Using a milk tea shop as a metaphor for tariff policy: his initial goal was only China.

Bitcoin is not a gambler’s lottery ticket, but a lifeboat for the sober.

Written by: Bai Ding

On April 9, 2025, the global financial markets experienced a dramatic turning point — the beautiful country suddenly announced a suspension of tariff increases on other countries, targeting only China: imposing a 125% tax solely on China. This “tariff showdown” completely tore away the last veil of globalization. Some say the new cold war has begun.

Traditional Arts: “Precision Strike” to the World’s No. 2

This round of tariff war seems to be Trump’s “capricious move”, but in fact, it is a precise strike by the Beautiful Country against the “world’s second”. History is always surprisingly similar—during the 1980s, Japan rose with its automotive and electronics industries, and its GDP once reached 70% of the Beautiful Country’s. The Beautiful Country then forced Japan to sign the Plaza Accord, leading to the appreciation of the yen, a collapse in exports, and the economy fell into the “lost thirty years”. The script is almost replaying itself today, only the protagonist has changed to China. The Trump team has publicly stated: “China is like Japan back then, but with a larger scale and stronger ambitions, and we must lock down its development space before it surpasses the Beautiful Country.”

Unlike Japan, China holds a trump card: a consumer market of 1.4 billion people. However, the situation is still not optimistic. China is a country with overcapacity, so it heavily relies on exports. The cruel aspect of the tariffs imposed by the beautiful country is that it no longer fights alone, but instead builds an “anti-China alliance” by testing and diversifying its allies, aiming to cut off China’s exports. For example, German car companies quickly announced a reduction in their dependence on Chinese supply chains after receiving tariff exemptions; Mexico seized the opportunity to take away China’s textile orders. This “boiling frog” style encirclement is more lethal than a direct confrontation.

The true goal of the beautiful country is to stifle the path of China’s industrial upgrading by curbing exports. New energy vehicles, photovoltaics, semiconductors—these core industries that have been taxed are the key areas for China to transition from a “world factory” to a “technological power.” If these industries are suppressed, China may be forced to remain in low value-added segments for a long time, repeating Japan’s “lost thirty years” fate.

The Dilemma of the Milk Tea Shop

To understand the impact of this tariff war on ordinary people, we might as well use a milk tea shop as an analogy.

Suppose the milk tea shop you operate is suddenly targeted by the dominant player in the neighboring business district, who claims “Your milk tea uses my exclusive recipe - brown sugar pearls.” Not only do they forbid customers from coming to your shop, but they also threaten other milk tea shops not to source ingredients from you. At this point, you have three options:

Option One: Adventure Open

You decide to open the ingredient formulas of all milk tea shops that do not comply with the overlord for free, even allowing them to sell their own products directly in your store. In the short term, the milk tea shops on this street may be moved by your sincerity and seek cooperation with you by bypassing the overlord. But the risks are obvious: risk of formula leakage: other milk tea shops may steal your core technologies (such as new energy batteries, 5G patents) and turn into competitors.

Employee Unemployment: External “support” from other milk tea shops may squeeze out your long-time employees (local businesses).

Funding Chain Break: The cost of free supplies may drain your cash flow (pressure on foreign exchange reserves).

The real case is right in front of us: when China joined the WTO in 2001, the automotive industry was fully opened, and German Volkswagen and American General Motors drove straight in. Twenty years later, although domestic cars have begun to surpass, 90% of local brands were eliminated during this period, and millions of workers experienced a wave of layoffs.

Option Two: Enduring Innovation

You bowed to the overlord in public, promising not to use the “controversial formula,” but secretly developed a more powerful “Brown Sugar Pearl 2.0” in private. This strategy once helped you evade a disaster in 1999 (when the beautiful country bombed the Chinese embassy in the Federal Republic of Yugoslavia), but the environment is now completely different:

Customer Trust Crisis: Regular customers (domestic public) feel that you “lack backbone,” resulting in customer emotional backlash.

R&D costs soar: Not only do we have to deal with the scrutiny of the giants, but we also need to secretly innovate, facing enormous financial pressure (technology sanctions have caused a surge in the prices of key components like chips).

Time waits for no one: If the overlord discovers that you are still up to no good, they may directly smash your shop (upgrade sanctions).

After Huawei was sanctioned, its mobile business dropped from the second largest in the world out of the top five, forcing it to invest hundreds of billions in the research and development of Kirin chips. This process has supported the Chinese semiconductor industry chain, but it has also led to a 40% increase in mobile phone prices, forcing consumers to foot the bill.

Option Three: No Movement

You are neither open nor innovative, watching helplessly as customers are driven away by the monopolists. Soon there will be:

Ingredient Accumulation Expired: The finished milk tea (excess production capacity) has no buyers and can only be poured down the drain (business bankruptcy).

Employee Collective Wage Demand: Store clerks who have lost income (unemployed population) may block the store entrance to protest (social unrest).

Taking Risks: To shift the conflict, you suddenly report the street vendor next door for using gutter oil (creating external conflict), which results in an attack from the whole street (international isolation).

In the early stages of the China-U.S. trade war in 2018, an overseas trade factory saw its orders plummet by 50%. The owner fled overnight, and 3,000 workers surrounded the government to demand their wages, ultimately forcing the local government to cover the losses.

Assuming I am the owner of a milk tea shop. If I must choose, I would rather take a gamble - open the country to welcome foreign investment competition, even if local enterprises get hurt, even if the financial system gets impacted, but at least I have the initiative in my hands, winning or losing is all part of the game; if the cost is too high, I can also grit my teeth and compromise, like twenty years ago when I endured and built up strength, temporarily bowing my head for twenty years of economic takeoff; my worst choice is to neither dare to open up nor have the strength to fight back, ultimately being pushed into a dead end by overcapacity and a wave of unemployment.

No matter which path you choose, ordinary people must be prepared for the following: imported cars and iPhones may increase in price by 30%, and domestic new energy vehicles will take the opportunity to raise prices; layoffs in foreign trade, real estate, and education training industries are intensifying. In summary, the purchasing power of cash will definitely decline. The feeling that comes to you is: why are things expensive again?

Safe-Haven Assets

As the great power game escalates, traditional safe-haven assets have shown signs of fatigue: the price of gold fluctuates at high levels after breaking through 2500 USD / ounce, the yields of government bonds have been distorted due to central bank intervention, and even the Swiss franc is no longer absolutely safe due to the UBS crisis. Perhaps at this moment, we can turn our attention back to Bitcoin, which always remains above 80,000.

Bitcoin is not directly controlled by the policies of any country. When the RMB exchange rate plummeted due to the tariff war, Chinese investors frantically purchased USDT (a crypto stablecoin pegged to the US dollar 1:1), indirectly pushing up the price of Bitcoin; retail investors in the beautiful country, concerned about the depreciation of the US dollar, directly used Bitcoin as a hedge. This cross-border, spontaneous consensus has made Bitcoin the only asset unaffected by geopolitical influences.

Russian exporters utilize Bitcoin to settle oil trades, bypassing the SWIFT system blockade; Chinese cross-border e-commerce pays Southeast Asian suppliers with cryptocurrency to avoid exchange rate losses. Even some national central banks are quietly increasing their holdings of Bitcoin as foreign exchange reserves — Salvadoran President Bukele openly stated: “Bitcoin is our shield against dollar hegemony.”

In countries with a shortage of US dollars such as Egypt and Pakistan, Bitcoin has become a hard currency for informal trade. Despite the volatility, in regions where fiat currency credibility has collapsed, people would rather endure the fluctuations than hold worthless paper. This underlying demand is reshaping the value logic of Bitcoin.

Putting those aside, let’s return to the fundamental issue: assets with a fixed supply and suitable for storage are inherently suitable as safe-haven assets and as a means of value storage in the economic system. Gold is, and Bitcoin, due to its immutable programming, even more so.

Asset Allocation Strategy for Small Users of Milk Tea Shops

First, let’s talk about holding cash; we can rephrase it as: holding the local fiat currency. Fiat currency is merely a medium of circulation in the economic system and has no inherent anti-devaluation properties. Holding large amounts of fiat currency may seem safe, but in reality, it faces dual risks: one is the depreciation of the local currency (for example, the RMB has fallen 12% against the USD this year), and the second is that bank interest rates cannot keep up with inflation. In the first quarter of 2025, China’s CPI rose by 5.3% year-on-year, while the one-year deposit interest rate is only 1.8%, resulting in a real purchasing power decline of 3.5% each year.

Let’s take another look at holding gold. While gold can serve as a hedge, it has at least two fatal flaws: it cannot be quickly circulated (the buyback discount at gold stores can be as high as 20%) and it is difficult to divide (retail investors who cannot afford a whole gold bar can only opt for paper gold, which is essentially a financial derivative). We often say that Bitcoin and gold are in a competitive relationship, and in terms of fixed total supply and suitability for storage, they are even (Bitcoin is more suitable for storage than gold). However, in terms of quick circulation and divisibility, Bitcoin wins hands down.

The remaining choices are clear. Bitcoin is not a gambler’s lottery ticket, but a lifeboat for the sober. Its value lies not in getting rich overnight, but in providing a backup system independent of sovereign credit.

Historical Cycle

Looking back at the Great Depression of the 1930s, the tariff war once dragged the global economy into the abyss, ultimately ending in world wars. Today, the beautiful country has taken up the tariff stick again, but the world is completely different— the emergence of Bitcoin has provided ordinary people with a hedging tool that has never existed in history. This does not mean that Bitcoin can eliminate crises, but it creates a possibility: when governments of various countries bite each other to maintain hegemony, individuals can at least protect their labor results through a parallel world constructed by code.