12/22/2024

China does not even need tariffs to protect its domestic market

 China does not even need tariffs to protect its domestic market. Foreign manufacturers can do business in China if they can compete with home-grown Chinese manufacturers by offering cheaper goods than those made by Chinese owned factories.


The erection of tariffs is unnecessary for China, as China goes directly for the jugular when retaliating, by refusing to deal with those perpetrators of tariffs, by cutting off imports of products that they produced for the Chinese market. We can see China cutting off imports of most of its agricultural products like soya beans, corn and wheat from the USA. China is also cutting off pork from the EU, going after French cognac as well, putting farmers in the EU at sixes and sevens. Why resort to tariffs, when China can directly inflict immediate pain?

The actions of China in restricting imports from USA and EU benefits BRICS countries like Brazil and Russia among others. What are allies for after all? The further benefit of all this is helping BRICS to de-dollarize by promoting trade among BRICS countries, all outside the purview of the USA and the West and marginalizing the US$ hegemony. Of course, all this can only come about after years of planning and finding alternative sources of supplies, not building toilets when the urge to poo is too strong. Crops need time to grow after all.

Anonymous

1 comment:

  1. Only those in a position of weakness needs sanctions and tariffs to keep up its appearance of being strong.

    China is in a position of strength - cheap energy, skilled workers, control of raw materials, strong manufacturing base and most importantly a huge domestic market that even foreign companies have to rely upon, without which they cannot hope to find alternatives.

    The other reason favoring China is having BRICS and Global South countries giving strong support and enjoying all the benefits of cheap products, which they would otherwise have to pay an arm and a leg for if supplied by the West. Who does not want cheap products leading to a lower cost of living, knowing that most Global South countries are not high-income earners.

    The expansion of BRICS and de-dollarization cannot be denied, even if the USA is dead set against it. The Biden Administration obviously is downplaying it on the surface, while Trump is openly hostile towards it. BRICS may be moving in incremental steps and carefully charting its course, which the USA and the West can try to belittle now. They can continue to question the real purpose of forming BRICS, but that is due to their insecurity, paranoia, and fear of losing the US$ hegemony.

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