US bid to cut China dependence by bringing jobs home and shifting supply chains ineffective: analysts

Bilateral trade has continued at a high level overall, especially in computers and farm equipment, despite tariffs begun in 2018, report finds

Of the relatively few export manufacturing sectors witnessing a significant shift away from China, most have moved to Southeast Asia

Reading Time:3 minutes

Shipping containers in Oakland, California. US imports from China have declined in areas like telecommunications equipment and semiconductors due in part to the bilateral ‘tech war’. Photo: Bloomberg

Published: 7:01am, 1 Mar 2023Updated: 5:37am, 2 Mar 2023

A “reshoring” campaign waged in recent years to bring manufacturing jobs back to the United States from China is largely ineffective and a related “nearshoring” bid to shift production to Mexico and Canada away from America’s economic rival has yet to yield dividends, government, business and academic leaders said on Tuesday.

Despite 25 per cent tariffs imposed on Chinese products four years ago, the volume and value of US-China trade has only shifted slightly, according to experts and a report on Asian supply chains released by the Brookings Institution, a Washington think tank.

While there has been a modest decline in US imports from China in some areas – especially telecommunications equipment and semiconductors, due in part to the bilateral “technology war” – other areas such as computers and farm equipment have seen sizeable increases.

“The economic conflict between the US and China is more of a tech war than a trade war,” said David Dollar of Brookings and one of several co-authors of the report titled USMCA Forward 2023: Building more integrated, resilient, and secure supply chains in North America. “A few specific hi-tech categories have been affected a lot, while overall trade has continued at a high level.”

USMCA is short for the US-Mexico-Canada Agreement, which replaced the North American Free Trade Agreement in 2018.

US bid to cut China dependence by bringing jobs home and shifting supply chains ineffective: analysts

Bilateral trade has continued at a high level overall, especially in computers and farm equipment, despite tariffs begun in 2018, report finds Of the relatively few export manufacturing sectors witnessing a significant shift away from China, most have moved to Southeast Asia

Bilateral trade has continued at a high level overall, especially in computers and farm equipment, despite tariffs begun in 2018, report finds

Of the relatively few export manufacturing sectors witnessing a significant shift away from China, most have moved to Southeast Asia