The 90-day clock is ticking
Also trade wars, fake offices, and Europe’s quiet wins
Grüezi!
Switzerland’s sweltering at 31°C in mid-August.
Washington and Beijing just bought themselves 90 more days before tariffs hit triple digits.
The extension keeps US tariffs at 30% and Chinese at 10%.
Fear beats strategy when everyone’s running scared.
1. Tariff Theatre: The 90-Day Intermission
Trump signed extension hours before midnight deadline
Without pause, tariffs would’ve soared into triple digits
Container ships take 34 days from China to US shelves
The deadline was purely a calendar calculation, not diplomacy. America runs on 30-day inventories – efficient until they’re not. Miss the August deadline and consumers face empty shelves by Thanksgiving. No US politician wants that.
So both sides cut a deal. Trump signed at the last possible hour. Washington gets holiday inventory relief. Beijing gets breathing room to redirect exports. July shipments to America fell 21.7% – the fourth straight monthly decline. Vietnamese ports are bustling; Mexican warehouses expanding. The pivot is happening.
Former Obama Trade Rep Michael Froman nailed it in Foreign Affairs:
“The global trading system is dead.”
On Sunday, Trump demanded China “quadruple soybean purchases.” Chicago futures spiked immediately. Beijing gets the game: buy Iowa’s crops to keep Shenzhen’s factories running.
Beans for electronics isn’t exactly the economy Trump promised.
The figures reveal how phoney this peace is. In April, US tariffs hit 145% while Chinese retaliation reached 125%. May’s truce brought rates to 30% and 10%. Both sides claim victory whilst stockpiling for November.
Watch Long Beach port volumes. Normal traffic: 600,000–700,000 TEUs monthly. When it spikes to 800,000, importers are panic-buying at 30% to avoid 145%. The peace expires, and everyone knows it.
2. Silicon Shakedown: Protection Money Goes Digital
Nvidia CEO met Trump, agreed to 15% revenue share
Applies to H20 and AMD’s MI308 chips only
Bernstein estimates $23bn from 1.5 million H20 units
Jensen Huang’s White House visit changed the game. Trump’s opening: “If I’m giving you a release, I want you to pay us something”. They started at 20%, settled at 15%.
Christopher Padilla, who ran export controls for Bush, explained it for the rest of us:
“This seems like bribery or blackmail, or both.”
He’s right. Export controls are meant for national security, not revenue. But companies would rather put their hands in their pockets than challenge this administration. With $23bn in potential revenue, you pay the toll and move on.
Beijing’s response? The Cyberspace Administration hauled in Tencent, ByteDance, Baidu. Why buy American H20 chips when domestic alternatives exist? Officials suggested US licensing might require surrendering client data. State media called the chips “obsolete and insecure.”
Nvidia’s China business is now squeezed between two governments demanding their cut.
Pharmaceuticals will be next. Then satellites. Medical devices. Any sector needing export licenses is asking to become a revenue stream.
3. Fake It Till You Make It: China’s Employment Theatre
Workers pay 30–50 yuan daily for fake office access
Average age 30; 40% are recent graduates
12.2 million new graduates enter annually
The “Pretend to Work Company” operates in Dongguan, Shanghai, Shenzhen, and elsewhere. Pay 30–50 yuan daily; get a desk, WiFi, coffee, sometimes lunch. Premium packages include fake internship certificates and LinkedIn photos.
The owner, “Feiyu,” lost his retail business during lockdowns. To get back on his feet he bought empty office space and now sells “the dignity of not being a useless person.” His customers aren’t kids – average age 30, youngest 25. Career refugees, not fresh graduates.
Take Shui Zhou, 30, whose food business failed in 2024. He pays daily to sit with five “colleagues.” “It makes me happy,” he says. “Like we’re working together.” He’s using the time to learn AI skills. Simulation as preparation for something that might never come.
Youth unemployment hit 21.3% in June 2023. The government stopped publishing data, then resumed with changed methodology – students no longer counted. Now they claim 16.5%. Meanwhile, 12.22 million graduates enter annually. The economy creates delivery jobs and ride-sharing gigs.
Forty per cent of clients are recent graduates needing internship photos. Universities require proof; parents want evidence of educational ROI. The fake office provides both. Everyone saves face.
China calls them “flexible employment professionals” – the same category as Uber drivers. Not unemployed, just flexibly employed. In offices that don’t exist. Today’s graduates risk becoming tomorrow’s 30-year-olds renting dignity by the day.
4. Europe’s Quiet Win: Sovereignty in Orbit
Ariane 6 launched MetOp-SGA1 satellite
Third successful launch after years of dependence
Sentinel-5 measures every atmospheric gas that matters
While others screamed about tariffs, Europe did something sensible. Tuesday at 21:37, Ariane 6 lifted off from Kourou. Sixty-four minutes later, a 4-tonne weather satellite settled into polar orbit. No threats, no tweets, no drama. European hardware doing European work.
For years, Europe’s orbital access meant choosing between Musk and Moscow – embarrassing and increasingly dangerous.
This was Ariane 6’s third flight, its second commercial mission. The rocket matters less than its cargo. MetOp-SGA1’s Sentinel-5 measures everything: methane, nitrogen dioxide, carbon monoxide, aerosols. European sensors collecting European data for European use.
Phil Evans at EUMETSAT spelled it out:
“Extreme weather has cost Europe hundreds of billions of euros and tens of thousands of lives over 40 years.”
Better forecasts save lives. Climate data drives agricultural futures. Insurance models need atmospheric measurements. Carbon markets require emissions monitoring. All running through European hardware nobody can sanction, price-gouge, or deny.
Data sovereignty requires launch sovereignty. Europe quietly built both whilst Washington and Beijing were distracted.
5. Deflation’s Trap: China’s Maths Problem
Consumer prices falling since February
Interest rates held above 3% protecting yuan, not growth
Manufacturing investment outpaces GDP whilst consumption flags
Beijing cut its inflation target from 3% to 2%. Reality: prices falling everywhere. Producer prices down. Export prices down. Asset prices would collapse if they hadn’t frozen property markets. Classic deflation spiral with Chinese characteristics.
They’re holding rates above 3% despite deflation – defending the yuan, not fighting price collapse. Bank margins matter more than growth; currency stability beats domestic demand.
The trap: fiscal stimulus services local government debt, not development. State funds build factories, not social programmes. Credit expands manufacturing whilst household income shrinks.
Result: private consumption at record-low GDP share. Household savings astronomical – people fear illness, age, unemployment.
Current leadership won’t budge. Welfare expansion dismissed as “welfarism” – more Thatcher than Mao.
Maths doesn’t care about ideology, but ideology refuses to care about maths.
6. Oil Games: Resource Control Replaces Markets
Beijing froze fuel prices citing technicalities
Russia cut exports 6.6% through “maintenance”
IEA sees supply glut nobody believes
On 12 August, Beijing’s energy bureaucrats announced: no fuel price adjustment. International crude fell, but the ten-day average stayed under their 50-yuan-per-tonne threshold. Article 6 kicked in. Prices frozen.
Massive subsidy disguised as regulatory procedure. Domestic prices stable as global markets swing. Chinese industry gets predictable costs. Treasury pays the difference.
Russia plays harder. July exports fell 6.6%. Arctic shipments collapsed 42%. Moscow claims “maintenance” took 26% of refinery capacity offline. Russia’s rationing diesel before winter. European heating dependency becomes leverage when temperatures drop.
IEA publishes fantasy forecasts: supply growing 2.5 million barrels daily, demand just 680,000. Two million extra barrels should crater prices.
Saudi Arabia needs $80+ for its plans. Russia needs every dollar for its war machine. China needs cheap energy but won’t threaten its strategic partner. America needs low prices through November, but not so low shale producers collapse.
No price works for everyone. IEA’s curves are meaningless. Control wells, set prices. Own refineries, make rules. Have pipelines, dictate terms. Physical control beats paper contracts.
7. The Cascade: When Everything Breaks at Once
98% probability of Fed rate cut next month
Each solution creates tomorrow’s crisis
Smart money already looking for the door
This summer everyone’s reacting to nightmares, nobody’s planning. Washington fears pre-November recession. Beijing fears its future. Moscow fears insolvency. Everyone else fears irrelevance.
Each fix breaks something else. Tariff pause triggers stockpiling, guaranteeing shortages. Chip tribute precedents pharmaceuticals. Chinese deflation forces export dumps, triggering more crises.
Foreign investors hold $16tn in US equities. They’re watching and quietly seeking exits. When Fed credibility goes, the dollar follows – not immediately, but smart money moves first.
The breakdown scenario: China misses purchasing targets. Tariffs snap to 145%. Fed panics, cuts despite inflation. Dollar drops. Oil spikes on “maintenance.”
China faces impossible squeeze: domestic deflation, but energy costs soaring in weakening dollars. Factories need cheap energy; energy’s expensive whilst selling prices drop. Margins evaporate. Only solution: dump products cheaper abroad, triggering more tariffs.
Revenue-sharing spreads – pharmaceuticals, devices, satellites. Every company pays for access. Supply chains shatter.
Capital flees to havens. Asian currencies collapse sequentially – won, baht, rupiah. Black-market rates diverge from official quotes. Governments require import licenses tied to tributes. Container shipping collapses as trade becomes bilateral barter.
Of course, everyone’s too smart to let this nightmare happen, so relax and enjoy the holiday!
Thanks for reading!
Best
Adrian
