China is the most protectionist country in the world - it sure seems to work for them. Is there rhetoric regarding retaliation - Yes! - And they can worry all the way to the bank with massive surpluses. They need to implement Fiscal and monetary policies to prevent their economy from overheating. Yes, they have many worries.
A steel company that forms in the US for US buyers, is a domestic company for the domestic market. How can that steel company compete against cheap foreign steel imports- it can't unless their are tariffs on imports or imports aren't allowed into the country. US companies try to buy Chinese companies all the time - they can't. US companies want to export to China all the time - They can't. They can only build factories inside China, employ chinese labor and ship to China's market and export to the rest of the world from China. The one's that benefit are the businesses that participate in the Chinese economy, not the people of the US - that wealth doesn't land here. Unless you consider the few percent of people whom reside in the US that own international companies, that have their employment overseas. Most of their wealth stays overseas anyway.
I'm not talking about foreign internationals building factories here, I'm talking about new companies forming here for the domestic market - screw the internationals if they don't want to open a factory here.
US goods can differentiate themselves if we can offer a superior product and even though they may cost more, people will buy them overseas if they want to, if not, let it be.
The way it should work is: The US needs to be primarily self sufficient in the most important industries for our economic and political security - the more dependent we are on international products for our survival the more we will suffer in the long haul. Anything above that baseline can be imported. We need to foster this self-sufficiency again. The government and people need to decide what are these basic necessities (Energy production and resources, Raw Materials for Construction of vital products, Clean Air and Resources, Technology, etc., ) Can we import olive oil from italy, sure, that only makes sense. Can we import solar cells from China? - I hope not. We need our own energy market. Can we import oil from other countries? - we have too! - but we need to do everything possible (outside of destroying our land and water) to become energy independent (which means to focus beyond carbon based energy - oil, gas, coal) - China is doing this already - they know what the word "finite resource" means.
