How US-based companies are moving manufacturing out of mainland China while their Chinese counterparts are “de-Americanizing” their supply chains
- Electronics makers shift from China to side-step Trump tariffs — Tech giants like Huawei are ‘de-Americanizing’ supply chains Tweets: @noahpinion Tweets: Noah Smith / @noahpinion : 17/Over the past 30 years, we've seen global supply chains coalesce around a U.S.-China axis (with Germany and Japan/Korea/Taiwan also playing important roles). Those supply chains may now bifurcate. One inside of China. And one outside of China. https://www.bloomberg.com/...
Context & Ripple Effects
In August 2019, Bloomberg documents a two-way split forming along the US-China axis Noah Smith describes: American electronics makers relocate assembly out of mainland China to sidestep Trump tariffs, while Huawei and other Chinese firms strip US suppliers out of their chains in response. What reads then as tariff-driven hedging hardens into policy over the following years.
The arc since confirms it was structural, not cyclical: the US campaign to cut China out of supply chains pushed Apple toward moving 15-30% of output abroad, Apple, Google, Microsoft and Amazon shifted device production to India and Vietnam by 2022 (per Nikkei-reported coverage), and Beijing answered with billions in state and investor cash to de-Americanize its domestic chip industry.
First-order effects
- US electronics makers face immediate tariff exposure on China-built goods, forcing them to qualify new assembly sites outside the mainland, while Huawei accelerates replacing American component suppliers to keep shipping product.
Second-order effects
- Contract manufacturers and component suppliers must build duplicate capacity across both blocs, raising costs for everyone, and South Korean and Taiwanese firms that built China's hardware sector become the swing suppliers both sides court.
Third-order effects
- If the bifurcation holds, the single globalized electronics supply chain splits into a China-centered chain and an ex-China chain, with export controls and state subsidies — not cost curves — deciding where capacity lands; the later payoff to Korean and Taiwanese AI hardware makers shows how the ex-China side compounds once curbs sideline Chinese rivals.
The trend: The US-China technology supply chain is bifurcating into two parallel ecosystems, each racing to remove dependence on the other through relocation, export controls, and subsidized domestic substitution.