Why China, Why Not Vietnam

Only a world-systems perspective can answer that question rationally.

Treasury Secretary Scott Bessent made a big economic speech on Tuesday trying to calm troubled markets, privately addressing a JP Morgan Chase investor summit.

He may or may not have bought time for market stability, but his remarks confirm what to my mind is close to the worst-case scenario: The sane capitalists in Trump’s midst are terrified, see a not-too-distant future of full decoupling from China, and know that such a scenario will end up worse for the US than for China.

Accordingly, Bessent said that:

there will be a de-escalation…The next steps with China are, no one thinks the current status quo is sustainable at 145 and 125 [percent tariff rates].

Put aside for now the bizarre and embarrassing reality that Trump unilaterally (and arbitrarily) escalated tariffs on China to 145% and is now being compelled by Wall Street to unilaterally de-escalate those tariffs to a lower level (rumors are around 50%). China defiantly responded tit-for-tat, meaning Trump basically created a situation for himself in which he would have to back down. Genius.

The more important remark from Bessent was that: