1) Michael Hart, president of the American Chamber of Commerce in China, told Sinical China: “I don't believe people will leave for a couple of reasons. One, they have invested in supply chains and built them up with their suppliers. Number two, there are no quick, easy replacement markets.”
Exhibit A is Elon, the world's richest man and US shadow president-elect. More than half of Teslas are made in China. How can you decouple or even de-risk from that?
2) "Alarmed by Washington’s decoupling impulse, China has also made remarkable progress in diversifying overseas markets. The proportion of U.S. imports from China has dropped from 20% to 13% over the past six years. In contrast, the percentage of China’s exports to emerging markets saw a noticeable rise from 42% to 50% within the same time span."
One big difference this time around is the rate of economic growth in ASEAN, South Asia, and Africa (https://www.visualcapitalist.com/fastest-growing-emerging-markets-2024-2029/). Several countries in these regions are members of China's Belt and Road Initiative and prefer working with China over the US.
3) “China’s industrial upgrading is driving out some of the low-end production capacity. Even so, emerging manufacturing centers like Mexico and Vietnam are in no position even to replace China’s city of Dongguan, not for the next decade or two.”
Guangdong province is so much more productive for manufacturing than anywhere outside China.
4) "Because of the tariff barrier, the exports of finished Chinese NEVs to America have now become virtually non-existence. But the U.S. continues to rank first among China’s export destinations for NEV-related products like batteries, electric motors and electric control systems. It is a preview of Trump tariffs 2.0, which adds to American consumers’ burdens, but fails to cut exposure to Chinese supply chains."
The worst part is that, protected from competition, US EVs will only become more expensive and less competitive compared to Chinese EVs. The tariffs hurt US industry most in the end.
1) Michael Hart, president of the American Chamber of Commerce in China, told Sinical China: “I don't believe people will leave for a couple of reasons. One, they have invested in supply chains and built them up with their suppliers. Number two, there are no quick, easy replacement markets.”
Exhibit A is Elon, the world's richest man and US shadow president-elect. More than half of Teslas are made in China. How can you decouple or even de-risk from that?
2) "Alarmed by Washington’s decoupling impulse, China has also made remarkable progress in diversifying overseas markets. The proportion of U.S. imports from China has dropped from 20% to 13% over the past six years. In contrast, the percentage of China’s exports to emerging markets saw a noticeable rise from 42% to 50% within the same time span."
One big difference this time around is the rate of economic growth in ASEAN, South Asia, and Africa (https://www.visualcapitalist.com/fastest-growing-emerging-markets-2024-2029/). Several countries in these regions are members of China's Belt and Road Initiative and prefer working with China over the US.
3) “China’s industrial upgrading is driving out some of the low-end production capacity. Even so, emerging manufacturing centers like Mexico and Vietnam are in no position even to replace China’s city of Dongguan, not for the next decade or two.”
Guangdong province is so much more productive for manufacturing than anywhere outside China.
4) "Because of the tariff barrier, the exports of finished Chinese NEVs to America have now become virtually non-existence. But the U.S. continues to rank first among China’s export destinations for NEV-related products like batteries, electric motors and electric control systems. It is a preview of Trump tariffs 2.0, which adds to American consumers’ burdens, but fails to cut exposure to Chinese supply chains."
The worst part is that, protected from competition, US EVs will only become more expensive and less competitive compared to Chinese EVs. The tariffs hurt US industry most in the end.