U.S. Retail Giants Depend on Chinese Supply Chains
To the average person, China’s huge trade surplus is a result of sending enormous amounts of “cheap useless stuff” and “fidget spinners” through Temu.
But that couldn’t be further from the truth.
Most of the labor-intensive, low-value, low-cost manufacturing that helped build China in the 90s already moved to other neighboring countries.
Looking at the list of top categories of China exports to the US, 3 of top 5 are high value products (home appliances, electronics, optical/medical instruments).
China depends on the US for a large portion of its higher value exports. That’s problematic for Chinese manufacturers who will have to make contingencies in case US buyers cannot absorb the tariffs.
But it’s also difficult to replicate these higher value manufacturing capabilities anywhere else due to China’s insane level of tooling, factory automation, and supply chain mastery.
This means, unless US buyers/importers absorb the tariffs, consumers will see a number of empty store shelves at $Target(TGT)$ $Wal-Mart(WMT)$ $Costco(COST)$ soon.
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