Tariffs are working to weaken Chinas unfair trade dont stop now

Ever since the November truce in the U.S.-China trade war, chaos has receded and a sense of equilibrium has begun to take hold in American trade policy.Business leaders have revised their tariff fears, GDP growth is forecast at a robust 3.5%, tariffs are on track to raise a remarkable $256 billion of additional annual revenue, predictions of runaway inflation and spiraling retaliation have been disproven, and green shoots of increased manufacturing activity are sprouting after a season of uncertainty.But an increasingly conciliatory attitude toward China has created a feeling that the administration’s trade strategy is muddled.The terms of the November truce suspended high reciprocal tariffs in exchange for China permitting rare earth exports to flow, essentially resetting the U.S.-China relationship back to the status quo immediately prior to Liberation Day.The White House has even placed national security matters, such as semiconductor export controls and cyber-espionage sanctions, on the negotiating table to preserve the detente.This has frustrated those who thought the overriding aim of Liberation Day was to decisively squeeze China and provoke decoupling.China has been able to grow its global exports despite U.S.

tariffs.Commentators note that we have been treating allied countries and important fence-sitters like India more harshly than our chief adversary, “punishing our friends while courting Beijing.”There is plenty of room to criticize the administration’s current approach on pure national security grounds.But as a trade matter, it’s a different story.The recent pessimism ignores a fundamental reality: tariffs on China are significantly higher than tariffs on the rest of the world, and as long as that remains the case, it will drive a structural realignment in the global trading system that disadvantages China.In order to keep exports growing in the face of U.S.tariffs, China must increase sales to new markets.

But those new markets tend to be ...