This file photo shows the Space Needle towering in the background beyond moored container ships in Elliott Bay near downtown Seattle.
WASHINGTON – New data show U.S. tariffs have caused a sharp drop in Chinese imports. A Wall Street Journal report Wednesday analyzed the impact of the tariffs on U.S. imports from China and also saw a big shift in the kinds of goods Americans are buying from China, with purchases of telecommunications equipment, furniture, clothing and other goods shifting to other countries.
The U.S. tariffs imposed in 2018 and 2019 cover two-thirds of imports from China (about $370 billion in goods). An analysis of information from Trade Data Monitor, a U.S. trade data monitoring firm, reported in the Wall Street Journal on Wednesday showed that the current tariffs cover only half of imported Chinese goods, or about $250 billion a year, as U.S. companies buy more products from other countries.
The Trump administration imposed those tariffs on Chinese goods in 2018-2019 in an effort to spur production in U.S. factories by making Chinese goods more expensive for U.S. importers. That’s the so-called “the reshoring of manufacturing” that hasn’t happened in any obvious way, with economic data showing that U.S. companies are turning to other countries for supplies.
The Wall Street Journal reports that Vietnam is one of the biggest beneficiaries of such a change.
Vietnam is now the sixth-largest source of U.S. imports, while it was the 12th-largest source of U.S. goods worldwide back in 2018.
Craig Allen, president of the National Committee for U.S.-China Trade, told the Wall Street Journal, “If the goal is to reduce imports from China, it’s succeeded.”
But Allen went on to say, “If the goal is to increase U.S. manufacturing jobs, then I don’t see any evidence of that happening. If the goal was to increase imports from other Asian countries or to increase jobs in Vietnam, then he succeeded.”
According to the Wall Street Journal, a prime example of the initial targeting of China in the trade war was semiconductors, where Chinese semiconductor imports have been declining but Vietnam, Taiwan and Malaysia have seen strong growth.
The Wall Street Journal analysis found that among the Chinese goods hit by the tariffs, the biggest impact was on telecommunications equipment and computer parts, both of which saw a $15 billion drop in imports compared to their 2018 peaks. As a result, tariff revenue paid to the U.S. Treasury by importers fell. For the 12 months ending in March, the U.S. received $66 billion in revenue from tariffs, down from a peak of $76 billion in February 2020.
Chinese imports of non-tariff goods have begun to pick up in recent months. Nonetheless, imports from China totaled $472 billion in the 12 months to the end of March, compared with a peak of $539 billion in 2018.
Adam Slater, chief economist at the Oxford Economics Institute, was quoted in the Wall Street Journal report as saying, “The trade war has had a more lasting negative impact on Chinese imports than a pandemic.”
Slater said the effects of the pandemic are beginning to wane, but the long-term effects of the trade war remain.
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