China has driven foreign competitors out of business over the past two decades by using its market dominance to slash prices, Treasury Secretary Scott Bessent said.
I’m no economist but… how does enforcing a price floor help you to compete with China who already has the market cornered, and does so with lower prices? If my competition has 75% market share to my 10%, the only way I have to make up that difference at all is for demand that they can’t meet to go up (which is out of my control), or to either provide a better product, or give them the same product at a lower price to attract more customers. Setting a price floor just took one of my levers away, and the other lever, product improvement, costs money that I don’t have. So… this is just going to kill competition with China, kill American businesses and give China room to make even more money. Am I missing something?
I’m no economist but… how does enforcing a price floor help you to compete with China who already has the market cornered, and does so with lower prices? If my competition has 75% market share to my 10%, the only way I have to make up that difference at all is for demand that they can’t meet to go up (which is out of my control), or to either provide a better product, or give them the same product at a lower price to attract more customers. Setting a price floor just took one of my levers away, and the other lever, product improvement, costs money that I don’t have. So… this is just going to kill competition with China, kill American businesses and give China room to make even more money. Am I missing something?