#296 David Woo on the Macro Trade Everyone's Missing: What the US-China Trade War Is Really About

Macro trends blogger and economist David Woo @DavidWooUnbound, CEO of David Woo Unbound, a global forum devoted to the promotion of fact-based debates about markets, politics, and economics, joins Julia La Roche on episode 296 to discuss the trade war, AI, and markets. Sponsors: Monetary Metals. https://monetary-metals.com/julia In this episode, Woo warns that the US economy is heading toward stagflation as tariff impacts finally materialize, with holiday shopping expected to be weak due to consumers having front-loaded purchases in anticipation of price increases. He argues the US is now in a weaker position versus China in the tech war, as China has survived Trump's tariffs through factory automation and AI integration while US manufacturing continues shedding jobs even in protected sectors. Woo is short NASDAQ heading into November 1st, when China's rare earth export restrictions take effect, believing the market has mispriced both the AI bubble (with companies like OpenAI spending unsustainably while hitting technology plateaus) and the intensifying US-China showdown over AI supremacy—calling this "the macro trade of our generation." Woo, the former head of Global Interest Rates, Foreign Exchange, Emerging Markets Fixed Income Strategy & Economics Research at Bank of America, is known for some of his bold and contrarian calls, including Trump winning the presidential race in 2016 (https://www.cnbc.com/2016/12/08/bofaml-analyst-got-ovation-from-co-workers-the-morning-after-election.html), and that the 2020 US presidential election would be much closer than expected and the results contested (https://www.afr.com/policy/economy/the-dangerous-groupthink-stalking-wall-street-20210909-p58q48). Links:   Youtube: https://www.youtube.com/@DavidWooUnbound Website: https://www.davidwoounbound.com/ Twitter/X: https://twitter.com/Davidwoounbound Timestamps: 0:00 Welcome David Woo back to the show 0:54 Big picture macro view and difficult 2025 3:08 Why tariffs haven't impacted economy yet 6:09 Consumer spending as preemptive buying 9:16 Holiday shopping weakness ahead 10:05 Gen Z consumer struggles 12:05 Stagflation thesis explained 14:28 Manufacturing job losses in protected sectors 16:43 Who's benefiting from tariffs? 18:05 US-China trade war positioning 21:52 China's factory automation advantage 23:54 US vs China AI strategies 26:44 The race for AI dominance 29:31 The macro trade of our generation 32:01 Jensen Huang: China "nanosecond behind" 34:22 September 29th export sanctions expansion 35:51 November 1st deadline explained 36:27 What would you tell Trump administration? 38:37 Shorting NASDAQ and AI bubble thesis 40:01 OpenAI's revenue vs spending problem 43:44 Technology plateau concerns 46:09 AI bubble meets US-China tensions 47:06 Risk management for short positions 49:15 Key catalysts: November 1st & earnings guidance 52:31 What keeps David up at night 53:13 Tomahawk missiles to Ukraine concern 55:03 Final thoughts and where to find David