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Is US trade policy reshaping global supply chains?

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  • Freund, Caroline
  • Mattoo, Aaditya
  • Mulabdic, Alen
  • Ruta, Michele

Abstract

This paper examines the reshaping of supply chains using detailed US 10-digit import data between 2017 and 2022. The results show that while US-China decoupling in bilateral trade is real, supply chains remain intertwined with China. Over the period, China's share of US imports fell from 22 % to 16 % as a result of US tariffs. US imports from China are being replaced with imports from large, developing countries with revealed comparative advantage in a product. In strategic industries, countries replacing China tend to be deeply integrated in China's supply chains and are experiencing faster import growth from China. Put differently, to displace China on the export side, countries must embrace China's supply chains. There is no consistent evidence of reshoring but evidence of nearshoring to border nations. Despite the significant reshaping, China remained the top supplier of directly imported goods to the US in 2022.

Suggested Citation

  • Freund, Caroline & Mattoo, Aaditya & Mulabdic, Alen & Ruta, Michele, 2024. "Is US trade policy reshaping global supply chains?," Journal of International Economics, Elsevier, vol. 152(C).
    • Handle: RePEc:eee:inecon:v:152:y:2024:i:c:s0022199624001387
    DOI: 10.1016/j.jinteco.2024.104011
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    5. Aaditya Mattoo & Ruta,Michele & W. Staiger,Robert, 2024. "Geopolitics and the World Trading System," Policy Research Working Paper Series 11009, The World Bank.
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    8. Luo, Changyuan & Wang, Ning, 2025. "U.S.-China trade frictions and supply chain reconstruction: Perspective from indirect links," Journal of International Money and Finance, Elsevier, vol. 151(C).
    9. Tiago Cavalcanti & Pedro Molina Ogeda & Emanuel Ornelas, 2025. "The US-China trade war creates jobs (elsewhere)," CEP Discussion Papers dp2098, Centre for Economic Performance, LSE.
    10. Adrian R. Mendoza, 2025. "Navigating turbulent waters: The Philippines’ global value chains experience amid trade wars," UP School of Economics Discussion Papers 202501, University of the Philippines School of Economics.
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    12. Ma. Joy V. Abrenica & Anthony G. Sabarillo, 2024. "How might China-US industrial policies affect the Philippines?: a quantitative exercise," Philippine Review of Economics, University of the Philippines School of Economics and Philippine Economic Society, vol. 61(2), pages 171-198, December.

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