The annual reshoring index from consulting firm Kearney shows that the US government’s efforts to lessen its reliance on China, combined with price-conscious American consumers, have caused a shift in imports towards more reasonably priced goods from nations other than China. By the end of 2023, the percentage of US imports from “low-cost Asian countries excluding Japan and South Korea” will undoubtedly be lower than 50% of Chinese goods, according to experts.
The two largest trading partners are China and the US. According to Kearney’s Reshoring Index, which uses US trade data, 50.7% of US imports of manufactured goods from Asian nations last year were Chinese products. This percentage represents a drop from over 70% in 2013.
The Kearney Index reveals that US imports from Vietnam have increased over the past five years and by three times over the past ten years, while Chinese exports have decreased. Additionally, a larger portion of Asian goods are now consumed in the United States thanks to Malaysia, Taiwan, and India. According to data from the China Chamber of Commerce for Import and Export of Machinery and Electronics, the United States imported from Vietnam 1.356 million household vacuum cleaners in February of this year, a rise of 54.1% over the same month last year.
Donald Trump, the former US president, imposed taxes on Chinese imports, which served as the initial impetus for the relocation of manufacturing from China. A contributing factor was also China’s worker scarcity as well as rising prices and wages. As a result of worries over topics like the chip war and China’s engagement with Taiwan, the decoupling of US-China trade has intensified under the Biden administration, motivating the pursuit of an economic security agenda.
Morgan Stanley analysts noted in a study from March that a number of businesses have reduced their reliance on Chinese manufacturing due to increased labour costs in China, geopolitical unrest, and human rights concerns.
