Re:Six Months into Tariffs, Businesses Have No Idea How to P...
by decimalenough on Saturday August 30, 2025 @10:06PM
(#45079688)
If the US buys less, there will be unsold inventory and a temporary glut in supply, which will lead to the Chinese dropping prices and exporting elsewhere. This is already happening in SE Asia:
Obviously the profit margin will be less than selling to the US, but it does mean that the 3% of GDP mentioned above is not going away entirely, just shrinking to (say) 2 or 2.5%.
The article also mentions transshipment, where Chinese goods get routed to the US via a third country. Although Trump's strategy of "tariff everybody for all the things" is putting a damper on this too.
https://www.chiangraitimes.com/china/china-export-dumping/
Obviously the profit margin will be less than selling to the US, but it does mean that the 3% of GDP mentioned above is not going away entirely, just shrinking to (say) 2 or 2.5%.
The article also mentions transshipment, where Chinese goods get routed to the US via a third country. Although Trump's strategy of "tariff everybody for all the things" is putting a damper on this too.