China s economy grew at 5.4% in Q1, adding 400 billion to GDP, according to media despite Trump s tariff warfare.
Meanwhile, the US economy shrank by O.3%, which represents about 24 billon dollars, according to media.
https://www.cbsnews.com/news/gdp-report-today-trump-tariffs-economy-first-quarter-2025/
https://www.counterpunch.org/2025/05/12/q1-china-adds-more-than-400-billion-to-gdp-trump-loses-25-billion/
While Trump s rollback of tariffs on China to 30% was welcomed by US stock markets, businesses and consumers must brace for more uncertainty. It is not clear what will happen when the 90 day reduction on tariffs agreed by Scott Bessent and his Chinese counterparts in Switzerland at the weekend ends.
Will there be tariffs? How high? On which products? Will China resume trade with the USA or expand its trade partnerships with South America?
"The 30% tariff for 90 days will start goods flowing again for small businesses,” said Bruce Kaminstein, a member of NY Angels and founder and former CEO of cleaning products company Casabella. But the reprieve for small businesses will not eliminate their larger worries. “They are being held hostage to an erratic policy. Businesses are in difficult situations, so they will make this work somehow as they always do,” he said.
https://www.cnbc.com/2025/05/12/trump-china-trade-deal-tariff-pause-new-surge-in-freight-shipments.html
In a sign of a long term change in global trade alliances, China is building new megaports in South America.
Chinese officials said "they can easily drop U.S. crop imports and still hit their 5% growth target this year as well as ensure enough agricultural products from Brazil and , Argentina to replace US food supplies.
China is also expanding its use of hydroponics to produce crops in arid areas in a revolution in agriculture.
"In recent years, Xinjiang has attached great importance to the development of facility agriculture, including smart farming. As of 2023, the region had more than 1.2 million facility agriculture units, involving a vegetable plantation area exceeding 44,600 hectares in total, according to local department of agriculture and rural affairs, " reports Xinhua.
https://www.chinadaily.com.cn/a/202505/13/WS6822aa34a310a04af22bef2f.html
It is possible that China will be able to supply most of the food it needs to feed its population using hydroponics to completement traditional agriculture in the next ten years.
Thanks to its system of printing free cash for businesses, China can encourage a vast investment in research and businesses using hydroponics without adding debt.
By contrast, US businesses must face the trade crisis with little or no cash reserves or free gov funding to bring domestic supplies online.
The weakening real world economy risks a stock market implosion.
The way the stock market prices bear no relation to fundamentals was illustrated when Tesla shares soared, at least temporarily, after the China deal despite Tesla s increasingly dire position also due to new competition from China.
There is a real risk the US stock market bubble could bust and could suffer a drop of 80% as during the dot com bubble.
100s of billions have been bet on AI, a bet which may turn out to be a loser if ChatGPT is anything to go by.
The cost of US debt could continue to soar due to the risks of recession and inflation, adding to the interest payments for the Fed government.
https://finance.yahoo.com/news/safe-haven-concerns-mount-us-115618564.html
The US dollar could become very weak making imports very expensive.
Could Trump go down in history as the president who destroyed the US dollar and economy and living standards?
From media
"Tesla, Elon Musk’s electric vehicle company, is going through a rough patch lately. The company which was once seen as a beacon of the EV revolution is now going through a phase marked by increased competition and financial pressures. Tesla, even though it is hailed for its technological prowess, seems to be overshadowed by a slew of Chinese EVs that are making a splash.
...
Today, Chinese EVs rival Tesla in both tech and scale. They are expanding, and with the kind of amenities and features being offered at competitive prices, Chinese EVs are reshaping the global EV industry. Here is a closer look at the top EV brands in China that are rivalling Elon Musk’s Tesla.
https://indianexpress.com/article/technology/tesla-chinese-ev-brands-giving-sleepless-nights-to-elon-musk-9990614/
Tesla Stock Is Falling. Chinese Sales Drop and Trump Plans to Kill EV Credit.
https://www.barrons.com/articles/tesla-stock-falls-china-trade-ev-credit-trump-12dda049
From media
Donald Trump is not very good with arithmetic, but that is not a reason the rest of us should not use it. The US economy shrank at 0.3 percent annual rate in the first quarter. This figure needs the usual caveats. This is preliminary data that may be revised substantially in the next two months. It also was a very quirky report, with a huge surge in imports dwarfing everything else, as households and businesses stocked up in advance of Trump’s tariffs taking effect.
Meanwhile, it seems China’s economy remained on a healthy growth path in the first quarter, reportedly growing at a 5.4 percent annual pace. This number also needs some qualifications. China’s growth figures are always somewhat suspect.
https://www.counterpunch.org/2025/05/12/q1-china-adds-more-than-400-billion-to-gdp-trump-loses-25-billion/
Chinese officials on April 28 said they can easily drop U.S. crop imports and still hit their 5% growth target this year. Brazil—and, to a lesser extent, Argentina—would fill the void, according to analysts tracking agricultural markets.
Brazil benefited from global trade tensions during President Trump’s first term, displacing U.S. exports to China. Between 2017 and 2024, China increased imports of Brazilian soybeans 35% to 73 million tons, while cutting imports of U.S. soybeans 14% to 27 million tons, according to the Center for Strategic and International Studies in Washington.
“You only have to see what happened in the first Trump administration,” said Cláudia Trevisan, head of the Brazil-China Business Council. “Trump imposed tariffs on imports from China, China retaliated, and Brazil increased its exports to China of products that the U.S. also used to supply, mainly soybeans.”
By 2023, Brazil accounted for about a quarter of Chinese agricultural imports, while the U.S. share had dropped to about 14%, government data show. Brazil now supplies about 70% of soybean shipments to China. About 30% pass through Santos, with smaller shares sent through Paranaguá and the northern ports of Itaqui and Barcarena.
....
China Is Building Megaports in South America to Feed Its Need for Crops
The decrepit port in this Atlantic coast city is the main gateway for South American exports of soybeans and other agricultural goods that represent China’s only viable alternative supply to U.S. exports. Though China has reduced its reliance on U.S. foodstuffs, crops are still among the top U.S. exports to China.
China’s state-owned agricultural conglomerate, Cofco, is building its biggest export terminal outside China at the port to manage shipments of corn, sugar and soybeans. It would increase the company’s annual export capacity to 14 million tons from 4.5 million, but isn’t expected to reach full capacity until next year.
The Santos port fits into China’s wider plan to secure access to South America’s agricultural bounty amid shortages of water and arable land at home. Chinese companies are laying hundreds of miles of railroad across Brazil’s agricultural heartland and finishing work on a $3.5 billion deep-water port on Peru’s Pacific coast.
The trade war with the U.S. has heightened the urgency of these projects. Chinese leader Xi Jinping met South American leaders including Brazilian President Luiz Inácio Lula da Silva in Beijing on Monday to discuss their deepening ties.
https://www.hindustantimes.com/world-news/china-is-building-megaports-in-south-america-to-feed-its-need-for-crops-101747107253236.html
URUMQI — In the arid hinterlands of Northwest China, where barren expanses dominate the landscape, a high-tech greenhouse is defying local harsh conditions, producing vibrant greens and sweet strawberries year-round with minimal water and zero pesticides.
The smart farm built last May in Kuqa of Xinjiang Uygur autonomous region with funding from Ningbo, Zhejiang province of East China, uses hydroponics and automated climate control to grow leafy greens and strawberries unaffected by the dry, dusty surroundings of the Taklimakan Desert, the world's second-largest shifting sand desert.
The indoor farm of nearly 7,000 square meters is part of China's push to modernize rural economies through tech-aided agriculture with Xinjiang, where deserts cover 25 percent of the land as a key testing ground.
Inside the plant factory, rows of spinach, lettuce and ruby-red strawberries thrive under glass, their roots bathed in nutrient-rich water instead of soil. Sensors adjust temperature, humidity and irrigation automatically, while workers monitor data dashboards — a far cry from traditional farming in this snow-melt-dependent region.
Local farmer Eli Kerim has a part-time job there, managing roughly 0.27 hectares of strawberries.
...
"We tailor crops to market demand. Our first strawberry harvest sold out instantly," says Zhang Yaping, manager of the greenhouse. The greenhouse provides 26 jobs and is expected to boost annual incomes by 40,000 yuan ($5,554) per worker while paying 700,000 yuan in collective rent and sweet equity dividends to a local village a year.
Li Xiandong, an associate professor at the College of Economics and Management of Xinjiang Agricultural University, sees broader potential. Such smart agricultural facilities could significantly increase the planting area and yield of crops and help drive the industrial upgrading of the surrounding areas, he says.
At another agricultural demonstration zone in northern Xinjiang's Changji Hui autonomous prefecture, leafy vegetables like amaranth are planted in 10-layer vertical racks that can rotate 360 degrees, ensuring crops absorb sunlight evenly and efficiently increasing the utilization of space. For climbing plants such as tomatoes, vines sprawling as long as 13 meters are hung over a rope beneath the glasshouse ceiling and roots are immersed in nutrient solutions, maximizing their exposure to sunlight and fertilizer.
Senior agronomist Yan Ji stands on a hydraulic vehicle that can be lifted vertically or moved laterally on a rail, thus allowing him to easily prune side stems and leaves, or harvest tomatoes. "Here we do most of our work in a standing posture, and seldom bend at the waist or squat for a long time," he says. "High-tech relieves us of heavy manual labor."
Yan notes that the factory's cultivation uses a reasonable combination of artificial and natural light, a mix of nutrients based on scientifically determined proportions, and an isolated environment that reduces the impacts of diseases and pests. "As a result, our tomatoes are of fine quality, enjoy higher yields and sell at better prices," Yan says. According to him, the harvest season lasts from October to July, with a daily output exceeding 300 kilograms.
https://www.chinadaily.com.cn/a/202505/13/WS6822aa34a310a04af22bef2f.html
Another surge in trade from China to the U.S. should be getting underway, according to retailers and logistics executives, as the initial trade deal struck by the U.S. and China leads importers to move forward with shipments during the 90-day pause on the steepest tariffs implemented by President Donald Trump.
On Monday, the U.S. and Chinese governments announced a trade deal, though the details of the U.S.-China pact are still sketchy. But in the short term the most important aspect of the agreement is the suspension of the so-called reciprocal tariffs, though broad-based 10% duties will remain in effect, as well as a 20% tariff related to fentanyl.
“I have clients with thousands of containers pre-loaded in China that is ready to come in,” said Paul Brashier, vice president of global supply chain at ITS Logistics. Over the next four to six weeks, he expects a surge of containers, calling the 90-day pause “the pivotal moment for supply chain planning out of China.”
“The 30% tariff for 90 days will start goods flowing again for small businesses,” said Bruce Kaminstein, a member of NY Angels and founder and former CEO of cleaning products company Casabella. But the reprieve for small businesses will not eliminate their larger worries. “They are being held hostage to an erratic policy. Businesses are in difficult situations, so they will make this work somehow as they always do,” he said.
https://www.cnbc.com/2025/05/12/trump-china-trade-deal-tariff-pause-new-surge-in-freight-shipments.html
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