Sourcing shifts — India rises, tariffs bite

India now supplies about 40% of the smartphones the U.S. used to buy from China, as companies redraw electronics supply chains around tariff risk. (cnbctv18.com) McKinsey said the U.S. replaced nearly two-thirds of the goods it had sourced from China, with India taking a large share in smartphones and Southeast Asian countries taking a larger role in laptops. The report described global trade in 2025 as resilient even as sourcing routes shifted. (cnbctv18.com) U.S. goods imports from China totaled $308.4 billion in 2025, down $130.4 billion from 2024, according to the Office of the U.S. Trade Representative. Census Bureau trade tables show the same annual drop in goods imports from China. (ustr.gov, census.gov) The tariff picture is shifting again. On March 12, 2026, the U.S. Trade Representative opened Section 301 investigations into 60 trading partners over forced-labor import bans, with hearings scheduled for April 28 through May 1. (federalregister.gov, ustr.gov) Section 301 is the law Washington uses to investigate foreign trade practices and, in some cases, add import duties. U.S. companies told the Times of India they fear any new Section 301 action could stack on top of existing tariffs rather than replace them. (ustr.gov, timesofindia.indiatimes.com) North American sourcing faces its own deadline. The first six-year joint review of the United States-Mexico-Canada Agreement is set for July 1, 2026, and U.S. officials have already opened consultations and hearings ahead of that date. (ustr.gov, ustr.gov) On March 5, 2026, U.S. Trade Representative Jamieson Greer and Mexico’s Marcelo Ebrard said negotiators would discuss reducing dependence on imports from outside North America, tightening rules of origin, and securing regional supply chains. That puts phones, parts, autos, and industrial inputs in the same policy frame: buy less from China, but also prove more content comes from the region. (ustr.gov) Commerce Secretary Howard Lutnick has also said President Donald Trump will renegotiate the trade pact in 2026, tying the formal review to a broader political push for tougher regional terms. Canada and Mexico have pushed back against U.S. tariff moves as inconsistent with the agreement. (foxbusiness.com, commonslibrary.parliament.uk) The result is a supply chain map with two pressures at once: factories are moving out of China, and the rules governing where goods can move next are getting harder to predict. For importers, the cost question is no longer only where to make a device, but which tariff regime it may face when it arrives. (cnbctv18.com, federalregister.gov, ustr.gov)