Trump’s trade war shift away from Chinese manufacturing has reached tipping point.
The proportion of volume from suppliers in China, Hong Kong, and Korea has declined from 90% to 50% over the past decade, reflecting a long-term diversification of supply chains that picked up steam during the first Trump administration and trade war, according to an analysis from Wells Fargo Supply Chain Finance.
“From 2018 to 2020, the supplier diversification away from China nearly doubled after the first tariff actions,” said Jeremy Jansen, head of global originations at Wells Fargo Supply Chain Finance.
He said since the first trade war, the gradual increase in supply chain diversification away from China to the South Asia Pacific region has steadily grown.
“Based on our supplier counts, diversification is now 50/50 between the northern Asia Pacific region and the Southern,” Jansen said. “The migration of midsize suppliers can be tracked into Taiwan, Vietnam, Indonesia, Thailand, India, and Malaysia,” he added.
Imports from China to the U.S. have dropped by 26 percent year-over-year, according to data from freight intelligence firm SONAR, but trade volumes from China to the South Asia Pacific region have significantly increased.
According to Project 44, which tracks supply chain shifts, China’s trade in 2025 has increased to Indonesia by 29.2 percent, Vietnam by 23 percent, India by 19.4 percent and Thailand by 4.3 percent. In turn, year-over-year container trade volume to the U.S. is up 23 percent for Vietnam, 9.3 percent for Thailand, and 5.4 percent for Indonesia.
Data released by China on Monday showed that as its exports to the U.S. continued to decline in November, exports to ASEAN and EU nations rose over 8% and nearly 15%, respectively. Through the first 11 months of the year, China’s overall exports grew 5.4% compared to the previous annual period, leading to a trade surplus over $ trillion.
While it remains unclear what will happen to President Donald Trump’s tariffs plan with the U.S. Supreme Court decision pending and major companies already suing for refunds, in the short-term, the impact of Trump’s tariffs can be seen increasingly on business balance sheets, as U.S. importers are turning more to financial arrangements in an effort to preserve cash.
Source: cnbc