The trade war has led to a 62% drop in tech electronics imports from China to the US since 2018.

Former US President Donald Trump has imposed 25% tariffs on Chinese servers, modems, routers, wireless headsets and smartwatches as he ignited the trade war.

From this point on, US imports of information technology hardware and consumer electronics from China fell 62% while imports from the rest of the world were 60% higher, according to research by the Institute of Technology. Peterson International Economics (PIIE) released on Thursday.

The report also shows that the US import share of these products from China has been cut by nearly two-thirds, from 38% to 13% in four years. Meanwhile, Mexico and Taiwan have significantly increased their market share.

However, with semiconductors, the US has not yet completely replaced the loss of Chinese imports, according to PIIE. China accounted for 47% of US chip imports before July 2018, but fell to 39% soon after the tariffs were imposed.

Chinese factories specialize in the production of traditional chips, which have lower profit margins. According to PIIE, these products are not attractive to chip giants like TSMC, Samsung, which are looking to produce more advanced, more profitable chips.

PIIE said that traditional chips – which are not very profitable to produce – so if the US does not want to import them from China, it is not known which units will participate in production. This is exactly the question that American industry, like the auto sector, faces because it is still in high demand.

Automotive is one of the industries that has had to scale back production due to a global chip shortage. Semiconductor equipment supply has decreased during Covid-19 due to factory closures. Sales of electronic devices then skyrocketed as companies worked remotely, leading to worsening shortages.

Source: Vietnam Posts English

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