Say it costs a US manufacturer $100 to make 1 ton of a product.

Say it costs a Chinese manufacturer $100 to make the same 1 ton of product, but the Chinese government kicks in enough money to reduce their cost to $.50 per ton.

Guess who can sell their product cheaper?

This is one of the reasons the US steel industry almost went extinct.


It's not a level playing field for free trade if one of the players is getting financial help from their government.

Tariffs are one way to even things out.