China is paying for tariffs. Paying for it in the form of lost opportunities which are priceless.
Tariffs and how local production is more valuable than cheap products. Increasing the amount of dollars present in a local economy results in more dollars being traded for goods and services inside that economy. An increase in available dollars relates to an increase in spending.
When you purchase a nail the money is paid to the store the. The store sends part of the money to the manufacturer, spends part of the money on operating overheads, and some of the money is saved.
If the manufacturer is not in the stores local economy, the money spent on buying the nail from the manufacturer is gone from that stores economy forever. If the store is local the money the manufacturer pays the worker is available in that local market to purchase more nails or any other product.
Keeping your money local is very healthy for your local economy. It ends up paying wages to your local workforce. The US market operates on the same principles. The more money kept inside the US market the more money available to spend on paying workers.
This will result in price the price of goods to increase however this increase will be offset by businesses expanding, hiring employees to keep up with demand and wage increases to keep up with inflation.
When your dollar goes out of your community your community misses out on the remaining exchanges that dollar will experience. This opportunity cost is even more profound when the manufacturer uses labor that is much cheaper than the purchasing economies labor. In addition, if the manufacturer resides within a closed market, meaning imports are not available for purchase, the money is trapped. Maybe never to be spent in your local economy again.
The only way to overcome this trapped money situation is to invest in the manufacturers. The concept of investing is massively under taught throughout our nation. If fundamentally sound investment education had occurred when the US economy began to outsource all its labor we would not be in this situation.
Now if we exported as much money worth of goods that we imported then it wouldn’t matter from a national gross wealth perspective however what we would see is those who actively participate in equity markets