Wouldn't China just increase the cost anyway to compensate?
Wouldn't China just increase the cost anyway to compensate?
China gets the same money for exports as before tariffs, US citizens pay that tariff either the US importer eats the tariff (doubtful) or he passes it on to US consumers.
I meant in Lilli's scenario where the exporter was paying the tariffs
Yes. If China was for some reason paying us to sell to us(???), a formerly $100 item that they pay $30 on would suddenly be sold to us at $130 (or maybe more to make up for lost sales!). The effect would be the exact same.
what, do you think they're trying to run a solvent business or something?