China’s economic model is not one of free trade or comparative advantage. It is predatory mercantilism, an aggressive system designed to suppress domestic consumption, keep wages artificially low, and use state-backed subsidies to generate vast industrial overcapacity. This overproduction is then dumped onto global markets, ensuring that foreign competitors cannot compete on price. Meanwhile, China’s government manipulates its currency and capital flows to maintain its trade advantage, preventing market forces from naturally adjusting. Because trade flows must always balance globally, China’s persistent surpluses force America into persistent deficits.

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