Description
Shortages and rising geopolitical tensions have spurred calls for the United States and the European Union to decouple—or reduce their dependence on imports—from China. All three economies are pursuing policies to diversify their import sources, with varying degrees of success: The United States has made some progress on this front, but the European Union and China have become more reliant on each other for imports since 2018.
China’s import sourcing is the most diverse of the three big regions; its concentration index, which is based on the Herfindahl-Hirschman index, is substantially lower than those of the other two. Only the European Union provides more than 10 percent of the total value of China’s imports. The European Union also relies on a diverse set of suppliers; just two sources—the United States and China—provided 10 percent or more each of the European Union’s import value in 2023. Since 2013, the European Union, however, has boosted its dependence on China for all imports.
In comparison, four trading partners each supply the United States with more than 10 percent of its total imports—the European Union, Canada, Mexico, and China—but US sourcing has grown more diverse since 2018, reversing the trend between 2013 and 2018.
Although the Biden administration continues to try to convince the European Union to move away from Chinese imports, the opposite is happening. The increasing divergence in US and European economic interests may make it harder for them to agree in the future on national security and technology policies involving Chinese imports.
This PIIE Chart is adapted from Mary E. Lovely and Jing Yan’s blog, “While the US and China decouple, the EU and China deepen trade dependencies.”
