Page 37 - CII ARTHA_Next Generation_Web

Shifts in Global Trade countries have been paused for 90 days, the disruptions caused were 58 per cent lower than its level in 2021 and 80 per cent doubled, increasing from 2.0 per cent to 4.0 per cent in the
said period. India witnessed its share to rising to 3.1 per cent
by these tariffs have impacted financial markets and risk
lower from its level in 2017 . In contrast, US imports of these
3
Dynamics escalating into a full-blown trade war. Nevertheless, while tariffs same products from the rest of the world rose by 61 per cent in 2024 from 2.2 per cent in the comparable period, and
between 2021 and 2024, underscoring the shift in sourcing
Thailand saw its share rise from 1.3 per cent to 2.0 per cent
pose challenges, they can also present new trade opportunities
for certain nations, potentially reshaping global trade dynamics strategies. in 2024. While the share of these countries in the overall US
Global trade is undergoing a significant transformation, with and benefiting specific sectors. import basket remains relatively small, the growth they’ve
emerging economies and new alliances reshaping traditional As both of US key trading partners Canada and China experienced is noteworthy, reflecting the ongoing shifts in
trade patterns. More recently, the United States and other This is borne out from the fact that in 2018 and 2019 too, the experience a decline in their share of US imports, several global trade patterns.
regions are implementing policies that are further impacting US and China had sparked a trade war by imposing tariffs on countries have seized the opportunity to expand their exports
these shifts, influencing global production and trade. approximately US$450 billion worth of goods. This conflict to the US. Notably, Korea, Vietnam, India and Thailand, have This could be the onset of a newly globalized world, one that
1
disrupted decades of progress toward reducing global trade seen a marked rise in their share of US imports. is adapting to shifting geopolitical forces, resulting in the
barriers and led to a notable decline in direct trade between emergence of new trade partnerships and growing export
TARIFFS ALSO PRESENT NEW TRADE the two nations—a trend that persists today. However, the For instance, South Korea’s share rose to 4.2 per cent in 2024 volumes from smaller economies.
OPPORTUNITIES FOR CERTAIN NATIONS trade war also created unexpected opportunities for countries from 2.9 per cent a decade ago, while for Vietnam’s share
not directly involved. Many bystander nations seized the chance
to boost their exports of tariffed goods to the US, China and
To be specific, since taking office, President Donald Trump has other markets. Countries which have witnessed a rise in their share in US imports (%)
reinstated several policies aligned with his "America First" 5.0
agenda, imposing significant trade measures. The US has In recent years, the share of US trade (imports and exports)
recently implemented a 10 per cent baseline tariff on imports with China and Canada has sharply declined, while trade with 4.2
from across all countries, with much higher tariffs on specific Mexico has continued to rise. Remarkably, Canada, Mexico, and 4.0 4.0
countries, notably a 145 per cent duty on imports from China. China together accounted for approximately 41 per cent of
China has retaliated with a 125 per cent tax on US products. total US trade in 2024, although the share moderated from 45
Additionally, tariffs are also levied on trade with Canada and per cent a decade ago. 3.0 3.1
Mexico. Although the reciprocal tariffs imposed on over 200

2.0 2.0
Share of top three countries in total trade of US (%)
16.0 1.0
15.6
15.0
0.0
14.2 2019 2020 2021 2022 2023 2024
14.0
Korea Vietnam India Thailand
13.0
Source: ITC Trade Map
12.0

11.2
11.0

10.0
2019 2020 2021 2022 2023 2024
China Mexico Canada
Source: ITC Trade Map

As the US reduces its reliance on Chinese goods, the imports
US IMPORT PATTERNS SHOW A DECLINE IN from China have dropped by almost 14.3 per cent, falling to
CHINESE IMPORTS AND AN INCREASE IN US$463 billion in 2024 from the high of US$540 billion in 2021
IMPORTS FROM DEVELOPING COUNTRIES and US$526 billion in 2017. Meanwhile, US imports from rest
of the world (excluding China) have surged by a whopping 20.9
per cent compared to 2021. This also marks an exponential of
China’s share of US imports has significantly declined due to
the imposition of US tariffs, with American businesses 54.1 per cent from 2017 levels.
increasingly turning to large developing countries that possess 2
a revealed comparative advantage. A closer look at the quantity of tariffed products , reveals that
the US imports from China of these tariffed products in 2024

1 https://dialogue.earth/en/business/32441-is-mexico-really-winning-the-us-china-trade-war/
2 Calculated by multiplying the quantity of imports with US MFN rate 3 2017 is considered as it is pre-trade war period

36 QUARTERLY JOURNAL OF ECONOMICS QUARTERLY JOURNAL OF ECONOMICS 37
APRIL 2025
APRIL 2025