China's Export Strategy Amid U.S. Tariffs

In a bold move to navigate around high U.S. tariffs, Chinese companies have significantly increased their shipments to the United States through Southeast Asia, leveraging the region's lower tariff rates.

Financial Times analysis reveals a sharp 43% drop in China's direct exports to the U.S. in May compared to the previous year. Conversely, China's overall exports saw a 4.8% rise, fueled by a 15% and 12% increase in shipments to ASEAN and the EU, respectively.

Historical Parallels

This tactic is reminiscent of the 2018 U.S.-China trade war, where a similar pattern emerged with U.S. imports from China decreasing while those from Vietnam and Mexico surged, indicating a strategic rerouting of Chinese exports.