Japan Nikkei Asian Review reported that, in order to bypass the tariffs, China made goods were found to have been shipped to Taiwan, Vietnam, or Mexico before they were sold to the U.S. In the first quarter of 2019, China’s exports to the U.S. dropped $15.2 billion or 12 percent. At the same time, goods sold by China to Taiwan, Vietnam, or Mexico increased significantly.
Nikkei Asian Review analyzed the data from the U.S. International Trade Commission and the International Trade Centre. It looked at the flow of goods in the U.S., China, and the rest of the world, especially the five categories that had the largest export declines from China to the U.S. These included machinery and parts, electronic equipment, furniture, toys, and automotive equipment and parts. It found that in the first quarter of 2019, China’s exports to the US in these five categories dropped US$12.2 billion or 16 percent. However the number of goods that China sold to developing countries and that then went from developing countries to the U.S. increased substantially, especially from Taiwan, Vietnam, and Mexico. The article reported that some companies in China shut down or reduced direct exports to the U.S. but they then sent raw materials and parts to other Asian countries or Mexico for final assembly or repackaging so they would have a different country of origin. Then they sold (these goods) to the U.S. The increased cases have concerned some Asian countries. In September last year, the Vietnamese authorities confiscated products that were actually “Made in China” but were labeled as “Made in Vietnam” which had a U.S. destination. On May 31, Trump announced an increase in tariffs on all imported goods from Mexico, partly due to the significant increase in the volume of goods that Mexico sold to the U.S.
Nikkei Asian Review concluded that Beijing may eventually lose the trade war due to changes in its production lines, personnel and supply chain. In April, China’s total exports fell by 3 percent. It is very difficult to make up for the decrease by increasing exports to countries in Asia and other regions.
Source: Aboluowang, June 2, 2019