$427 billion! China has fallen to the third largest importer of the United States, who are the top two?

With a drop of 20%, China is no longer the number one importer, and the United States jubilantly announced the decoupling report card.

According to data released by the U.S. Department of Commerce, the value of U.S. imports from China in 2023 will be $427 billion, down 20%. However, according to data released by the General Administration of Customs of the mainland, exports to the United States in 2023 will be $500.3 billion, down 13.1%. Although there are statistical discrepancies, it is true that exports to the United States have declined.

As the world's two largest economies, China and the United States have strong complementarities in trade. The United States is the world's leading technology power, and we need a lot of American technology and high-end products, such as chips. The mainland is the world's largest producer of goods, and the United States needs our high-quality and inexpensive goods.

You have what I need, I have what you lack, it was originally a good thing for mutual benefit and win-win, but I didn't expect Lao Mei to feel at a loss, because the trade deficit is getting bigger and bigger, exceeding 300 billion US dollars. We work overtime, day and night, but we can only earn a very low profit, while Lao Mei drinks afternoon tea and works for so many hours every day, and easily earns money. Lao Mei uses the lowest price to buy a large number of our high-quality products, who suffers, isn't it clear at a glance?

In fact, suffering losses is just an excuse. The real reason is that our economy is growing too fast, and the GDP has reached more than 70% of the United States, which makes them feel the pressure.

Therefore, since 2018, the United States has launched a trade war, and the bilateral trade volume has declined in those two years. When the epidemic hit in 2020, China took the lead in controlling the epidemic, production was restored, and the United States increased imports from China. However, after the United States eased up in 2022, it began to take the initiative to reduce imports, which will continue until 2023.

The 20% drop in U.S. imports from China seems to be a good decoupling result, but it is actually "ineffective decoupling". Why?

Judging from the published data, Mexico has become the biggest beneficiary of the so-called decoupling of the United States, with the United States importing $475 billion from Mexico in 2023, which makes Mexico overtake China and become the largest importer of goods in the United States, while the second largest importer of the United States is Canada.

Mexico has a population of 128 million, an abundant labor force with low wages, and is very close to the United States. Therefore, Mexico has become a "friendly shore outsourcing" country supported by the United States.

The most critical thing is that the United States, Canada, and Mexico have signed free trade agreements, and the tariffs are very low, or even zero. This has attracted a large number of American companies to invest in Mexico, including Tesla.

But it is not so easy to develop into a manufacturing power, and it has taken 40 years of hard work for the mainland to become the country with the most complete industrial categories in the world. In a country like Mexico, the manufacturing industry is still in the early stage of development, and it is weak in all aspects, and it needs to be imported to complete the industrial chain.

The United States imports a large number of goods from Mexico, but Mexico imports a large number of upstream products such as raw materials, accessories, and equipment from China. In 2023, the trade volume between China and Mexico will reach US$100.2 billion, a year-on-year increase of 6%. Among them, exports to Mexico were 81.5 billion US dollars, imports from Mexico were 18.7 billion US dollars, and the trade surplus with Mexico was 62.8 billion US dollars.

The United States looks like it is decoupling on the surface, but when Americans open the goods, the parts inside are Made in China. Therefore, the United States has not reduced its dependence on China, and decoupling is naturally ineffective.

Recently, the U.S. manufacturing industry has been in a hurry, demanding that the Biden administration take steps to block the import of Chinese-made cars and parts from Mexico, claiming that otherwise "the viability of U.S. auto companies may be threatened."

In recent years, China's electric vehicles have developed rapidly, but the United States has restricted imports. As a result, many Chinese new energy vehicle companies have entered the Mexican market, and Mexico has also imported a large number of electric vehicles from China, and Mexico will become the second largest exporter of Chinese cars in 2023, which may be the reason why the US manufacturing industry is anxious.

China's manufacturing industry has a complete range of industries, a complete industrial chain, and high production efficiency, which are not comparable to countries such as Mexico, Vietnam, and India. All of these countries supported by the United States have become "transit points" for Chinese goods, which eventually flow into the American market.