Let us say that China and the US both have tariffs on one another’s imports at an arbitrary rate. What happens if the US eliminates tariffs while China maintains theirs?
Naturally, I understand that initially, Chinese goods in the us would be less expensive and some work in the US would cease to be competitive. However, the imported goods would be less expensive over all and this would boost value for the US.
The Chinese on the other hand would get a boost in exports and would therefore bring in additional US dollars.
In the long run, at some point, wouldn’t China have a gob of US dollars that they would have to exchange some how? Either use it to purchase gold or US products or land in the US. Is it not inevitable that the dollars will flow back to the US regardless of the tariff state?
The essential question is if we lowered our tariffs on all imports to 0, and regardless if others reciprocated, should we care? How would that effect our economy?
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