You become dependent on the supplier.

The downside in general is that other countries lose production capacity in steel, heavy industry, semiconductors, machine tools etc - industries that took decades to build and can't be easily replaced.

Also they gradually lose the ability to meaningfully innovate in those sectors because there's no grounding against production reality anymore.

This has geopolitical consequences further down the line.

First, they're not selling at a loss; the huge price increases have allowed them to push aggrssively in the legacy markets. They're making "slightly smaller" profits than other manufacturers (of which there are now very few).

Second, they can drive out all competition and then have a captive audience for whatever prices they want, as the barriers to entry in these markets are very high. This is essentially what's happened with all higher-end manufacturing in the west over the past 30+ years.

If you actually believe this, then what is your explanation for a manufacturer to do this?

Do you think they are just stupid?

Microsoft gave away Internet Explorer at a loss, and what happened to internet standards?

the currency eventually collapses