A data-driven analysis of how the US–China tariff war, and escalating US–India trade tensions, have reshaped global supply chains — and whether India has capitalised or ceded ground to Vietnam, Bangladesh and Mexico.
From the first Section 301 tariffs in 2018 through the 2025 Liberation Day shock and the subsequent de-escalation, this section maps every major tariff event affecting US–China and US–India trade flows.
Key insight: China's trade-weighted tariff rose from ~3% (2017) to a peak of ~41% in 2025 before the truce. India's peak was ~50% in Aug 2025 before the Feb 2026 bilateral deal reduced it to 18%.
The "Great Reallocation" — how China's dominant share of US imports has been redistributed across emerging manufacturing nations, with Vietnam and Mexico as the primary beneficiaries.
Two-speed shift: Labour-intensive goods (furniture, apparel) moved first (2018–2020). Contract-intensive products only shifted post-2021, once firms accepted tariffs were permanent — incurring the sunk costs of supply chain reorganisation.
AETR = Total Duties Paid / Total Import Value
Major shipping corridors between manufacturing hubs and the US, showing how route intensity has shifted. Thicker lines represent higher trade volume. Emerging corridors to India and Southeast Asia are gaining share from China–US Pacific routes.
Research suggests 70–80% of Vietnam/Mexico's US import gains represent genuine production shifts, not transshipment. However:
India's Suez route is competitive for East Coast but adds 5–8 days vs. Vietnam for West Coast arrivals, disadvantaging time-sensitive electronics and fashion goods.
How manufacturing clusters have expanded or contracted in response to tariff incentives. Metrics combine FDI inflows, employment growth, and export value to estimate cluster activity index.
Cluster Activity Index (CAI) = 0.4×(FDI Growth) + 0.35×(Export Value Growth) + 0.25×(Employment Growth)
Electronics PLI success: Production surged 146% in 4 years. India is now the world's 2nd largest mobile phone manufacturer, with Apple, Samsung, Foxconn, Google all expanding Indian facilities.
A deep dive into India's complex position in the tariff war — where it has genuinely gained manufacturing momentum, where it has lost to Vietnam and Bangladesh, and what the Feb 2026 bilateral deal means for its trajectory.
India's relative tariff advantage post-Feb 2026: At 18% vs Vietnam's 46% and Bangladesh's 37%, India now has the strongest tariff position of any major Asian exporter — but must act quickly as these rates are subject to negotiation.
Comprehensive scorecard of how different nations have fared in capturing supply chain relocation from China.
| Country | US Import Share Gain (pp) | US Tariff Rate (Mar 2026) | Key Sectors | FDI Growth (2023-25) | Verdict |
|---|---|---|---|---|---|
| 🇻🇳 Vietnam | +2.0pp | 46% (truce)* | Electronics, Apparel, Furniture | +45% (2020-2024) | Top Winner |
| 🇲🇽 Mexico | +2.0pp | 0-25% (USMCA) | Autos, Electronics, Machinery | +55% (2020-2024) | Top Winner |
| 🇹🇼 Taiwan | +2.0pp | ~32% | Semiconductors, ICT | +38% (2020-2024) | Strong Winner |
| 🇮🇳 India | +0.5pp | 18% (deal)* | Pharma, Electronics, Gems | +18% (FY2024-25) | Moderate + Improving |
| 🇧🇩 Bangladesh | +0.3pp | 37% (truce*) | Garments (84% of exports) | Moderate | At Risk |
| 🇨🇳 China | −8.6pp | 30% (truce) | All categories declining | Negative (to US-bound) | Major Loser (to US) |
How the tariff war has impacted different product categories — and what the new supply chain geography looks like for each.
The tariff gap is widest for strategic/tech goods where Biden-era Section 301 escalations added the most (EVs, batteries, solar). Narrower gaps (~10pp) for products not subject to Section 301 (e.g. video game consoles) mean supply chains are stickier.
A Jan 2024 IMF paper found reversing 2018–19 tariffs would boost US GDP by 4% over 3 years. The Tax Foundation estimates the 2026 tariff regime costs the average US household $1,500/year.