If China keeps the price at $12 in your example they are not paying for the tariffs. Tariffs are imposed at the point of entry to the U.S. and are paid by the importer (U.S.)...the only way China would “pay” is if they reduced the price of the product by the same % as the tariff.
Again, I’m not sure this is accurate, as the US Treasury is actually receiving billions of dollars from China due to the tariffs. They are actually paying us!
China is doing what they can to make sure that the added cost for companies to import goods remains the same otherwise the cost would have to go up for the company to keep it’s profit margin. If that happens and the price goes up the consumer would pay for it. At a certain price the consumer says, “I’m not paying THAT price” and they go to another product. This again hurts the company that brought in their cheap Chinese goods. The company will start losing business to competitors who don’t have that added tariff and the company says, hmm..maybe we need to get our stuff from non tariffed countries. They then move their manufacturing from China to compete and have the same price point with the same profit margin. China, knowing this, has to make sure that the company doesn’t have to raise their prices because of the tariffs. To do that it seems as though they’ve been devaluing their currency by the percentage of the tariffs. 10%, their currency is worth 10% less so the company can get more bang for their buck (needs a more detailed explanation here I know). This is why things aren’t going up by 10 and 25 percent. The company can eat it or China can. To date China has been eating the cost. Good luck with that as a long term strategy though. If I were on a computer I could have given a better explanation.