"America's tariff move under Trump is a symptom of mass psychosis. But I think China's response is a huge gamble that the psychosis can be broken with careful application of pain - before that pain hurts China even more.

There is some hope that they'll revolt against Trump if things get bad enough, the way there's some hope for democracy in China, I suppose. But at the same time, I don't know that China's aggressive response is going to politically move things in that direction, because it's so easy for the nationalists to rally around the flag - regardless of the economic pain they're experiencing. China itself knows this and leverages it with its own nationalists. And this response is going to cost China dearly."