Roland Rajah & Ahmed Albayrak
The impact of tariffs
Limited growth in China’s imports also highlights that its deepening trade relationships largely reflect China’s growing dominance as a source of imports for other economies, rather than as a source of demand for other economies’ exports. Almost 80 per cent of economies imported more from China than from the United States in 2023. Conversely, the United States has become an even more important source of demand for other economies’ exports, reflecting a strong US economy but also the impact of its tariff hikes on China, which has led the United States to import a lot more from other economies instead, especially Mexico and Vietnam. Based on the latest data, the United States remains a larger export destination than China for more than half of all economies.
However, the impact of tariffs on trading relationships and US–China economic competition is complex. In one sense, tariffs have strengthened America’s importance as an export destination. In another sense, the tariffs also mean China is exporting more to other economies, both as alternative markets and as an indirect way of exporting to the United States via parts and components going into products ultimately destined for America.
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