Trump Prepares New Attack, 70% of Chinese Exports Threatened!
US President Donald Trump is expanding his trade strategy by targeting Chinese goods shipped through third countries, such as Vietnam and Mexico. According to a Bloomberg Economics analysis, this move could jeopardize up to 70% of Chinese exports to the US and potentially erode more than 2.1% of China's gross domestic product (GDP). This effort tightens controls on "transshipment" — a common practice in global supply chains where goods are processed or assembled in other countries before entering the US market.
Since the first trade war under Trump, China has increased its reliance on third countries to avoid direct tariffs. The share of Chinese value-added manufacturing shipped through other countries to the US jumped from 14% in 2017 to 22% in 2023. However, if Trump implements higher tariffs and stricter supply chain requirements on this route, the impact could be broader and more detrimental in the long run.
Bloomberg Economics states that tighter controls on shipments through third countries will exacerbate the economic damage caused by the trade war and could hamper China's future growth opportunities. Countries like Mexico, Vietnam, and even the European Union are now in a difficult position due to their involvement in global supply chains linked to China. Washington has also sent warning letters to partner countries, threatening additional tariffs starting August 1st if a bilateral agreement is not reached.
However, the effectiveness of these restrictions remains questionable. Analysts believe the US definition of domestic goods remains unclear, and product origin verification mechanisms are not well-structured. This uncertainty makes it difficult for many countries and businesses to respond appropriately to US policies and creates new concerns amidst an already sluggish global economy.
Source: Newsmaker.id
