China agrees to negotiate a deal with the US to end the tariff crisis.

Nomura estimates that Chinese exports to the US fell more than 50% in April, with a "direct negative shock" of -1.1% of GDP, and unemployment of 5.10 million jobs that could climb to 15.8 million over the rest of the year.

Societé Génerale notes that Chinese sales to the US plummeted by more than 70% in April, with a "direct negative shock" of -2% to GDP, resulting in job losses of more than 20 million.

All of this is the result of the special 145% tariff imposed on China by Donald Trump, which has closed off access to the world's largest consumer market, the United States.

The World Trade Organization (WTO) warns that Chinese exports to the US will plummet 77% in 2025, after reaching US$440 billion the previous year; and COSCO, China's largest shipping company, points out that the volume of containers with goods destined for the US market fell 13% in the first three weeks of April and is expected to decrease by 22% in the month.

That's why, according to Goldman Sachs, 16 million manufacturing jobs are expected to be lost in China this year, and 9,000 factories will close in Guangdong province alone.

The export-oriented manufacturing sector stretches across southern China in an arc from Shenzhen to Shanghai, encompassing the extremities of the giant industrial hinterlands located in the Pearl and Yangtze River basins.

There, more than 1.5 million manufacturing companies produce and sell to the world, all with advanced technology and highly qualified personnel, enjoying cheap and abundant energy and readily available credit. Their extremely high level of productivity (comparable to or higher than that of the United States) is the result of fierce competition, encouraged and supervised by a Party-state with a long-term strategic vision.

In short, it's safe to say that Chinese manufacturing activity has contracted as Trump's 145% tariffs take effect; this is what caused the People's Republic's manufacturing activity (as measured by the PMI) to fall to 49 points in April, its lowest level since December 2023.

U.S. Treasury Secretary Scott Bessent warned 20 days ago that it was "unsustainable" for the world's two largest economies to keep their respective domestic markets closed, adding—in the opinion of Trump's right-hand man—that China was hurt more than the U.S. by this unprecedented situation.

China, Bessent argued, exported five times more to the US than US sales to the People's Republic; and therefore, it would be forced to lay off workers and close manufacturing companies, something that hadn't happened since 1978 (when Deng Xiaoping overturned the system to capitalism).

The ability to open or close the US domestic market, the world's largest consumer market, is Trump's trump card , and he knows it . Therefore, time is on his side and against the People's Republic.

China, for its part, lacks an alternative market because all the others, with the European Union in the first place, have reached a saturation point due to the monumental export avalanche of the People's Republic, whose superior productivity and lower costs make it unbeatable today in the globalized capitalism of the 21st century.

Hence, negotiations between the two superpowers are essential. Given this imperative demand of the reality of things, the question of who gives in first, or who calls the other first, is an irrelevant minutiae in the great strategic game of the age.

Symptomatically, and unanimously, last week all the media outlets in the People's Republic expressed that the time had come to negotiate with Trump.

They pointed out as a positive factor that the US economy contracted -0.3% in the first three months of the year. They only needed to add that imports increased 41% in March, with an extraordinary rise in the trade deficit to -US$162 billion. This was due to the widespread advance of purchases from China by US importers to avoid the special 145% tariff that would go into effect in April. Once again, it is proven that history is not a contest of arguments, but a struggle of realities and needs.

These statements by the Chinese press, endorsed by the Ministry of Commerce, triggered a jump on Wall Street of more than 3%. The same trend was repeated in Europe and Asia, resulting in the recovery of virtually all of the stock market assets lost since April 2nd, and symptomatically, the usual predictions of an imminent American "recession" disappeared.

In short, negotiations between China and the US are now beginning, which should culminate in a direct agreement between Donald Trump and Xi Jinping.

The greatest lesson of history is always the events guided by reason, that is, properly narrated: the greatest lesson of history is history itself.