Trade

One of the reasons why the expected rise in prices because of tariffs did not happen, is that countries like China absorbed the additional cost at the expense of profits. The result for China was an increase in trade surplus and a decrease in corporate profits showing a 13% drop in year over year profits in December 2025. The US must continue to use imports as reshoring develops. Companies are bringing manufacturing back home because labor cost overseas have risen sharply, problems with supply chains, protection of intellectual property and greater oversight of quality control. The government also sees dependency on foreign production as a threat to national defense. Consumers haven’t forgotten the shortage of baby food and toilet paper not to mention important pharmaceuticals that must be imported.