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Import duties and tariffs are levied by US customs on the importer. The importer in the US pays these, not the exporter - in this case a Chinese company.

If it is a small amount, the importer in the US might be able to absorb the cost of the tariff or duty. For example, a 10% duty might be something that can be absorbed and NOT be passed on to the end-user / retail buyer.

Once you get up to 25%, that has almost certainly has to be passed on to the end user / retail buyer.

The reason this is used, is that when one country’s exports become 25% more expensive, then the US importer will source their items from some other country where the tariffs / duties are NOT imposed.

So the function of tariffs / duties is to shift the competitive price point from the country exporting to the country importing, for the domestic manufacturers.

So whether the tariff is 10% or 25%, and whether it is imposed by China or Germany on US goods, it makes US goods higher in price to the buyer, thus shifting the market to less imports of US goods and more sales for the domestic manufacturer, in China, Germany or wherever. Tariffs and duties are protectionist.

Thus in the case of China, with a 25% import duty, China loses the sales / market. It either goes internal to the US if US manufacturers can beat the new China+25% price - or it may go to some other country than China - S Korea, Vietnam, India etc. for example - which does not have the 25% duty levied on their imports into the US.

Another possibility - The Chinese manufacturer CUTS their price by 20%. This plus 25% import duty equals the same net price into the US.

This obviously also causes problems in China. To be “low-cost” a lot of Chinese stuff has a thin margin. If they have to take a 20% cut to export into the US, the margin (profit) will almost disappear. Some stuff may not even have a net 20% margin and so would be sold at a loss into the US if they cut price to keep the same net import price.

So the function ultimately cuts into China, one way or another. It is obviously not instantaneous or even “quick”, but it is inexorable and unavoidable.

The US can source stuff worldwide. Multinational companies can move production back to the US. But there is no substitute for the US market. China’s trade surplus of $500B can drop a lot, leading to lost jobs in China, and even financial collapse of China companies with big loans for growing their exports (and thus the banks?), and they don’t have the resilience of the US.

This is the long game. Trump’s Tariffs on China are a strong effort to chang this to the benefit of the US if given the time and resolve to work.

Here is why I like the Tariffs on China.

America can source from many different countries. So we should source from those who are good actors.

China manipulates its currency to make their goods less expensive. If America raises tariffs and China lowers their Yuan. America benefits with tax revenue, not China.

China is trying to control certain industries, taking control of the resources and the market place. This is market power on a global scale. Tariffs combat this.

China is a huge polluter. Products built in China cause massive pollution. And China is also a very inefficient resource user. Their quality control is horrible. China throws away lots of raw materials. Which is a huge waste.

China needs more competition and a good recession to improve their quality and wastefulness.

For all these reasons and their military spending growth. Chinese products should carry large tariffs.