8-2-2024 (WASHINGTON) China has lost its position as the top source of imported goods in the United States, a title it had held since 2008, according to official trade data released on Wednesday. Mexico has now taken the lead, highlighting the reduced economic reliance of the United States on China. However, the Biden administration has emphasized that it does not intend to decouple from the Asian power.
The non-seasonally adjusted trade balance data released by the Commerce Department revealed that in 2023, goods exported from China to the US experienced a 20.3% drop from the previous year, amounting to $427.23 billion and accounting for 13.9% of total imports. In contrast, US imports from Mexico increased by 4.6% from 2022, reaching $475.61 billion and comprising 15.4% of the total.
China’s share of total imports had exceeded 20% between 2015 and 2018 in terms of trade value. However, last year, China was followed by Canada at 13.7%, Germany at 5.2%, and Japan at 4.8%.
The Biden administration views China as a geopolitical rival and has implemented various trade restrictions on national security grounds. The decline in China’s share of US imports can be attributed to the multiple rounds of tariffs imposed by former President Donald Trump on Chinese goods.
Furthermore, the data indicated that the US trade deficit with China in 2023 reached its lowest level since 2010, decreasing by 26.9% to $279.42 billion. This decline was driven in part by a decrease in imports from China, which was influenced by the realignment of global supply chains following the Covid-19 pandemic.
The pandemic exposed vulnerabilities in supply chains, particularly in the shortage of semiconductors and other essential industrial products. As a result, there has been an acceleration in diversifying supply chains away from China. The concept of “friendshoring,” advocated by the US to strengthen economic ties with allies and trusted countries, has also played a role in this shift.
