China's tech exports to US plunge amid tariffs, but global demand keeps Asia's AI supply chain booming

China's tech exports to the United States have sharply declined due to new tariffs imposed by the Trump administration, including a 20% "fentanyl tariff" on all Chinese imports that took effect in March. According to a Goldman Sachs analysis, Chinese tech shipments to the U.S. fell by 70% in August compared to the fourth quarter of 2024. However, strong demand from the rest of the world has helped sustain China’s overall tech export performance. While the U.S. market has seen a dramatic drop, other regions have stepped in. From the fourth quarter of 2024 through August, tech exports from countries like South Korea, Vietnam, and India to the U.S. rose by 80%, filling the gap left by China. Meanwhile, Chinese tech exports to non-U.S. markets—particularly in Europe, Asia, and emerging economies—continued to grow, increasing by about 20% compared to the same period the previous year. Goldman Sachs analysts noted that tech exports to non-U.S. destinations showed little difference between China and other Asian economies, with both performing strongly relative to other sectors. This indicates that global demand for technology remains robust, even as geopolitical tensions reshape trade flows. The shift reflects a broader trend of supply chain reconfiguration driven by U.S.-China trade tensions. In 2017, nearly half of the U.S.'s critical tech imports came directly from China. By 2025, that share has dropped below 20%, according to Goldman’s estimates. Countries such as Taiwan, Mexico, Japan, India, and Vietnam have gained significant market share in the process. Asia as a whole is experiencing a surge in tech exports, with regional exports rising 7% in dollar terms through August compared to the prior year. Technology products accounted for more than 60% of that growth. Taiwan has emerged as a standout, with over 70% of its exports now coming from the tech sector—the highest share in Asia. In August, Taiwan’s exports jumped 30% from the previous quarter, fueled by demand for advanced semiconductors and servers essential for AI data centers. Goldman’s analysts expect this realignment to continue, with tech supply chains further diverging between the U.S. and China. They anticipate ongoing high-tech decoupling and a reconfiguration of trade within Asia and beyond, as companies seek to reduce reliance on any single country amid growing geopolitical risks.