🎯 TARIFFING CHINA – A SILENT WAR OF ECONOMIC ATTRITION

Many argue that when the U.S. imposes high tariffs on Chinese goods, it’s American consumers who suffer first—paying more as prices rise. But that’s only a short-term perspective.

In reality, this is a war of attrition. China’s economic model—mass-producing cheap goods to dominate global markets—can only function if cash flow remains uninterrupted. Every shipment sold is just one link in a massive low-margin chain that relies on volume to survive.

By imposing tariffs, the U.S. isn’t just raising consumer prices; it’s choking the cash flow of Chinese manufacturers. In the short run, prices rise. But soon after, when low-margin factories collapse, excess inventory gets dumped at fire-sale prices, triggering a flood of ultra-cheap goods. Rather than sustained inflation, we see a supply crisis on the Chinese side—and a temporary surplus for global markets.

Here’s the catch: China’s industrial strategy thrives on razor-thin margins. To stay competitive, it underpays workers, exploits natural resources, and overlooks environmental costs. That model works well in an open global system—but when trade barriers rise and international trust erodes over issues like IP theft and price dumping, China’s structural weaknesses become exposed.

In other words, tariffs are not just economic weapons—they are tools to rebalance the global playing field. With its massive consumer base, the U.S. is leveraging its buying power to force fairer trade behavior and respect for innovation.

The U.S. may accept short-term pain, but it’s China that risks long-term instability. When a nation depends on cost-cutting to survive—and cannot pivot to innovation—it eventually undermines its own future.

#Geopolitics #TradeWar #SupplyChainStrategy