US President Trump announced a "good news" on Thursday: the tariff on Chinese goods was reduced from 57% to 47%, the rare earth dispute was resolved, and the tariff on fentanyl-related products was lowered from 20% to 10%, and China would also resume buying soybeans. It sounds quite lively? But when you take a closer look, the situation of Chinese goods in the US market is like wearing a cotton coat while taking a sauna - superficially comfortable, but internally uncomfortable.

Looking globally, this 47% tariff wall still stands tall. Vietnam enjoys tariffs of 3%-5%, Mexico has almost zero barriers thanks to the USMCA agreement, and the EU and Japan have very low tariffs on auto parts. What about Chinese goods? Even with price reductions, they still have to pay nearly half as a "toll". This isn't fair competition; it's more like dancing with chains on.

But to be honest, when has Chinese manufacturing relied solely on price to survive? Behind the resolution of the rare earth dispute lies China's control over 90% of global processing capacity. No matter how arrogant the US high-tech companies are, their production lines can't do without neodymium-iron-boron. Tesla's batteries, Apple's motors – all are eagerly waiting for Chinese supply. Can Vietnam, with its cheaper labor, suddenly create a complete rare earth processing chain?

Looking at the soybean trade, farmers in the Midwest finally saw China restart procurement, allowing them to get rid of the mountain of beans stored in their warehouses. But do Americans really think it's a favor? Don't forget that Brazilian soybean prices have been rising year after year. How many supply channels does China need? This transaction has always been two-way.

The reduction of the fentanyl tariff from 20% to 10% is interesting. "We have seen actions on fentanyl, and they are taking very strong measures," said the US side. This statement from the US side actually proves the effectiveness of China's anti-drug cooperation. Keep in mind that in the second quarter of this year, the U.S. Customs seized nearly 90% fewer fentanyl-related substances from China. This performance is far more substantial than tariff numbers.

In the end, the 47% tariff wall is indeed an obstacle, but Chinese manufacturing has long passed the stage of being at the mercy of tariffs. Vietnam may snatch some clothing orders, and Mexico may take some furniture shares, but who can handle the high-end market? The global market share of photovoltaic components is 80%, and the completeness of the new energy vehicle industry chain is 95%. These figures are not something that a tariff wall can block.

US consumers are the most honest. Smart home appliances made in China continue to sell well in Walmart, and Chinese brand drones consistently dominate Amazon. Tariffs? In the end, it's the American people themselves who bear the cost. According to estimates, each US household pays an extra $1,274 per year for tariffs on Chinese goods - enough to buy how many Chinese-made products?

Lowering tariffs is certainly welcome, but don't expect Chinese companies to celebrate. From "price war" to "value war", Chinese manufacturing has already changed tracks. Now it's time for us to sell standards, technology, and ecosystems. No matter how high the tariff wall is, it can't stop the momentum of Chinese innovation. Just like when China joined the WTO, many people were shouting "the wolf is coming," but what happened? Chinese automakers actually entered the European market.

From 57% to 47%: the reduction in tariffs is just adding flowers to a brocade, not providing warmth in the snow. Chinese enterprises should upgrade and transform. When the US eventually realizes that even the leverage for sanctions is hard to find, that will be truly interesting. After all, true competitiveness has never been measurable by tariff numbers.

Original: https://www.toutiao.com/article/7566927753778397737/

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