China’s smartphone exports to the United States fell by 72% in April, totaling just under US$700 million, according to customs data released on May 20, 2025.

This figure represents the lowest export level since 2011 and reflects the effects of US tariffs on Chinese goods.

The decline in smartphone exports is significantly greater than the overall 21% decrease in China’s shipments to the US last month.

Tariff measures from the Trump administration, which included levies as high as 145% on certain Chinese products, have influenced technology supply chains and prompted production shifts to other regions.

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🔗 Source: South China Morning Post

🧠 Food for thought

1️⃣ Supply chain diversification accelerates amid tariff uncertainty

The dramatic 72% drop in smartphone exports from China to the US represents the culmination of a years-long trend toward supply chain diversification that began during the initial Trump-era tariffs.

This pattern was already visible in 2019 when China’s share of US mobile phone imports fell from 75-80% to below 60% as manufacturers began shifting production to alternative locations1.

Vietnam emerged as the primary beneficiary of this shift, significantly increasing its mobile phone exports to the US as companies sought to mitigate tariff risks1.

Apple, which relies heavily on Chinese manufacturing through partners like Foxconn, exemplifies the vulnerability that has driven tech companies to pursue multi-country production strategies despite the significant costs and complexities involved1.

The restructuring of these supply chains represents a shift in global manufacturing patterns, as companies prioritize resilience over the efficiency that concentrated Chinese production once offered.

2️⃣ Tariffs create cascading economic effects beyond direct trade figures

The smartphone export collapse highlights how tariffs impact economies far beyond their immediate targets, with projected household costs of $800-1,190 annually due to price increases across technology products2.

These tariffs are expected to reduce long-run US GDP by 0.9%, while decreasing after-tax incomes by 1.2% on average, with lower-income households bearing a disproportionate burden3.

The effective tariff rate is projected to rise to 12.1%, the highest since 1941, creating economic friction that ripples through both economies3.

Despite the recent temporary agreement to reduce US tariffs from 145% to 30% and Chinese tariffs from 125% to 10% for a 90-day period, the long-term damage to supply chains and investment confidence persists4.

Companies throughout the electronics industry are now maintaining higher inventory levels, adjusting pricing strategies, and delaying investments due to the continued uncertainty around trade policy2.

3️⃣ Reshoring creates new competitive dynamics in electronics manufacturing

The tariff situation is creating opportunities for domestic electronics manufacturing, with companies increasingly viewing reshoring as a competitive advantage that reduces tariff exposure while improving quality control5.

Original Equipment Manufacturers (OEMs) face strategic challenges with premium products better positioned to absorb increased costs than budget items, forcing difficult decisions about pricing and market positioning6.

Electronic Manufacturing Services (EMS) providers are investing in production shifts to countries like Vietnam and Malaysia, though these transitions require significant time and capital investment6.

European electronics manufacturers are also experiencing the ripple effects of US tariffs, leading to increased global competition for non-Chinese suppliers as companies worldwide work to diversify their sourcing6.

The long-term consequences include increased automation investment as manufacturers seek to reduce dependency on low-cost labor and build more resilient, geographically diversified production networks6.

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