If an American screw driver is $10, and a Chinese one was $5, I bought Chinese. If you tariff the Chinese one to $8, I will buy American. China knows this, so

If an American screw driver is $10, and a Chinese one was $5, I bought Chinese. If you tariff the Chinese one to $8, I will buy American. China knows this, so they change the price on their screw driver (that actually costs them 0.75) accordingly, so that it can still be sold for $5, because they know there's a ceiling on what people will pay. China doesn't have pure competition. The price of their goods isnt really related to cost by it more of what the buyer will pay.