China is going to replace US imports with those from the developing world. They’re playing to win the future (which is Africa and India, from a demographics and therefore economic development perspective).
It depends on how strong the demand is. China's strategy works with America since there is such a huge base of capital you can access and market cheap products to. India and Africa still have a ways to go, and even collectively won't represent demand equivocal to the value of the US market. In either case, China will be spending more to build more stuff to sell at lower prices.
I personally don't think tariffs are the right call, but I also don't think China has a perfect response either. They can't cover tariffs out of pocket because their government already bends over backwards to subsidize manufacturing. China is not the supernaturally stable power they project to others, and their power structure can be broken by refusing to give them what they want.
Unless you believe America will buy less overall why would the new tariffs make that big a difference to China? Say America shifts dollar amount X to country A, what do you think country A does with the X dollars?
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[ 2.4 ms ] story [ 16.5 ms ] threadI personally don't think tariffs are the right call, but I also don't think China has a perfect response either. They can't cover tariffs out of pocket because their government already bends over backwards to subsidize manufacturing. China is not the supernaturally stable power they project to others, and their power structure can be broken by refusing to give them what they want.