Doesn’t need to be more. Most of what China imports from the US is relatively easy to source from elsewhere. For example the biggest category of imports is fuel, and the third biggest category is plant based oils, grains, seeds, fruits, etc. The US doesn’t have a particular monopoly on those kinds of products. Last time this shit happened, China started sourcing all their soy bean imports from Brazil, for example. So China only has to make the US products uncompetitive in their market. And of course, China isn’t in a trade war with the entirety of the rest of the planet, so it’s a choice between an 84% tariff, or something in the region of no tariffs, so it doesn’t really take all that much to make the US product more expensive than any other option. If anything, these additional tariffs are largely performative; just at the 34% percent level they were at, most US producers were probably already completely shut out of Chinese markets just by cost differences alone.
The US, on the other hand, largely imports things that China is highly specialised at making. Electronics, injection molded plastics, that sort of thing. Stuff that you can’t just magically source from somewhere else, because even if another factory could make the product, they have to set up production runs, create specific tooling, run prototype batches, etc, etc. So even at a 100% markup, a lot of companies will have no choice but to continue to source those parts from China, especially since anywhere else they might have them built is probably also subject to an exorbitant tariff. The cost of importing from China isn’t actually 104%, it’s 104% minus the tariff one whatever other country you might get that part from. Trump’s deranged theory is that they’re going to choose between 104% vs 0% for making it in the US, but there simply aren’t any production facilities in the US that are set up to make the stuff that China makes, so that choice doesn’t exist.
(in case you’re wondering about the second biggest category, since I obviously skipped it, it’s machinery, including engines, turbines, nuclear reactors, boilers, taps, valves, etc. That’s the sort of thing that’s harder to source elsewhere, but in the long run China is much better equipped to start producing it domestically because they at least have the kind of broad manufacturing base needed. It’ll hurt them, but not nearly as much as this stuff is hurting the US, and they can also issue specific exemptions if needed).
Why so little
They should make it (infinity + 1)%. Checkmate.
It’s over 9000%
I approve this message
Doesn’t need to be more. Most of what China imports from the US is relatively easy to source from elsewhere. For example the biggest category of imports is fuel, and the third biggest category is plant based oils, grains, seeds, fruits, etc. The US doesn’t have a particular monopoly on those kinds of products. Last time this shit happened, China started sourcing all their soy bean imports from Brazil, for example. So China only has to make the US products uncompetitive in their market. And of course, China isn’t in a trade war with the entirety of the rest of the planet, so it’s a choice between an 84% tariff, or something in the region of no tariffs, so it doesn’t really take all that much to make the US product more expensive than any other option. If anything, these additional tariffs are largely performative; just at the 34% percent level they were at, most US producers were probably already completely shut out of Chinese markets just by cost differences alone.
The US, on the other hand, largely imports things that China is highly specialised at making. Electronics, injection molded plastics, that sort of thing. Stuff that you can’t just magically source from somewhere else, because even if another factory could make the product, they have to set up production runs, create specific tooling, run prototype batches, etc, etc. So even at a 100% markup, a lot of companies will have no choice but to continue to source those parts from China, especially since anywhere else they might have them built is probably also subject to an exorbitant tariff. The cost of importing from China isn’t actually 104%, it’s 104% minus the tariff one whatever other country you might get that part from. Trump’s deranged theory is that they’re going to choose between 104% vs 0% for making it in the US, but there simply aren’t any production facilities in the US that are set up to make the stuff that China makes, so that choice doesn’t exist.
(in case you’re wondering about the second biggest category, since I obviously skipped it, it’s machinery, including engines, turbines, nuclear reactors, boilers, taps, valves, etc. That’s the sort of thing that’s harder to source elsewhere, but in the long run China is much better equipped to start producing it domestically because they at least have the kind of broad manufacturing base needed. It’ll hurt them, but not nearly as much as this stuff is hurting the US, and they can also issue specific exemptions if needed).
At some point trade will become impossible. They probably want some room to keep increasing the tariffs before that happens.