The Core

https://www.cnbc.com/2022/12/04/manufacturing-orders-from-china-down-40percent-in-demand-collapse.html

"The global trading map is being rapidly redrawn, with EU-U.S. trade and investment in U.S. rising sharply as economic ties between the West and China are subjected to critical scrutiny. This year, the U.S. has imported more goods from Europe than China – a big shift from the 2010s, according to Project 44."

emphasis mine.

Wow!

Still, China appears to be at 2019 levels, Europe slightly above.

Do you think this is this a long-term trend or a regression to the mean?

Now that most Chinese factory workers make more than the US minimum wage, the wage gap between China and the EU is dropping.

Tariffs and anti-Chinese sentiment can't help. I increasingly see the phrase The Second Cold War.

Zero-Covid has not messed with the Chinese supply chain as has drought requiring closing some factories that depend on hydropower.

Plus lots of inventories are super high in the US and consumers are cagey, but that would not explain why Europe is exporting so much to the US.

Some of these seem short-term transient and some do not.

Thoughts?

>trend

IMHO we have a convergence of politics and economics when it comes to China.  Politics: The warm fuzzy image China projected to sucker US companies to switch all their manufacturing to China has worn through and we've seen the iron fist underneath. Economics: Covid lockdowns, supply chain vulnerabilities made painfully obvious, Chinese wage increases have all hit at that same time like a bucket of cold water.

You have other trends: Big Box stores slowly dying lowers outlets for impulse buying of whatever cheap Chinese goods flood the market this season.  You could always tell:  suddenly every retailer had DVD racks or CD racks or leather coats, etc.

Where to go?

Mexico is looking like a good deal along the border.  Workers are still being paid peanuts.

Vietnam, India.

And certain critical parts like micro chips make sense to produce domestically despite the cost.

>Europe

Some European armaments manufacturing is going to boom (sorry pun).  Whole Soviet era munitions factories are being brought out of mothballs in Czech Repubilc, Slovakia, Poland, Romainia etc to start making Russian caliber artillery shells.

But even outside military Europe manages to manufacture consumer goods, pay a decent wage, provide healthcare where others like the US have given up.

PS:  One key to getting the US economy back in order it to fix health care for workers.  That uncontrolled cost is holding us back.