The standard arguments against increasing tariffs on China often revolve around fears that inflation will rise due to increased costs of imported goods, and that retaliatory tariffs from China could impact U.S. exports. However, there’s a silver lining in the structure of U.S. exports to China. China exports far more to the U.S. than we export to them, leading to a significant trade deficit. While China floods our markets with manufactured products, its primary imports from us are in categories that directly affect consumers: Agriculture makes up 30% of U.S. household spending on food. Energy accounts for 10% of household expenses. (The other major category of household spending – 30% – that has hammered consumers in recent years is housing, but that is a supply problem caused by a lack of home building.) Additionally, China imports chemicals, high-tech circuits, and aerospace products from the U.S., which may not align with its strategic goals if tariffs are imposed. Here’s the key point: China does not produce sufficient food for its population, while the U.S. has a surplus, producing 30% more food than it consumes. Similarly, the U.S. is a net energy exporter, whereas China relies heavily on imports to fuel its populace and economy. Should China retaliate with tariffs on our agricultural and energy exports, it would increase the price for Chinese consumers and industries, consequently decreasing demand for these U.S. products in China. This could lead to lower prices for these essential goods in the U.S. as domestic producers seek to offload their surplus.