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Levies now cover about $250 billion a year in goods—down from $370 billion—as U.S. companies shift purchases elsewhere
Containers at a port in Lianyungang, China. Other nations are benefitting as fewer Chinese goods come into the U.S.
PHOTO: HECTOR RETAMAL/AGENCE FRANCE-PRESSE/GETTY IMAGES
By Josh Zumbrun
Updated May 12, 2021 2:32 pm ET
WASHINGTON—U.S. tariffs have led to a sharp decline in Chinese imports and significant changes in the types of goods Americans buy from China, new data show, with purchases of telecommunications gear, furniture, apparel and other goods shifting to other countries.
Nearly two-thirds of all imports from China—or roughly $370 billion in annual goods—were covered by tariffs imposed by the U.S. in 2018 and 2019. Tariffs now cover just half of Chinese exports to the U.S., or about $250 billion in goods annually, as U.S. companies buy more from other countries, according to a Wall Street Journal analysis of information from Trade Data Monitor.
The Trump administration imposed the levies in 2018-19, aiming to boost U.S. factory production by making Chinese imports more expensive for the American companies that bring them in. That so-called re-shoring of manufacturing hasn’t happened in any appreciable way, economic data show, as U.S. companies instead turned to other countries in Asia for supply.
Vietnam has been an especially big beneficiary. It now ranks No. 6 globally for imports to the U.S., up from 12th as recently as 2018.
“If the goal was to reduce imports from China then it succeeded,” said Craig Allen, president of the U.S.-China Business Council, which represents U.S. companies that do business in China. “But if the goal was to increase manufacturing employment in the United States I don’t see any evidence that that’s happened. If the goal was to increase imports from other countries in Asia or increase manufacturing employment in Vietnam, it’s succeeded.”
Semiconductors are a prime example of an item targeted early in the trade war that has been on the decline from China, but seen strong growth from Vietnam, Taiwan and Malaysia.
Of the Chinese goods hit by tariffs, the biggest impact has been in telecom equipment and computer accessories, where imports are down about $15 billion each from their peaks in 2018, the Journal analysis found.
Tariff revenue paid to the U.S. Treasury by importers has dropped as a consequence. The U.S. collected $66 billion from tariffs in the 12 months ended in March, down from a peak of $76 billion in February 2020.
Imports of non-tariffed items from China have begun to pick up in recent months, after a global downturn in trade triggered by the Covid-19 pandemic. Even so, imports from China overall were at $472 billion for the 12 months ended March 31, compared to a peak of $539 billion in 2018.
“The trade war has had a more enduring negative impact [on Chinese imports] than the pandemic,” said Adam Slater, the lead economist for Oxford Economics. “The effects of the pandemic are starting to wear off, but the longer-term impact of the trade war remains.”
The U.S. and China signed an agreement to end the trade war in 2020, but the U.S. kept tariffs in place as leverage to ensure compliance with the pact by Beijing, which also retained its tariffs on U.S. exports to China.
Beijing has pressed for dropping the tit-for-tat tariffs. Though the levies are paid by U.S. companies, Chinese factories can lose out on business in favor of rival factories in countries including Vietnam, Malaysia and Mexico. The trade war took direct aim at Beijing’s ambitions to become a leader in advanced manufacturing technologies such as semiconductors and electric vehicles.
At a hearing Wednesday, senators pressed U.S. Trade Representative Katherine Tai on whether the Biden administration plans to continue the tariffs, with some saying the levies were hurting businesses in their districts. Ms. Tai was also asked to restore a now-expired process in which companies could seek to have tariffs waived on certain products.
Ms. Tai said her office was conducting a “top-to-bottom review” of tariffs that would include the exclusion process, and that companies “will be able to engage and tell us exactly what their concerns are and what their plans are.”
In a March interview with The Wall Street Journal, Ms. Tai said the administration wasn’t ready to lift tariffs on Chinese imports in the near future.
“No negotiator walks away from leverage, right?” she said.
The Trump administration imposed the tariffs in four waves, known as tranches. Each tranche listed thousands of imports that would be subject to the duties.
The Office of the U.S. Trade Representative said the tariffs affected $370 billion in annual trade, but it hasn’t updated those figures as trade changed.
www.wsj.com
Containers at a port in Lianyungang, China. Other nations are benefitting as fewer Chinese goods come into the U.S.
PHOTO: HECTOR RETAMAL/AGENCE FRANCE-PRESSE/GETTY IMAGES
By Josh Zumbrun
Updated May 12, 2021 2:32 pm ET
WASHINGTON—U.S. tariffs have led to a sharp decline in Chinese imports and significant changes in the types of goods Americans buy from China, new data show, with purchases of telecommunications gear, furniture, apparel and other goods shifting to other countries.
Nearly two-thirds of all imports from China—or roughly $370 billion in annual goods—were covered by tariffs imposed by the U.S. in 2018 and 2019. Tariffs now cover just half of Chinese exports to the U.S., or about $250 billion in goods annually, as U.S. companies buy more from other countries, according to a Wall Street Journal analysis of information from Trade Data Monitor.
The Trump administration imposed the levies in 2018-19, aiming to boost U.S. factory production by making Chinese imports more expensive for the American companies that bring them in. That so-called re-shoring of manufacturing hasn’t happened in any appreciable way, economic data show, as U.S. companies instead turned to other countries in Asia for supply.
Vietnam has been an especially big beneficiary. It now ranks No. 6 globally for imports to the U.S., up from 12th as recently as 2018.
“If the goal was to reduce imports from China then it succeeded,” said Craig Allen, president of the U.S.-China Business Council, which represents U.S. companies that do business in China. “But if the goal was to increase manufacturing employment in the United States I don’t see any evidence that that’s happened. If the goal was to increase imports from other countries in Asia or increase manufacturing employment in Vietnam, it’s succeeded.”
Semiconductors are a prime example of an item targeted early in the trade war that has been on the decline from China, but seen strong growth from Vietnam, Taiwan and Malaysia.
Of the Chinese goods hit by tariffs, the biggest impact has been in telecom equipment and computer accessories, where imports are down about $15 billion each from their peaks in 2018, the Journal analysis found.
Tariff revenue paid to the U.S. Treasury by importers has dropped as a consequence. The U.S. collected $66 billion from tariffs in the 12 months ended in March, down from a peak of $76 billion in February 2020.
Imports of non-tariffed items from China have begun to pick up in recent months, after a global downturn in trade triggered by the Covid-19 pandemic. Even so, imports from China overall were at $472 billion for the 12 months ended March 31, compared to a peak of $539 billion in 2018.
“The trade war has had a more enduring negative impact [on Chinese imports] than the pandemic,” said Adam Slater, the lead economist for Oxford Economics. “The effects of the pandemic are starting to wear off, but the longer-term impact of the trade war remains.”
The U.S. and China signed an agreement to end the trade war in 2020, but the U.S. kept tariffs in place as leverage to ensure compliance with the pact by Beijing, which also retained its tariffs on U.S. exports to China.
Beijing has pressed for dropping the tit-for-tat tariffs. Though the levies are paid by U.S. companies, Chinese factories can lose out on business in favor of rival factories in countries including Vietnam, Malaysia and Mexico. The trade war took direct aim at Beijing’s ambitions to become a leader in advanced manufacturing technologies such as semiconductors and electric vehicles.
At a hearing Wednesday, senators pressed U.S. Trade Representative Katherine Tai on whether the Biden administration plans to continue the tariffs, with some saying the levies were hurting businesses in their districts. Ms. Tai was also asked to restore a now-expired process in which companies could seek to have tariffs waived on certain products.
Ms. Tai said her office was conducting a “top-to-bottom review” of tariffs that would include the exclusion process, and that companies “will be able to engage and tell us exactly what their concerns are and what their plans are.”
In a March interview with The Wall Street Journal, Ms. Tai said the administration wasn’t ready to lift tariffs on Chinese imports in the near future.
“No negotiator walks away from leverage, right?” she said.
The Trump administration imposed the tariffs in four waves, known as tranches. Each tranche listed thousands of imports that would be subject to the duties.
The Office of the U.S. Trade Representative said the tariffs affected $370 billion in annual trade, but it hasn’t updated those figures as trade changed.
WSJ News Exclusive | U.S. Tariffs Drive Drop in Chinese Imports
U.S. tariffs have led to a sharp decline in imports from China and significant changes in the types of goods Americans buy from China, new data show, with purchases of furniture, telecommunications gear, apparel and other goods shifting to other countries.
www.wsj.com
