The short answer is yes. Lower price Chinese goods would help us lower its inflation. However, the effect of this on US inflation is limited given current structural misplacement of supply chain.
The reaction of cheap Chinese cargo enters into US market would like:1. helped US lower domestic goods; 2. China purchases more material and push up commodities prices; 3. more shipping demands push up shipping cost; 4. Chinese goods prices in US start to rise after several month;
So we can see the lift of US tariff on eliminate US inflation is limited to several months. However, global supply chain will not be recovered shortly due to lack of capacity investment.
US need to:1. invest more on supply chain; 2. help Russia and Ukraine cease fire soon.
China need to:1. drop current covid control; 2.send money to residents; 3.spend more money on supply chain;
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