RE:RE:Trade War Talk OverratedJohnny,
1) You're referring to the USA labour force participation rate, which has dropped about 3% in recent years. If you look at a graph from 1950, the current rate of 63% is about average. It's down from a high of 67% in recent years. There is a silver lining. Even though the unemployment rate is 3.9%, there still remains a potential pool of workers that could be tapped to relieve the shortage.
https://tradingeconomics.com/united-states/labor-force-participation-rate
2) I don't think the Chinese are terrified of Trump. To be sure, they're not thrilled by the recent tariff moves, but those were expected. One thing they have going for them is the unprecedented level of division in American politics. Democrats and Republicans are too busy killing each other to present a united front against China. They don't even know if Trump will be around after 2020. It could pay the Chinese to exercise patience and simply play for time.
3) I believe Trump is more concerned about global markets then he let's on. My own impression is that the private Trump is very different from the public persona he has carefully crafted. He has been inducted into the World Wrestling Entertainment hall of fame. That should tell you something. Instead of wrestling opponents, he has very intentionally turned mainstream media into a foil for his fan base. The media are cooperating by playing to type with a seemingly endless stream of editorials denouncing Trump. Politics as entertainment. It's WWE all over again.
Yet I was always skeptical that a billionaire would set out to destroy the global economy. He has moved very carefully with all his trade moves. Instead of implementing a flurry of radical policies all at once, he only makes one move at a time, waits to see the response, always prepared to return to the negotiation table for another round. The Chinese are probably going to be tough cookies. So this could heat up. Even if it does though, it's hard to tell what impact this would have on global GDP growth. Many experts, for whatever that's worth, are predicting a worst case scenario of a 0.5% drop for China and 0.1 to 0.3% for the USA. Concerning, but certainly not a disaster. Time will tell.