According to a recent report, recent data reveals a decline in US imports from China as Western companies are redirecting their supply chains away from China.
The share of Chinese products, which traditionally constituted a significant portion of low-cost Asian imports in the US, is projected to fall below 50 percent for the first time in over a decade. This decline signifies a notable decrease in US imports from China.
The report highlights the efforts of the US government to decrease reliance on China, coupled with the price sensitivity of American buyers, which has resulted in a shift towards importing more affordable products from countries outside of China.
Experts anticipate that by the conclusion of 2023, the proportion of US imports originating from “low-cost Asian countries excluding Japan and South Korea” will undoubtedly be less than 50 percent of Chinese goods.
China and the United States hold the status of being each other’s largest trading partners. Kearney’s Reshoring Index, utilizing US trade data, reveals that Chinese goods accounted for 50.7 percent of US imports of manufactured goods from Asian countries in the previous year. This figure represents a decline from the nearly 70 percent recorded in 2013.
While Chinese exports have experienced a decline, the Kearney Index demonstrates a significant increase in US imports from Vietnam over the past five years, which has tripled over the past decade. Additionally, India, Taiwan, and Malaysia have contributed to a larger share of Asian products consumed in the United States.
Notably, in February of this year, statistics from the China Chamber of Commerce for Import and Export of Machinery and Electronics indicate that the United States imported 1.356 million household vacuum cleaners from Vietnam, reflecting a year-on-year increase of 54.1 percent.
In contrast, imports from China amounted to 1.293 million units, indicating a year-on-year decrease of 51.7 percent. This marks the first time that Vietnam has surpassed China in terms of export volume of household vacuum cleaners to the United States. The report notes that US imports from Vietnam and other countries are on the rise due to manufacturers relocating their production away from China.
The initial catalyst for this shift in manufacturing out of China can be attributed to the imposition of tariffs on Chinese goods by former US President Donald Trump. Factors such as labor shortages, rising wages, and increased costs in China have also played a role. Under the Biden administration, the decoupling of US-China trade has accelerated, driven by concerns over issues such as the chip war and China’s involvement with Taiwan, prompting the pursuit of an economic security agenda.
In a March report, analysts from Morgan Stanley emphasized that escalating labor costs in China, geopolitical tensions, and human rights concerns have compelled numerous companies to diminish their reliance on Chinese manufacturing.