Source: Flora Haberkorn et al., “Global trade patterns in the wake of the 2018-2019 U.S.-China tariff hikes,” Board of Governors of the Federal Reserve System, FEDS Notes, April 12, 2024.
Commentary: A recent article by Flora Haberkorn et al. of the Federal Reserve Board of Governors analyzed how global trade dynamics have evolved since the U.S.–China tariff hikes of 2018–2019. Based on data from the U.S. Bureau of Economic Analysis, the U.S. Census Bureau, and the UN Comtrade database, their analysis suggests that while the tariffs may have decreased Chinese imports to the United States, Chinese imports also increased in other major U.S. trading partners. As a result, global reliance on China has, on balance, remained unchanged.
The authors’ first major finding notes that China’s share of goods imports to the United States has, unsurprisingly, experienced a noticeable decrease in recent years. In particular, China’s share of U.S. goods imports consistently rose from less than 5 percent in 1990 to a high point of 22 percent in 2017. By December 2023, China’s share of U.S. goods imports had to 14 percent, an 8 percentage point decrease from the 2017 high point. The authors note that between 2020 and 2022, tariffed goods accounted for all of the decrease in China’s share of goods imports. However, in 2023, non-tariffed goods began to account for some of the decline as well.
The authors also looked at China’s share of imports to other major U.S. trading partners. The member countries of the Association of Southeast Asian Nations (ASEAN) saw the greatest increase in their share of goods imports from China. Those countries are Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam. Collectively, the ASEAN members saw the share of their goods imports from China increase by about 3 percentage points between 2018 and 2022. Over that same period, Mexico and Canada saw their shares of goods imports from China increase by about 2 percentage points and 1 percentage point, respectively. The European Union also saw a vary small increase in its share of goods imports from China over the same period. In each case, the increase in China’s share of goods imports mostly consisted of U.S.-tariffed goods. In sum, while the U.S. may be importing fewer goods directly from China, the U.S. may still import more goods with Chinese-made products and components indirectly via other trading partners.
