These 2 Countries Are Benefitting From U.S. Tariffs on China

Spotlight:

• The U.S. saw an increase in imports from 2 countries in Asia in light of Tariffs on China
• The 2 countries saw a notable increase in the exportation of office machinery, electrical machinery, communication equipment, transport equipment, and more to the U.S.
• A substantial drop in U.S. imports from China in multiple trade sectors

Increased Exports From Taiwan and Vietnam

In the first half of 2019, tariffed products from China saw a 25% drop in imports to the U.S.—creating a $35 billion dollar hole for other countries to fill.

Taiwan and Vietnam capitalized on the China tariffs to increase their exportation of products and components to the U.S. and to fill that $35 billion China-sized hole.

When comparing the first half of 2019 to the first half of 2018, 6 sectors saw a substantial decrease in U.S. imports from China ranging from 10% to 65%.

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Taiwan

Comparing 2018 to 2019, the small country increased its exports to the U.S. by 17%.

In the first half of 2019, Taiwan led the world in office machinery exports to the U.S., totaling in $2.8 billion. Taiwan exports to the U.S. also totaled as:

• $491 million in comm. equipment
• $287 million in electrical machinery
• $183 million in precision instruments
• $122 million in various machinery
• $14 million in transport equipment

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As compared to 5 other leading exporters to the U.S., Taiwan had a significant share of office machinery exports in the first half of 2019. When paired with the 65% decrease in U.S. office machinery imports from China, Taiwan's 17% increase in exports to the U.S.—especially its $2.8 billion share of office machinery exports—appears a likely effect of the U.S. tariffs on China.

As the tariffs continue to be reviewed by Biden's administration, keep an eye on Taiwan. The small country may be poised to become an even greater alternative to China.

Vietnam

Comparing 2018 to 2019, Vietnam exports to the U.S. increased by 35%. Vietnam responded to the China tariffs in the first half of 2019 by leading the world in communication equipment exports to the U.S., which totaled $1.1 billion. Other notable export numbers from Vietnam:

• $400 million in electrical machinery exports to the U.S.
• $60 million in office machinery exports to the U.S.

The large 35% increase in U.S. imports from Vietnam is better emphasized by the figure below, which compares Vietnam with Taiwan and other leading exporters to the U.S.

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While Vietnam had the highest increase in exports to the U.S., Taiwan had a bigger dent in the electronic and mechanical parts industry.

Vietnam held a firm grasp on the communication equipment sector, but Taiwan had a bigger footprint in the electrical machinery, precision instruments, various machinery, and office machinery sectors.