The US gets nearly all of its soccer balls from China. But the goal posts are moving

Soccer balls more expensive in the US.
Soccer balls more expensive in the US.
Image: AP/Ron Schwane
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The US-China trade war and the 2019 Women’s World Cup each have the world captivated at the moment. And they are surprisingly related.

The US is the greatest force in women’s soccer. The American team, reigning World Cup champion, ranks number one in the world. When women in the US play soccer, they are typically using a soccer ball from China. Of the 18.2 million soccer balls imported to the US in 2018, more than 11 million (61%) were made in China.

In May 2019, in the latest act of the trade war, the US proposed 25% tariffs on an additional $300 billion in Chinese imports. Soccer balls were among the many products on the list. If these tariffs go into effect, as Donald Trump has said they will unless Xi Jinping meets with him at the upcoming G20 summit, soccer balls in the US may get significantly more expensive.

The current generation US Women’s World Cup stars grew up playing with Chinese balls. It’s likely the next generation won’t.

How China took a lead on soccer

Currently, the US charges no tariff on soccer balls imported from China or any other trading partner. In this competitive market, Chinese manufacturing has thrived. China overtook Pakistan—the main US source for soccer balls in the early 1990s—in the 2000s. Today, China has a huge number of soccer-ball plants. (The 2018 Men’s World Cup Adidas ball was manufactured in China and Pakistan.)

The rise of Chinese soccer balls paralleled China’s rising share of the overall US import market, particularly in products that involve low-skill manufacturing labor. China went from the US’s fourth-biggest import partner in 2001 to by far its most important one today.

The effect of US tariffs

The estimated value of the average soccer ball imported from China when it arrived in US in 2018 was about $2.70 (the actual cost to US consumers is much higher because of sales costs and markups by retailers). If the tariffs go into effect and Chinese suppliers do not change prices, the average price would rise by almost 70 cents.

Yet when a tariff goes into effect, it almost never means that wholesale prices go up by the tariff amount. Rather, manufacturers may lower their prices to keep their product competitive or move factories to a country where production is cheaper. Importers may also look to get the product from another country where tariffs have not been imposed.

Vietnam wins on penalties

No country appears to be benefitting from the US-China trade war more than Vietnam. A burgeoning export power, Vietnam’s share of exports to the US have increased from 1.9% in the first four months of 2018 to 2.6% in 2019, according to the US Department of Commerce. Researchers correctly predicted that Vietnam would gain from the trade war because it now makes many of the same goods the US now gets from China.

Vietnam, the world’s third leading exporter of all inflatable balls, virtually tied with Pakistan for second in soccer balls exported to the US. Vietnam’s share of the US soccer market rose sharply from 2011 to 2018, while Pakistan’s has plateaued and China’s has declined. The trade war is likely to accelerate that trend.

Vietnam’s rise is due to its cheap labor and an export-focused economy. By trade as a share of GDP, Vietnam is the most globalized country in the world. Many of its factories are actually run by Chinese companies looking to lower costs and, perhaps, sidestep US-China disputes.