantive, with political gains offset by economic costs, and 短期 disruptions triggering 长期 structural shifts. Mass reshoring is unrealistic; tariff inflation isn’t one-time; motives mix politics, belief, and deal-making. The ultimate outcome? A complex, messy reshaping of global economics and politics—not a simple "win" or "loss."

Interesting read. How do you think this "circus" will end??