U.S. Trade policy and the restructuring of global production networks: A case study of industrial relocation from China to India

Trade policy uncertainty under the Trump administration has triggered structural shifts in global production networks, with uneven effects across emerging economies. Using U.S.China reciprocal tariffs as a case, we apply a global multi-regional input-output model coupled with trade network analysis to assess short-term disruptions and medium-term relocation trends. Our findings highlight three key patterns: (1) Short-term reciprocal tariffs cause uneven shocks, with economies more integrated into U.S.centered networks experiencing milder impacts than China-linked ones; (2) Medium-term restructuring benefits countries closer to advanced economies, with India gaining prominence as a manufacturing and supply chain participant; (3) Sectoral shifts show India's growth in technology-intensive sectors alongside contraction in traditional East Asian hubs. These findings indicate that trade policy uncertainty serves as a structural catalyst for reconfiguring global production, driven not solely by cost but also by alignment, resilience, and institutional capacity.