China and America are not leaving each other

China is still well-entrenched in US supply chains, despite US companies doing their best to drastically reduce direct imports from the country. Bloomberg reports this based on documents presented by the US Federal Reserve at the annual Federal Reserve Symposium in Jackson Hole, USA.

The paper’s authors, Harvard Business School’s Laura Alfaro and Dartmouth School of Business’s Daven Sour, see the U.S. importing fewer goods directly from China between 2017 and 2022 and focusing more on Vietnam and Mexico. market, but also note that China exports more to both Vietnam and Mexico. In addition, China is investing heavily in countries.

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With that, China seems to have found a way to stay afloat in the US economy. “The indirect supply chain between the U.S. and China will remain the same,” Alfaro and Chor said. “Thanks to China’s economic ties with Vietnam and Mexico. Although the United States has shifted its gaze sharply toward Vietnam and Mexico, it remains de facto connected to and dependent on China through third parties.

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New York stock markets closed higher yesterday. Investors reacted with relief to Fed Chairman Jerome Powell’s long-awaited speech. In that speech, he insisted that inflation remains high and that the Federal Reserve will raise interest rates if necessary.