In a manufacturing plant in Dongying, Shandong province, workers are pumping out thousands of brake rotors every day. After spending two weeks touring this factory and a dozen others like it, it’s clear that Chinese employees on the factory floor—not to mention Chinese corporate accountants—expect to find customers for their products. They know consumers need what they’re producing, whether they’re in China, Europe, Southeast Asia, or, yes, America, whether America imposes tariffs or not.
This brings us to a hard fact: America is not going to win an unqualified, unambiguous “total victory” in the trade war with China. Chinese consumers and businesses are not hurting any worse than American ones, so we shouldn’t hold out for Chinese capitulation to American demands. Rather, we should make limited demands and look for a quick resolution.
There are a number of reasons why tariffs are not having their intended effect on Chinese companies and consumers—and why there has not been a corresponding benefit for American companies.