When Chinese production is growing faster than its own demand or that of the global economy, the rest of the world cannot absorb China's increase in manufacturing production without being forced to adjust, and these conditions would not appear in a normal market economy but are instead a fundamental distortion driven by government policy.

The US, EU, Turkey, India, Mexico, Chile, and Brazil have all taken trade actions against Chinese exports in specific sectors—EVs, steel, and solar—and while each country has its own concerns, the underlying reason is undeniable: China's overcapacity undermines workers, industries, and economic resilience and security.

J Shambo, in a July speech on Chinese overcapacity, argued that Chinese policy makers' preference to push manufacturing further as China's growth driver means taking on an increasingly outsized share of global production, with other countries' manufacturing sectors needing to shrink to compensate, and that China's size means its imbalances pose an even greater risk to the global economy because a large economy with a dominant market position can shift global prices and leave the rest of the world to deal with consequences.

The United States will act on overcapacity concerns and will not act alone, with the best outcome being for China to acknowledge the growing concerns among its major trading partners and work with the US to address them.