So, prices will rise in the US due to tariffs. Sure, but what also happens is there is massive capital flight from China by Chinese themselves as they feel the ship sinks. They put their money into – the US among others. Investment and industry come back to America. The world discover the value of short supply lines. And also the value of having things made in the country creates jobs and keeps industrial secrets safe. Counting up US exports to China with Chinese exports to the US is a very misleading picture. China has everything to lose in this confrontation – and with cheap and clean energy fro shale gas the US uniquely positioned for an industrial revival unique in many decades. Pain brings back the rugged entrepreneurial spirit that made America great. China cannot deal with things like this. They are still a monolith.
The latest escalation in the trade dispute between the United States and China shouldn’t have come as a surprise as it fits the established path the conflict has taken so far.