The US Supply Chain Shakeup away from China before and After President Trump's Tariffs, in Five Charts

Very recommendable! Apparently, US companies have already significantly diversified their supply chains away from China before President Trump's second term.

The research study is in so far flawed as it was already published in November of 2025 (revised April 2026), which means it is able to evaluate only a very few months of foreign trade data since President Trump imposed new tariffs on 4/2/2026. Probably, to little data!

"Last year’s US-imposed tariffs sped up significant trade shifts—toward Mexico and away from China—that began years earlier and have diversified American imports among top partners.

While the Trump administration’s major tariff announcement on April 2, 2025, was billed as “Liberation Day,” research by Harvard Business School ... suggests that companies were already positioned to adjust to the levies. The recalibration of supply chains has been so profound that US imports from China have returned to near-2001 levels, when the country entered the World Trade Organization. ..."

From the abstract:

"This paper documents stylized facts about the “Great Reallocation” in US supply chain trade following the 2018–2019 tariff shocks and the April 2025 Liberation Day announcements.

We find that:

(i) The US has decoupled from China but not from the world overall.

(ii) US imports diversified mainly among its top-20 partners, rather than expanding to new source countries.

(iii) Local linear projections confirm ongoing declines in China’s import shares, with compensating increases from Vietnam, Mexico, and Taiwan.

(iv) Most of this shift occurred along the product-level intensive margin, though extensive margin adjustments became more pronounced for Vietnam and India from 2021-2024.

(v) After a period of “wait and see”, the decline in import shares from China spread to contract-intensive and relationship-sticky goods by 2021-2024.

(vi) Trade reallocation has already accelerated after Liberation Day, in favor of trade partners facing lower additional tariffs and with geographically proximate supply networks.

Together, these findings show that the US-China tariff shocks have unwound the US’ sourcing from China back to where it stood at the time of China’s WTO accession."

The US Supply Chain Shakeup After Tariffs, in Five Charts | Working Knowledge "Research ... documents how US imports have shifted away from China and toward Mexico and other top partners."

An Anatomy of the Great Reallocation in US Supply Chain Trade (no public access)

The New Anti-Tariff 'Proof' economic research Paper Isn’t What It Seems

I agree with the Breitbart journalists who wrote the article below. 

There is essentially no historical data available since 1945 to investigate the economic effects of tariffs. Since 1945, the US and many other countries pursued and implemented global free trade through international agreements etc.

The first author of the paper, i.e. Tamar den Besten (Northwestern University), is a novice. Her lifetime citation count is only 23. She has published only two papers including the one below.

The second and last author of this paper, i.e. Diego R. Känzig (Northwestern University), is not much better. His lifetime citation count is only 1955, which is also very little. He published only 17 papers so far.

So far this research paper is only published as a working paper by NBER! It has not been reviewed nor accepted for publication by an economic journal.

Caveat: I did not read the research paper.

From the abstract:

"We study the macroeconomic effects of tariff policy using U.S. historical data from 1840–2024. We construct a narrative series of plausibly exogenous tariff changes – based on major legislative actions, multilateral negotiations, and temporary surcharges – and use it as an instrument to identify a structural tariff shock. 

Tariff increases are contractionary: imports fall sharply, exports decline with a lag, and output and manufacturing activity drop persistently.

The shock transmits through both supply and demand channels. Prices rise in the full sample but fall post-World War II, a pattern consistent with changes in the monetary policy response and with stronger international retaliation and reciprocity in the modern trade regime."

Breitbart Business Digest

The Macroeconomic Effects of Tariffs: Evidence From U.S. Historical Data (partially accessible to public)

China has promised to eliminate tariffs on imports from every African country except Eswatini

Have you ever heard of Eswatini (former official name Swaziland in southern Africa, population about 1.3 million)?

The Scramble for Africa continues!

Will Eswatini cave in to Chinese pressure?

"China already has a zero-tariff policy for imports from 33 African countries, but Beijing said last year it would extend the policy to all 53 of its diplomatic partners on the continent…

From May 1, zero levies will apply to all African countries except Eswatini, which maintains diplomatic relations with Taiwan.” ..."

China to Scrap Tariffs for Most of Africa from May - Human Progress

Flag of Eswatini

How will the roughly $134 billion in tariff revenues, collected by the Trump administration, be refunded?

Now that the US Supreme Court has decided that Trump did not have the authorization for these broad tariffs!

"The ruling leaves open a massive question: refunds. As much as $175 billion has been collected under the struck-down tariffs, and trade attorneys warn the refund process could take months to years. The Court’s opinion was silent on how repayment should work."

"The battle is just starting for the 300,000 businesses that want $134 billion in tariffs refunded. ...

As it turns out, convincing six Supreme Court justices that President Donald Trump overstepped his authority in imposing sweeping tariffs relying on emergency economic powers was the easy part. The hard part: Getting a clear answer on what happens to the tens of billions of dollars that US companies forked over after Trump jacked up tariffs on every global partner last year.

The Trump administration — both formally and informally — has promised to refund duties collected if the Supreme Court issued a ruling against them. But neither the administration nor any of the justices have specified exactly how it would work. ..."

Saturday, February 21, 2026 - Join The Flyover

The $134-billion question: Who will get a tariff refund?

Laura Ingraham discuses the US Supreme Court decision on Trump's tariffs

Recommendable! Laura also discusses the two dissenting opinions, which seem to be a lot more convincing than the decision itself.

(232) Laura: It is LUDICROUS to think this - YouTube

US Supreme Court Strikes Down Tariffs Core to Trump Economic Agenda

What's next? Is there another law possibly giving President Trump the authorization?

From an economic standpoint it would be justified (but not recommended) to respond with tariffs if another country imposes tariffs on US imports. Hower, such countervailing/reciprocal tariffs may violate international trade agreements.

"In a 6-3 decision, the Supreme Court ruled that President Donald Trump’s executive actions on tariffs exceeded his constitutional authority. 

During oral arguments in November, even Trump-appointed justices seemed skeptical of the government’s arguments that the president could impose tariffs without congressional approval. ...

At issue was whether the president exceeded his executive branch authority by imposing tariffs under the 1977 International Emergency Economic Powers Act, a law intended to address emergencies only.

The Trump administration has argued the trade imbalance constitutes a national emergency. Trump has consistently argued the United States has gotten a raw deal on trade with other countries that impose tariffs. ..."

SCOTUS Tariffs Ruling Could Have Big Impact on Trump Economy

EU adds hefty anti-dumping duties to 1,4-butanediol against China, Saudi Arabia, and US

Is the long lasting prosperous era of free trade since 1945 coming to an end? Is a spiral of trade protectionism measures building up?

What will come next? A trade war?

Presented as an "anti dumping" measure.

"The European Commission has introduced massive antidumping duties on imports of 1,4-butadiene (BDO), an important intermediate molecule in chemical manufacturing. The provisional duties are 106–114% on all imports originating in China, 52% for all imports from Saudi Arabia and 136–143% on all imports originating in the US. ..."

EU adds hefty anti-dumping duties to 1,4-butanediol | Business | Chemistry World "Imports from China, US and Saudi Arabia will see tariffs of 52–143%"

COMMISSION IMPLEMENTING REGULATION (EU) 2026/270 of 4 February 2026 "imposing provisional anti-dumping duties on imports of 1,4-Butanediol originating in the People’s Republic of China, the Kingdom of Saudi Arabia and the United States of America"

1,4-butanediol is a key intermediate and component of in various coatings, polymers and solvents

Trump announces 10% tariffs on NATO nations that send military forces to Greenland. Really!

I don't think this is a good or smart idea by President Trump! Generally speaking it is a welcome sign if more NATO member countries send troops to Greenland!

Why does President Trump insist on a "Complete and Total purchase of Greenland"! I don't it makes much sense! Possibly a long term lease of parts of Greenland would probably suffice!

"... In a post on Truth Social, Trump named Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands, and Finland as the targets of the tariffs, which are set to begin on February 1, 2026. He added that the tariff rate would increase to 25% starting June 1 and would remain in place "until such time as a Deal is reached for the Complete and Total purchase of Greenland." ..."

Trump announces 10% tariffs on nations that send military forces to Greenland | Just The News "Trump has argued that the United States must take control of Greenland for national security purposes."

Canada Breaks with US, Cuts Tariffs for China with Palki Sharma

Some very interesting moves by Canada!

EU extends carbon border tax (CBAM) to 180 downstream products and targets ‘loopholes’. Really!

CBAM (Carbon Border Adjustment Mechanism) is an abomination of the socialist central planners of the EU! What fools! What arrogance!

Just reminder: Global warming is a hoax and climate change is a religion or pretense for socialist central planners!

President Trump uses tariffs, the EU uses tariffs too in the name of environmentalism!

"... CBAM definitive regime (from 2026 onwards)

The CBAM definitive period will start on 1 January 2026, therefore please read carefully and follow the instructions in the Authorisation Management Module section as soon as possible to submit your CBAM application. Importers of CBAM goods (or their indirect customs representatives) are urged to apply for the status of authorised CBAM declarants ..."

EU extends carbon border tax to 180 downstream products and targets ‘loopholes’ | Article | Compliance Week "The EU is extending its ground-breaking carbon border adjustment mechanism (CBAM), which imposes carbon pricing on raw materials imported from outside the EU, to 180 downstream products made from those materials. The CBAM is the first attempt worldwide to tax the carbon emissions of imports. It aims to ensure that domestic manufacturers who must pay for their greenhouse gas emissions under the EU Emissions Trading Scheme (ETS) are not at a competitive disadvantage."

Carbon Border Adjustment Mechanism "The EU’s environmental policy tool for fair carbon emissions pricing "

Credits: EU verschärft CO₂-Zoll: Kann CBAM Europas Industrie wirklich schützen?

Are Vietnam and Thailand helping China dodge US tariffs?

Good question! Or how about other countries?

Since the tariffs are not applied uniformly across all countries certainly opportunities for circumvention abound.

"A sharp increase in exports from several Southeast Asian countries to the U.S. this year is stirring the debate over claims that Chinese goods are being rerouted to evade American tariffs. ..."

Are Vietnam and Thailand helping China dodge US tariffs? - Nikkei Asia

Trump announces $1776 warrior dividend checks for 1.45 million military service members, funded by tariff revenue

The Art of the Deal! Marketing a la President Trump! You got to give him some credit when it's due! Clever move!

I blogged here yesterday about the over $200 billion tariff revenues so far for the US Treasury and what to do about it!

"... Additionally, Trump announced $1,776 “warrior dividend” checks for 1.45 million military service members, funded by tariff revenue. ..."

This comes to a total of about $2,7 billion. What will Trump do with rest of the $200 billion tariff revenue?

Thursday, December 18, 2025 - Join The Flyover

US Customs and Border Protection says it has collected over $200 billion in Trump admin tariff revenue so far

Good news! Of course, as a free trader myself, I am not very happy with the situation. However, e.g. the Communist Party of China has craftily undermined and taken advantage of free trade for many years.

Maybe these $200 billion extra government revenue could be used for tax relief of hard working Americans!

CBP says it has collected over $200 billion in Trump admin tariff revenue so far | Just The News "“CBP’s enforcement delivers results,” CBP Commissioner Rodney Scott said. “By combining intelligence-led targeting, rigorous oversight, and swift action, we are safeguarding the U.S. economy, protecting American industries, and holding accountable those who seek to break our trade laws.”"

Mexico to raise tariffs on India and key Asian economies from 2026

President Sheinbaum is learning fast from President Trump! 😊 President Trump responds she is just my kind of lady! Caution: satire!

Trump’s Tariffs Backfire: Americans Are Paying the Price with Palki Sharma

And US passports are less desirable anymore! They rank now 12th in the world tied with Malaysia!

The Free Traders Have It Backwards: The US is the largest free trade zone in the world

Recommendable! Food for thought!

"... The U.S. economy produces about $28 to $29 trillion a year—roughly the same size as all the world's exports combined. Our GDP is one quarter of all the world's output. Imports might add variety at the margins or bring in goods that foreign producers are especially good at producing, but they aren't crucial to bringing quality products to American consumers.

Free-trade theory says countries should stick to what they have a "comparative advantage" in—coffee for Colombia, wine for France, cars for Germany. That tidy model might work for small, specialized economies. It doesn't fit America.

The U.S. is a continental economy with every climate, resource, and skill base. We grow olives and cranberries—crops that never overlap anywhere else on earth. We make semiconductors and soybeans, airplanes and avocados. That's not comparative advantage. It's comprehensive advantage. Our economy is so large and diverse that the neat Ricardian trade story collapses. We have the domestic capital and labor to make quality products at a scale and variety unknown to history or the rest of the world. We don't need to specialize in one niche to be efficient. ..."

Breitbart Business Digest

Mexico to raise tariffs on cars from China to 50%

President Sheinbaum is learning fast from President Trump! Is this a political flirt between these two presidents? 😊

Canada Drops U.S. Tariffs | Mark Carney Trade Shift Ahead of 2026 USMCA Review

Good news!

US imports of Brazilian coffee face 50% tariff

What President Trump forgot to exempt Brazilian coffee from his tariff hikes? What a blunder! This omission can cost him dearly!

New US tariffs push Ghanaian businesses to find fresh markets and adapt their trade strategies.

Recommendable! Thanks to Trump, the African market is becoming more important for intra African trade!