China's Tech Exports to the US Plummet Amidst Trade Tensions, Asia Benefits
China's tech exports to the United States have experienced a significant drop, plummeting by 70% since the fourth quarter of 2024, largely due to tariffs imposed by former President Trump. However, strong global demand is keeping China's overall tech exports afloat, while other Asian nations are seeing a boost.
Impact of US Tariffs on Chinese Tech Exports
According to a Goldman Sachs analysis, the sharp decline in Chinese tech shipments to the US in August directly correlates with the implementation of new tariffs, including a 20% "fentanyl tariff" on all Chinese imports that went into effect in March. This has significantly reshaped supply chains and driven high-tech decoupling between the two economic giants.
Asian Economies Fill the Gap
While China's tech exports to the US have suffered, other Asian economies have stepped in to fill the void. Countries like South Korea, Vietnam, and India have seen an 80% surge in tech exports to the US from the fourth quarter of 2024 through August, according to Goldman Sachs. This highlights a significant shift in the global tech supply chain.
Global Demand Sustains China's Tech Sector
Despite the challenges in the US market, China's tech exports have remained robust due to strong demand from other regions. Demand in Europe, Asia, and emerging markets has shown resilience, keeping China's tech industry active. Goldman's analysts noted that tech exports to non-US destinations performed similarly well for both China and the rest of Asia.
The Rise of Asia's AI-Fueled Export Boom
Despite the pressure on China, the Asia region is experiencing an overall export boom fueled by artificial intelligence (AI). Overall exports from the region rose 7% in dollar terms through August compared to a year earlier. Technology products accounted for over 60% of those gains. Taiwan is emerging as a major player, with over 70% of its exports coming from tech, driven by advanced chips and servers crucial for AI data centers. In August, Taiwan's exports surged 30% from the fourth quarter of 2024.
Shifting Supply Chains and High-Tech Decoupling
The tariffs and the resulting shifts underscore a larger trend: a steady reordering of tech supply chains that accelerated during the pandemic and has been reinforced by Washington's trade policies. Where in 2017, nearly half of the US's critical tech imports came directly from China, by 2025, that figure had fallen below 20%, Goldman estimated. Taiwan, Mexico, Japan, India, and Vietnam have all gained market share in the process.
Future Outlook
Goldman's analysts anticipate that tech supply chains will continue to shift, further driving high-tech decoupling between the US and China and reconfiguring Asia's trade both within the region and to other areas of the world.
