Global trade redirection: tracking the role of trade diversion from US tariffs in Chinese export developments

Julien Le Roux and Tajda Spital

Economic Bulletin Boxes, 2026, vol. 1

Abstract: Global trade flows experienced significant shifts in 2025 following new US tariffs. After an initial frontloading surge, US imports from China declined sharply, while Chinese exports demonstrated resilience overall, with broad-based growth across destinations outside the United States. Preliminary empirical analysis shows that US tariffs had a strong negative effect on China’s exports to the United States but have resulted in limited trade diversion to other markets so far. Trade diversion effects are found to be concentrated in a narrow set of products and destinations, notably countries in the Association of Southeast Asian Nations (ASEAN) and Africa. Overall, China’s export growth appears to be driven by structural factors, such as rising competitiveness, weak domestic demand and deeper regional supply chain integration, rather than large-scale tariff-induced trade diversion. JEL Classification: F13, F14, O53

Keywords: China trade; tariffs; trade diversion; trade policy (search for similar items in EconPapers)
Date: 2026-02
Note: 3182505
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