More Than Half of U.S. Spending on Chinese Imports Remains in the U.S.

New data reveals that only 44% of payments for Chinese goods go to China, while 56% stay within the U.S. economy. Who really profits from this trade?

A recent report by Apollo Research, led by economist Apollo Sløk, highlights a striking insight into the true distribution of value along global supply chains. According to the findings, when American consumers purchase goods labeled as “Made in China,” only 44 cents of every dollar spent ends up in the hands of Chinese suppliers. The remaining 56 cents are absorbed by players within the U.S. economy. In contrast, when imports come from Europe, 82% of the total expenditure flows overseas, and just 18% stays in the United States.

Breaking Down the 56% That Stays Local: Who Gets What?

A substantial share—around 25%—is attributed to logistics, warehousing, and transportation services provided domestically by firms such as UPS, FedEx, and regional distribution hubs. Approximately 15% of the spending flows to U.S.-based entities that handle design, branding, marketing, and sales functions. These services often represent the core value creation behind a product, particularly in sectors like electronics and consumer tech. An additional 8% goes to retail operations, customer service, insurance, and platform commissions—whether through physical stores or e-commerce giants like Amazon. The remaining 8% covers regulatory compliance, port and customs fees, and domestic taxes paid to federal and local authorities.

Why “Made in China” Doesn’t Mean All the Value Goes to China

Many of the goods produced in China are commissioned by American companies. For example, while Apple assembles its iPhones in China, less than 6% of the final retail price goes to Foxconn or similar Chinese manufacturers. The lion’s share of the value flows back to Apple in the form of intellectual property revenue, design, software, financial services, and marketing—almost all of which are anchored in the U.S.

Furthermore, Chinese exports often comprise components sourced globally. Raw materials may come from Latin America or Africa, semiconductors from Taiwan, and design from Silicon Valley. The final assembly is often the least value-adding phase of production.

Europe is Different: Why 82% of Import Spending Goes Overseas

The contrast with Europe is stark. Imports from European countries typically arrive in their finished form, already branded, packaged, and ready for distribution. Whether it’s pharmaceuticals, automobiles, or machinery, these products undergo little additional transformation in the U.S. Consequently, 82 cents on the dollar ends up in the hands of European manufacturers and suppliers, leaving just 18 cents for local logistics and sales functions.

Smart Trade Policy Must Differentiate Between “Import Leakage” and “Value Integration”

This data challenges the simplistic view that all imports are inherently detrimental to the domestic economy. A significant portion of the so-called “Chinese import” ecosystem is deeply integrated with U.S. businesses, workers, and service providers. In some cases, the local economic benefit from importing from China may even exceed that of trade with traditional Western allies.

The policy implication is clear: trade measures such as tariffs or bans should not be based solely on the origin of goods. Instead, they must consider where the economic value is created and who ultimately benefits. Blanket restrictions on Chinese imports risk harming American firms that are integral parts of the global production and distribution network.