| "The US will have to bootstrap a lot of manufacturing to replace Chinese labor." They just have to move to cheaper countries to replace Chinese labor. One time upfront asset cost, but lower expense over time. "US trade "only" accounts for about ~18% China's total trade" Once China is not part of the trade flow between US and X country (Taiwan, South Korea, Japan, etc), the total trade for China will fall even more than 18%. "they can still manufacture goods intended for anywhere else in the world there - just not for the US" US is the largest consumer market in the world. Japan is second at 1/3 of the size of US. EU consumer market is mostly fragmented. There is just not that much singular consumer demand outside of US. Plus other countries are enacting tariffs on China as well - India for example. "Especially other foreign companies operating in China will profit from reduced competition for Chinese labor / manufacturing, encouraging them to move more manufacturing there." There are lots of countries that have way cheaper labor costs than China, there's no reason for the foreign companies to go there in the face of increasing tariffs. Nike is 30% in Vietnam. Samsung is producing more of its phones in Vietnam. Uniqlo increased its presence in Vietnam by 40%. "US companies will only withdraw in part from from China, since they can still manufacture goods intended for anywhere else in the world there " Again, tariffs and cheaper labor costs elsewhere will entice companies to move out of China entirely. Not to mention the threat of Chinese government takeover of assets, or capital outflow restriction. |
If those are actually further up the value chain leading to exports to the US (as you seem to suggest), those would largely be imported goods.
Edit: Moot point really. Those would just be a consequence of manufacturing happening in China. It's better to have a direct look at the amount of manufacturing happening in China, instead of guessing at parameters directly which are actually a dependent on it. That would be like trying to guess whether a taxi company will buy less fuel if you're no longer a customer (maybe they'll have other customers instead), and on top of that wondering whether that's a bad thing. It's just the wrong aspect to focus on.
> US is the largest consumer market in the world. Japan is second at 1/3 of the size of US. EU consumer market is mostly fragmented. There is just not that much singular consumer demand outside of US.
Which apparently doesn't seem to mean much - as proven by the fact that plenty of brands have no trouble selling basically everywhere despite "fragmented" markets. Also what do you mean when you say the EU consumer market is fragmented? The main selling point of the EU is that it is literally a single market.
> Plus other countries are enacting tariffs on China as well - India for example.
India already appears to be backpedaling on their earlier posturing.
> There are lots of countries that have way cheaper labor costs than China, there's no reason for the foreign companies to go there in the face of increasing tariffs.
The most noteworthy tariffs are China <-> US right now. There's little reason for non-US companies to go elsewhere, especially now that Chinese labor and manufacturing is going to become cheaper again - emphasis on manufacturing, not labor, since the infrastructure and know-how already exist in China.