How China Made Itself Tariff-Proof

From the New York Times, I'm Natalie Kitroeff. This is The Daily. About a year into Trump's global trade war, China hasn't just survived. It's emerged stronger than ever on the world stage. And that's because after years of careful planning, China has essentially made itself tariff proof. Today, my colleague Keith Bradscher explains how despite Trump's best efforts, China's robot powered super factories are taking over the world. It's Tuesday, March 24. Keith, it's been about one year of tariffs on China, one year of, I think it's fair to say, economic war on China, a crazy year, honestly, which was capped off by a Supreme Court ruling saying many of these tariffs were illegal. And what we're here to do today is figure out what did the last year amount to. And you are here because you've been covering trade for approximately one billion years. Is that right? Since 1991. Yes. Thank you. K. Close to a billion. And so what we want is for you to help us understand what these tariffs have wrought when it comes to China. These tariffs are changing China's trade in important ways, but not nearly as much as the Trump administration expected. Yes. China's not shipping as much to The United States as it was before, but China's also not buying as much from The United States as it was before. The overall trade surplus of China, how much its exports exceed how much it's buying from the rest of the world, is still growing. It became even more immense last year when it reached $1,200,000,000,000. 1,200,000,000,000.0. Just put that in context. How big of a deal is that? 1,200,000,000,000.0 is bigger than the trade surplus for China in manufactured goods, which create a lot of jobs, a lot of high skilled, well paid jobs, That trade surplus was even bigger. China's truly become the factory of the world, the dominant producer of everything from basic materials like steel and chemicals, all the way through electric cars and solar panels. The upshot of what you're saying, Keith, is that the most aggressive tariffs against China in decades didn't really stop China from dominating in manufacturing. Why? What explains that? There are four reasons. One, China ramped up its sales in a hurry to other markets, not just in Asia, but in Africa, Latin America, and in Europe. Second, China ramped up sales of goods that are indirectly reaching The United States, like exporting the parts of a vacuum cleaner or some other system that then gets assembled in another country and then shipped into The United States. So a lot of indirect shipments to The United States through other countries. Third, China has managed to weaken its currency a lot. That makes China's goods much cheaper in foreign markets, and it makes foreign goods like American goods or European goods very expensive in China. But the last reason, and in some ways, the most important reason why China is producing such …