Shipping is also subsidized by all of us on this end. International postage agreements were never intended to cover a massive unidirectional deluge of low-value packages. The costs of all the additional logistics are ultimately externalized to the taxpayer, and China totally exploits this. It’s exactly the reason the EU set a tariff for low-value parcels in particular.

I think the parent comment is incorrect, however this is true for some products. Solar panels being the one I know for a fact, because we buy them at work. We pay less than it costs them to manufacture them because the Chinese government subsidizes it. (Granted, after tariffs we're probably hitting that manufacture price again, but that money doesn't go to them obviously.)