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US companies reduce direct imports from China, but China remains embedded in United States supply chains, according to the paper at the Jackson Hole conference.
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Why China remains embedded in United States supply chain? [Photo: Bloomberg]
Why China Remains Embedded In United States?
SOURCE– China remains embedded in United States supply chains even though American companies have taken steps to reduce direct imports from China, according to the paper at the Federal Reserve Bank of Kansas City’s yearly Jackson Hole conference Saturday. The share of the United States imports from China has been decreasing.
Laura Alfaro’s paper from Harvard Business School and Davin Chor of Dartmouth College’s Tuck School of Business has documented a decrease in the share of United States imports from China and an equivalent increase in the share of United States imports from Vietnam and Mexico between 2017 and 2022. The United States government policies push shifts and tariffs, which aim at decoupling the American and Chinese economies.
The Chinese companies appeared to find ways to mitigate the impact through increased exports to and foreign direct investments in Vietnam and Mexico. The United States’ indirect supply chain links to China remain embedded together in some dimensions through China’s economic ties with Vietnam and Mexico. These indirect links its been intensifying, Alfaro and Chor wrote.
