China is integral aspect of many global supply chains that US depends on. When you include all the intermediate inputs it turns out China is the main source of these goods for about 95% of all American industrial sectors https://edconway.substack.com/p/globalisation-is-a-far-far-bigger

This includes critical national security domains as well. For example, 40% of US DoD weapons system and infrastructure supply chains rely on Chinese semiconductors https://cdn.prod.website-files.com/65e61e6392aba0fa1dba723e/66104c1d4e3ae7809bcd8082_Govini_2024_Numbers-Matter.pdf

[–] Pili@hexbear.net 15 points 1 day ago

Good, I hope they'll use that leverage then.

Death to America

[–] bubbalu@hexbear.net 3 points 1 day ago (1 children)

This fact calls into the question the 3% figure. What percentage of China's GDP and exports balance are for components sent to intermediaries for US demand? These are levers available to the US to pull on as well beyond its direct trade relationships.

[–] yogthos@lemmy.ml 5 points 1 day ago (1 children)

The whole thing with intermediaries is that they're very difficult to track. So, real exports from China might indeed be higher, but it's very difficult for the US to root them out. You can just look at the whole farce with sanctions on Russian energy as an example of what happens in practice.

[–] bubbalu@hexbear.net 1 points 23 hours ago (1 children)

IMO the russian sanctions are very easy to follow no? India freely reports a 60% increase in oil imports from Russia and EU imports from India double almost overnight to 40% of India's daily production. Although that is much more macro-scale and easier to track then like the origins of the bolts in an imported car part.

[–] yogthos@lemmy.ml 2 points 22 hours ago

Right, everybody knows it's happening, but there's little interest in actually enforcing these sanctions since Europe needs energy and as long as they can pretend it's coming from India that's good enough politically. I expect the same thing will happen with Chinese tariffs, companies will still want to minimize their costs by sourcing from China, but it'll be done in a way that's politically palatable.

[–] thethirdgracchi@hexbear.net 20 points 1 day ago (1 children)

Significant, considering most parts US manufacturing relies on are made in China. However the US has been "decoupling" from China by buying those parts through middlemen anyway, similar to what Russia does to buy goods from the West now. Per https://www.stlouisfed.org/on-the-economy/2024/jan/decoupling-where-it-matters-us-imports-from-china-in-critical-sectors

While our findings suggest the U.S. is well on its way to reducing its dependence on China, there are important considerations to keep in mind:

First, while reducing trade risks and exposure may be attractive, doing so can also be costly. Industrial policy has a mixed track record at best and is often hard to remove. Similarly, changing suppliers may require paying significantly higher prices. Some of these costs might be passed on to final consumers or affect workers unevenly across sectors. Thus, it is crucial to investigate whether reducing dependence is worth it and when it is a calculated risk to be accepted.

Second, we focus on direct imports from China. However, to the extent that U.S. imports from other countries are produced using inputs from China, the U.S. may nevertheless remain dependent on indirect imports from China, even if direct dependence is reduced.

Finally, import shares may not fully capture the degree of industry exposure to a given country. Some goods may not account for a significant fraction of the total value imported but may be critical for welfare or output. For instance, even though semiconductors are a small fraction of car production costs, shortages of semiconductors had a significant impact in this industry. Thus, the degree of substitutability of the goods under consideration is critical for evaluating the degree of exposure and dependence.

[–] Pili@hexbear.net 19 points 1 day ago

The US sanctioned itself, incredible.