Analysts at Wells Fargo, studied the impact of US tariffs on Chinese imports. They concluded that winners vary by industry, but the key benefactors appear to be Vietnam, Mexico and the Eurozone.
Key Quotes:
“When China joined the World Trade Organization in 2001, the U.S. trade deficit with China was about $83 billion. That deficit ballooned to more than four and-a-half times that amount over the 16 years to $375 billion in 2017. The tariffs imposed on Chinese imports have turned that trend around as the United States has imported less from China in the first four months of this year.”
“But the United States is not importing less overall. In fact, since the start of 2017, the trade deficit has widened 16.8%. With no demonstrable evidence that U.S. domestic production is making up for the drop-off in Chinese goods imports, the trade data tell us where U.S. importers are turning.”
“The winners vary by industry as we have endeavored to describe in this report, but the key benefactors are Vietnam, Mexico and the Eurozone. Whether or not the overnight shift to Vietnam for a number of key categories is a genuine transition or just a shell game is beyond the scope of this report. Perhaps the larger point here however is rather than spurring domestic production, the tariffs are instead shifting global supply chains to other foreign trading partners.”
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