America reduces dependence on Chinese goods

The US increased its imports of goods in April, but the share of Chinese goods fell to its lowest level since 2006.

A report released on June 7 by the US Department of Commerce showed that the country's imports increased by 1.5% to nearly $324 billion in April. The main drivers were cars and auto parts, industrial materials, mobile phones and household appliances.

In contrast, exports fell 3.6% in April, led by industrial materials. Exports of consumer goods also fell, including pharmaceuticals, soybeans, rice and frozen fruit juice.

China’s share of U.S. trade continues to decline. Chinese goods now account for 15.6 percent of U.S. imports in the 12 months through April, the lowest figure since October 2006.

In recent years, American companies have sought alternatives to Chinese goods. Rising geopolitical tensions between the two countries led former US President Donald Trump to impose import tariffs on thousands of Chinese goods, which the Biden administration has since maintained.

"The US is looking to diversify its trade channels. The relationship has deteriorated significantly over the past few years," said Lawrence Werther, chief economist at Daiwa Capital Markets Americas.

China’s decline in market share has also meant more goods from Europe, Mexico and other Asian countries. In the 12 months through April, the share of goods from the group of 25 Asian and African countries was nearly 25%.

On June 7, China's General Administration of Customs also released trade data, showing that the country's exports fell 7.5% in May compared to the same period last year. This raised concerns about China's ability to recover after lifting its Zero Covid policy last year.

Globally, trade in goods is also sluggish, as central banks raise interest rates to curb inflation. Consumers are also shifting their spending to the services sector after the pandemic.

Ha Thu (according to WSJ)

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