“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 manufacturing of military goods is a burden on the economy in a macroeconomic sense. It may be required for security purposes, but it never contributes to the overall economic good for a nation; other than to those who make profits from it and those who work in those industries,