This episode explores the escalating US-China trade war and its implications for the global economy, alongside the formation of a new German coalition government and its potential impact on European stability. Against the backdrop of a 145% US tariff on Chinese goods and a retaliatory 125% tariff from China, the discussion analyzes the significant trade volume between the two nations ($580 billion in 2024) and the US trade deficit as a key driver of the conflict. More significantly, the analysis delves into China's retaliatory strategies, including export restrictions on rare earths and the "unreliable entities list," impacting US companies like PVH. The likelihood of a swift resolution is deemed low due to differing expectations and China's diversified trade relationships. In contrast, the formation of Germany's new coalition government under Friedrich Merz is examined, highlighting the compromise between the initial campaign promises and the coalition deal. The episode concludes by considering the interconnectedness of these events, emphasizing Germany's export-dependent economy and its vulnerability to trade wars, while also noting the need for a strong German voice in European and global affairs.
