Effects Of Export Diversification Under US Tariffs – Analysis

By Zhou Chao

The year 2025 marks a significant turning point in the structure of U.S. foreign trade, with one of the main driving forces being a new round of export policies centered on tariff adjustments and trade agreements. These include the implementation of a unified 10% baseline tariff and "reciprocal tariffs" applied to specific countries, signaling a shift in U.S. trade policy from a long-standing framework favoring liberalization to a strategic combination that uses institutionalized tariff tools as levers for trade competition and negotiation.

This policy change is driven by the combined impact of the U.S.'s persistent trade deficit, the global restructuring of supply chains, and domestic pressures to protect industries. Since the introduction of new tariff policies under the Trump administration, U.S. imports from China have declined significantly. However, in-depth analysis, particularly of trade shifts in some Southeast Asian countries such as Vietnam and Thailand, shows that the U.S. still has a long way to go before it can fully disentangle itself from Chinese industrial and supply chains. After decades of efforts since the country’s reform and opening-up and accession to the WTO, the vast scale of China's industrial and supply chains, as well as its technological advantages in certain industries, make decoupling from China a complex and turbulent process. However, the U.S. export landscape, a relatively under-discussed area, is also undergoing profound changes.

Under the new policy framework, the U.S. is simultaneously imposing higher tariffs on trade partners while securing market access and procurement commitments through targeted trade agreements and institutional preferences, thereby reshaping its export market strategy. The initial impact of this strategy is reflected in the 2025 export statistics. The U.S. ocean freight exports to emerging economies, excluding China, increased from approximately 190 million tons in 2024 to 223 million tons in 2025, marking a year-on-year growth of around 17%. This indicates a clear shift in exports toward emerging markets.

At the same time, the share of U.S. exports to traditional developed markets such as the European Union and Japan has declined, reflecting a shift in its export focus. Data shows that in 2025, the proportion of U.S. exports to emerging markets rose to 49.1%, while the share of exports to traditional markets outside the U.S. domestic manufacturing supply chain decreased. These changes not only indicate growth in U.S. export volumes but also reflect a deeper transformation in the U.S.'s approach to strengthening its position in the global trade system through institutional design and market restructuring.

First, the redistribution of export structure is shifting towards "non-China emerging markets + bulk commodities with competitive advantages". The most notable aspect of U.S. export trends in 2025 is not merely the fluctuations in export scale but the accelerating reintegration of export structure. According to Nikkei Asia, in the context of the rapid reshaping of global supply chains due to the U.S.'s trade relations with emerging markets, the U.S. ocean freight exports to 20 major emerging economies, excluding China, increased from 190 million tons in 2024 to 223 million tons in 2025, a 17% year-on-year growth, showing a clear shift in U.S. export focus towards "non-China emerging markets". From a structural perspective, energy and agricultural products are the main drivers. Crude oil exports reached 36 million tons, a significant increase of 58%, while wheat exports grew by 16% to 21.57 million tons, reflecting the further amplification of the U.S.'s comparative advantage in certain bulk commodity sectors.

Compared to the traditional export targeting a few developed economies with a focus on manufactured goods and capital goods, this new wave emphasizes a broader focus on emerging markets, with hard demand constraints in basic categories like energy and food. At the same time, related studies point out that the share of U.S. exports to emerging markets has risen to approximately 49.1%, indicating that this structural change is not a localized phenomenon but the result of a combined adjustment of export geography and product categories. The significance of this shift is that the U.S. is anchoring its export growth in emerging markets that offer greater population and demand elasticity, while leveraging categories like energy and food, which are in reality products with "low substitutability and strong rigidity", as key drivers, thus forming a more expansive export portfolio.

Secondly, there is the key mechanism for reinforcing effects, i.e., institutionalized export growth through trade agreements. The reason why the structural changes mentioned above can be transformed into a strengthening factor for the U.S.'s global trade position is not primarily due to short-term price fluctuations, but rather because the U.S. has embedded export growth within a stronger institutional framework. The core approach is to secure expanded procurement commitments from certain emerging economies in exchange for trade agreements and institutional preferences, for instance, lowering tariffs, easing market access, and providing regulatory conveniences. This strengthens bilateral ties in key areas such as energy security and food supply, forming a policy-driven model of "market access—procurement commitments".

Unlike relying entirely on spontaneous market demand, this model provides U.S. exports with greater predictability and policy rigidity. On one hand, it enables the U.S. to more quickly establish a stable demand pool during the global supply chain reshaping period, reducing dependence on single markets and mitigating vulnerability to external frictions. On the other hand, by ensuring the continuous supply of bulk commodities, it ties trade relations to energy and food security issues, enhancing the U.S.'s bargaining power and institutional influence over partner countries, thus upgrading the goal of "selling more" to "being more difficult to be replaced in key sectors". More importantly, the combination of export market diversification and institutional binding means that the U.S. is no longer simply participating in competition within the old order of globalization. Instead, it is reshaping new trade network nodes through a combination of rules, tariffs, and agreements. By pursuing a path of "expanding markets, solidifying rules, and deepening ties", the U.S. is reinforcing its centrality and stability in the global trade system.

Thirdly, export diversification may be reshaping the U.S.'s trade flexibility and spillover impact. When changes in export structure converge with institutional mechanisms, their reinforcing effects ultimately manifest in the enhancement of the U.S.'s flexibility within the global trade landscape. The U.S. gains stronger maneuvering room across different markets and product categories, enabling it to use trade tools more effectively for geopolitical and economic objectives.

Externally, the U.S. expansion of energy and agricultural exports serves as the core strategy, establishing a denser network of demand and supply chain dependencies in emerging markets. This makes it more difficult for these economies to pursue "decoupling substitutes" for key import categories. As a result, during the process of reshaping the global trade agenda and rules, U.S. influence more easily extends to broader areas such as standards, logistics channels, financial settlements, and industrial cooperation. Internally, the institutionalization of export growth makes the U.S. less susceptible to being dragged down by shocks from a single market in the face of global economic fluctuations. This enhances trade resilience, which in turn supports the U.S. in adopting a more proactive stance in advancing tariff policies and agreement negotiations, creating a self-reinforcing cycle of "export diversification—institutional binding—status strengthening". In other words, the key point in 2025 is not whether U.S. exports are absolutely leading, but that the adjustment in its export structure is elevating trade capacity from a "market behavior" to a "strategic capability". In the deepening trend of supply chain regionalization and bloc formation, the U.S. is continuously raising its relative position as a key global supplier and rule-maker.

Although the U.S.'s institutional adjustments in exports can drive market diversification and enhance trade status, in the long term, it still faces certain structural barriers, particularly the issue of price disadvantages in some agricultural exports. For example, when comparing the U.S. West’s agricultural production system to competitors like Brazil's soybean industry, the U.S. faces a cost structure and scale disadvantage, making it increasingly difficult to gain a price competitive edge in the global soybean market. Brazilian soybeans, benefiting from lower production costs and a more flexible South-South market network, have gained significant market share in several emerging economies, which creates structural pressure on U.S. soybean exports.

This disadvantage in agricultural export competition not only impacts the export performance of individual commodities but could also affect the U.S.'s overall trade bargaining power and institutional advantages within the global agricultural trade system. If the U.S. cannot effectively address these structural issues through policy adjustments, cost optimization, or supply chain upgrades, its export advantages in certain sectors may be weakened, thereby constraining the ongoing strengthening of its global trade position.

However, from an overall structural perspective, the relative disadvantage in the agricultural sector should be viewed as a localized weakness within the U.S. export system, rather than a fundamental constraint on its overall trade position. On one hand, the cost competition pressure in specific commodities like soybeans will indeed compress the price space in certain emerging markets, weaken the U.S.'s bargaining power on agricultural issues, and to some extent impact the marginal efficiency of export expansion. On the other hand, the core of the U.S. export strategy has gradually shifted towards a combination path that advances energy, basic food commodities, and institutional bindings in parallel. In this context, the role of energy and high-value-added industrial goods is more critical, and the dependence on individual agricultural products is relatively limited. With the added advantages of trade agreements locking in demand, a robust financial and logistics infrastructure, and the institutional spillover effects of the U.S. dollar settlement network, the U.S. still retains strong capabilities for structural adjustment and market maneuverability. Therefore, the disadvantages in agricultural products are more of a pressure for structural optimization, rather than a trend-setting constraint. While these issues do impose some constraints on the overall strengthening of the U.S. trade position, their impact is limiting rather than potentially disruptive.

Final analysis conclusion:

Overall, through institutional adjustments to tariffs and export policies in 2025, the U.S. has achieved strategic diversification of its export markets, thereby strengthening its position in the global trade system. As things stand, the U.S. has significantly expanded its export focus to emerging economies and, in conjunction with institutional trade measures, has initially enhanced the institutional stickiness and market coverage of its exports. In terms of rule influence, the country has strengthened its institutional ties with export partners through policy arrangements. In global trade competition, the growth of U.S. exports, particularly in key sectors like energy and agricultural products, has further solidified its core position within global supply chains. However, challenges such as structural agricultural competition pressures remind us that the U.S.'s enhanced trade position will not be a linear process. Continuous optimization of both policy and industrial strategies will be necessary to solidify its strategic advantages within the complex global trade landscape.

• Zhou Chao is a Research Fellow for Geopolitical Strategy programme at ANBOUND, an independent think tank.