Beyond Tariffs: What the U.S. Can Learn from China's Industrial Playbook

The Trump administration is attempting to spur an industrial revival in the United States by imposing tariffs on trading partners. China—a key target of U.S. tariffs—has experienced the largest industrial expansion in history, rising from poverty to become the top global manufacturer and exporter within a generation. Despite the unique nature of its political economy and the challenges it faces, China offers valuable lessons that could benefit the United States as Washington attempts to increase domestic manufacturing. 

Among them:Beijing did not rely on a tariff-based traditional import substitution strategy. China implemented many promotive and restrictive measures to boost domestic investment and production, especially by attracting foreign direct investment (FDI) that facilitated tech transfer and skills upgrading. Tariffs and non-tariff barriers were among its many policy tools and by themselves don't explain China's rapid industrialization.

China has used long-term plans that offer a degree of predictability. When Beijing says it wants to achieve a given goal, investors listen and respond accordingly.

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