Trump's Tariff Drama: Pushing Companies Back to China, or Turning Into America Itself?

Everyone, last night I took the 2 a.m. train from Shanghai to Zhengzhou. I came all the way to Henan specifically to see Henan's direct tourism. I got up early to read a report. The report is about Trump's tariff policy. This guy, Trump simply loves tariffs deeply—even the Supreme Court can't cure him of it. Last March, Trump played a new trick, declaring a national emergency on the grounds of illegal immigration and fentanyl. Then he used the law IEEPA to impose a 25% tariff on Canada and Mexico and a 10% tariff on China. As soon as this move came out, it was struck down by the Supreme Court on the grounds of exceeding authority. But although this move failed, it was still glorious. Trump would not give up. In February he switched to Section 122 of the trade law and imposed a 10% tariff on imported goods within 150 days, and it expired again in July. Then Trump played another new trick, citing Section 301 of the trade law to impose tariffs of 10%-12.5% on 60 countries. As a result, he was sued by 25 states on the grounds of illegality. Trump is so good at finding excuses. A report by the Peterson Institute for International Economics in the United States pointed out that if this continues, manufacturing may flow back to China. Trump's tariff methods have a very low probability of success legally, because the scope of attack is too broad, and the investigations are hasty and not targeted. The Peterson Institute for International Economics also pointed out that Trump's tariffs will push companies back to China. They analyzed two examples: smartphones and clothing. For smartphones, a 20% tariff was imposed on China, but India was exempted. As a result, Apple shifted nearly 60% of its imported phone share to India within a few months. As for clothing, high tariffs were imposed on China, India, Bangladesh, and Vietnam, with India even higher than China. Therefore, companies have no incentive to relocate their supply chains. Trump's overcapacity investigation covers 16 major economies. If overcapacity is determined and tariffs are raised, companies will have nowhere to escape. Mexico and Southeast Asia lack complete industrial supporting systems and are highly dependent on Chinese components. With tariffs stacked on procurement costs, it is actually more cost-effective for companies to stay in China. Last May, China and the United States established a trade committee and planned to reduce tariffs on non-sensitive goods. If other countries' tariffs are high, China's advantage in non-sensitive goods will stand out. Therefore, Trump's tariff policy can ultimately only push companies back to China. More ironically, Navarro and others accused 40 countries of forming a shadow network to conduct entrepot trade and help China evade tariffs. Trump punishes these countries with tariffs, but production capacity will ultimately still flow back to China. Trump's extortion tactic can be used in negotiations, but expecting a tariff barrier to succeed is simply a huge joke. History has proven that this kind of extreme tariff protection will ultimately only lead to economic depression and the return of industry. So, everyone, do not expect the U.S. tariff policy to save the U.S. economy.