Quantifying US-China Trade Exposures

New US-China tariffs are either threatened or implemented on a nearly monthly basis and run the risk of severely disrupting both the complex global supply chains and the economic welfare of both countries. Most multinationals operating in China—American firms and others—are highly exposed to these tensions, directly and indirectly, and face numerous risks (production disruptions, cost increases, demand swings, etc.).

Understanding the true nature of US-China trade connectedness is difficult because most analysis is based on antiquated trade statistics. Illuminating where value is created and where it is ultimately consumed in trade is critical to accurately mapping out trade exposures.

In our latest research brief, we evaluate the real trade dependencies between the US and China on an industry-by-industry basis using new metrics called value-added exports and value-added imports.