We’ve been saying for a while that we don’t buy into the story that the sourcing of U.S. containerized imports will be greatly diversified away from China.
While some nations such as Vietnam enjoy certain cost advantages and are experiencing growth in container exports to the U.S. that exceeds that of other source countries, China’s competitive position remains impregnable. No country has shown a similar capacity to bring to bear the phalanx of factors necessary to produce and deliver goods on the scale, quality and cost as China.
This report from the Economic Policy Institute confirms the continuing validity of this thesis. Despite the shrinking of the trade deficit that has accompanied the recession, China share of the non-oil goods U.S. trade deficit continues to grow, the Washington-based group said.
Year to date 2009 it stood at a record 83%. “In short, aside from oil imports, the U.S. trade deficit is dominated by our import of Chinese manufactured goods,” wrote Senior International Economist Robert E. Scott in a note posted on July 23rd.