I predicted this. As a trained economist, I knew China and Chinese companies would be forced to eat most of the tariff increase.
In the short to medium term, China simply cannot afford to have their companies shut down and lay off millions of workers. The cost of doing that is far greater than eating the tariffs.
Contrary to what many think, China is running a very large deficit for the past few years. That’s not going to change because their aging population will require government benefits and subsistence payments.
The Chinese economy is going to be a dumpster fire in a few more years.
“The Chinese economy is going to be a dumpster fire in a few more years.”
Despite the idiocy of the socialists, statists and regulators-extraordinaire in this country, our free enterprise system simply cannot be beaten - and for sure not by some Johnnie-come-lately economy without the long-term traditions and institutions that are necessary to a growing and innovative economy.
And Donald Trump is standing by with a flame thrower.
“In the short to medium term, China simply cannot afford to have their companies shut down and lay off millions of workers. The cost of doing that is far greater than eating the tariffs.”
So, why wouldn’t they shift to military production as the tariffs go on?
The entire world ( except Poland and most of eastern EU ) is waiting out Trump. They whole world wants him to lose re-election.
Exactly so.