What trade war? China’s export juggernaut marches on

By AGNES CHANG and DAISUKE WAKABAYASHI

As President Donald Trump has imposed steep tariffs on China, American importers are buying much less.

But the rest of the world is making up the difference, buying more from China than ever.

China has offset the decline from America with breathtaking speed. Shipments to other parts of the world have surged this year, demonstrating that China’s manufacturing dominance will not be easily slowed. Chinese exports are on track to reach another record this year.

That’s because China was prepared. It has been seeking out new customers for years, and its massive manufacturing investment allows it to sell goods at low prices.

“They should not be surprised that China is able to find markets outside of the advanced economies,” said Mary Lovely, a senior fellow at the Peterson Institute for International Economics.

Last week, Trump reduced the tariffs he imposed on China, though they remain at heights not seen in decades. He insists that his tariffs will force a revival of American factories and create jobs — a pledge that is contested by many economists and manufacturing experts. It is also unclear how effective his policies will be in stemming the flow of goods that originate in China and route through other countries before arriving in the United States.

The rest of the world is caught between the two superpowers. Some countries, including Vietnam (with imports from China up 28%) and members of the European Union (up 11%), are deeply concerned about the risk posed by China’s exports to their own industries, and China faces a backlash in the form of tariffs in regions including Europe. Other nations, like Argentina (up 57%) and Nigeria (up 45%), are buying low-cost Chinese technology to modernize their economies but running up wider trade imbalances with China.

For years, Americans have turned to China to outfit their homes and stock their offices. While the volume of Chinese exports remains enormous, the declines this year are widespread and drastic. The United States is buying less of almost everything from China.

Take, for example, plastic goods. China exported $5 billion of those products — from laundry baskets to plastic forks — to the United States between July and October, down 16% from a year earlier.

Last year, over a quarter of all Chinese-made furniture, including mattresses and lamps, went to the United States; now that number is closer to a fifth.

China’s exports of phones (down 47%) and computers (down 54%) to the United States were among the categories that declined the most. Trump exempted such consumer electronics from most of his tariffs this year, but Apple, Hewlett-Packard and other manufacturers have continued to diversify their supply chains outside China. The United States now gets most of its smartphones from India and its laptop computers from Vietnam, according to the latest U.S. government data.

Meanwhile, China is flooding developing economies in Africa (up 42%) and South America (up 13%) with cars, trucks, bikes and ships; it is expanding in Europe (up 7%) and Asia (up 14%) by shipping batteries and iron products.

China’s growing exports to Africa come as Trump has pulled back aid to the continent. Chinese companies are sacrificing profits by selling to Africa at low prices, but are, in many cases, gaining influence.

“The margins may not be as high,” said Ilaria Mazzocco, a deputy director at the Center for Strategic and International Studies. “But for those markets, it’s entirely transformational to have access to this technology at affordable prices.”

There are exceptions to China’s ability to successfully make up for lost revenue by selling to American customers and redirecting exports elsewhere. Chinese companies, for example, make most of the world’s toys, and the United States has long been its largest customer. Over the summer, China’s exports of video game consoles, costumes and board games fell $3.5 billion over last year, mostly because of a steep decline in shipments to the United States.

It remains to be seen how effective Trump will be in pressuring countries, especially those in Asia, to reject rerouted Chinese exports as part of trade negotiations. These workarounds limited the impact of his trade measures with China during his first term.