If you’ve seen fewer “made in China” labels on the products you buy, it’s no accident: trade between the U.S. and its biggest Asian trading partner has diminished as manufacturers have left China for friendlier shores.

U.S. trade in goods with China totaled $44.6 billion in June, down from $46.6 billion in May, and far short of the $60 billion the same month in 2022 according to non-seasonally adjusted data released Tuesday by the Bureau of Economic Analysis. China was often the number one U.S. trading partner throughout the 2010s, but Canada and Mexico have traded the top spot since February 2022. 

The slumping U.S.-China trade in goods highlights how a number of trends have eroded China’s status as the “workshop of the world” and especially the source of products for U.S. consumers. The tr𒀰ade war started by former president Donald Trump in 2018 has taken its toll, as both sides have raised tariffs on one another’s goods. More recently, U.S. policy has encouraged businesses to move away from China, its political rival on the world stage, and towards countries that have closer ties to the U.S., 澳洲幸运5官方开奖结果体彩网:a strategy called “friendshoring.” 

For example, the 澳洲幸运5官方开奖结果体彩网:CHIPS Act, signed in 2022, subsidized domestic production of computer chips while restricting exports to China.

Meanwhile, some manufacturers have moved production away from China and to other Southeast Asian countries. Among them: electronics 澳洲幸运5官方开奖结果体彩网:giants Apple (AAPL) and Samsung, which both moved some production to Vietnam in 2022, and toymaker Hasbro (HAS), which shifted to Mexico, the U.S., India, and Vietnam in 2019, according to press reports.

Companies have left China in an effort to “de-risk” their operations, according to Mark Hopkins, an economist at Moody’s Analytics who studies trade.

“There are opportunities to essentially diversify the portfolio, so not everything is going to be produced in one country,” Hopkins said. “There's a combination of better comparative cost favoring some of these other countries than maybe five or 10 years ago, together with this notion that even if it's not a lower cost center, there may be fewer risks associated with sourcing all of your imports from plants in Vietnam than in China.”

Business leaders may also view China’s government as more heavy-handed than other nations competing for factory sites.

“There are always going to be risks associated with doing business in a country that is not 100% democratic and open,” Hopkins said. “They’re essentially🌊 just an autocratic government that can shift policies on a whim.”

Vietnam, South Korea, Taiwan, and Malaysia have all benefited from the downturn in U.S.-China trade. American imports from those four countrꦦies combined, once overshadowed by China, have nearly caught up according to Tuesday’s trade data. 

To be sure, some of the slump in China trade may be a hangover from the pandemic—trade surged in 2021 and 2022 as 澳洲幸运5官方开奖结果体彩网:global supply chains recovered from their pandemic disruptions, and some of the decline of imports is probably just a reversion to normal patterns, Hopkins said.

U.S.-China trade is likely to stabilize and sl🥃ow down gradually but not plunge, Hopkins predicted.

“Ultimately, I have a positive outlook overall for U.S.-China trade because as the two largest economic superpowers, I think there's going to be a shared need to manage the global economy, and have the view that trade is a positive sum game, not zero-sum … but that’s more of a long-term outlook. In the short term, it’s still very much clouded by geopolitical uncertainty.”