Which products are concentrated, and which countries have market power

When a single country or a small set of countries produces most of the world’s supply of a particular good, a tariff, sanction, or natural disaster there becomes everyone’s shock. This page measures supply-side concentration across the full HS6 catalog in 2024, identifies the products where one country commands a majority share, and tracks whether global trade is becoming more concentrated over thirty years.

The 20 most supply-concentrated products

For each HS6 line, we compute the Herfindahl-Hirschman index over exporter shares of world exports, on the 0–10,000 scale. HHI = 10,000 means a single country supplies everything; HHI near 0 means the product is produced everywhere. The US DOJ/FTC (2023) Horizontal Merger Guidelines flag HHI > 2,500 as “highly concentrated” and HHI > 1,500 as “moderately concentrated”. Beck, Georgiadis & Gräb (2021), in their IMF Working Paper on critical inputs, argue that concentrated supply combined with low substitutability is the right operational definition of “critical dependence”. The list below is restricted to products with more than US$500M of world trade in 2024 to suppress artefacts from ultra-thin markets.

Products where one country is the market

Chowdhry & Felbermayr (2023) define strategic dependence as a product-country pair where the importer sources a dominant share from a single supplier and no easy substitute exists. The supply-side counterpart is simpler: HS6 lines where one country controls more than half of world exports. We restrict to products with non-trivial world value (> US$500M) and rank by total trade value to emphasise where the stake is largest.

On the import side: which countries are most single-source dependent

Goldberg & Pavcnik (2007), surveying the effects of trade liberalisation in developing countries, emphasise that import-side concentration reshapes domestic labour markets and prices through the intensity of foreign competition. The geodep database of Arjona, Connell & Pisu at the OECD (2023, ECO/WKP 1775 “An analysis of trade interdependencies”) computes, for every importer × HS6 × year, the share of imports coming from the dominant supplier. The figure below reports the share of each country’s HS6 import basket that is sourced from a single foreign supplier as defined by the OECD methodology (a high-C1 threshold, not a literal 100%), restricted to economies importing at least 4,000 distinct HS6 lines.

Critical minerals: export-market concentration of rare earths, lithium, and cobalt

The IEA (2022) Critical Minerals Review and the USGS Mineral Commodity Summariesconsistently flag rare earths, lithium, and cobalt as the choke points of the energy transition. The BACI HS6 lines below map onto those products, but with an important distinction: these are export-market shares, not mining- or processing-production shares. For mined cobalt the USGS reports DRC at ~74% in 2023; for mined lithium (spodumene), Australia at roughly 46%. Those production shares will not equal the BACI shares below because producers may refine or consume domestically, ore may cross borders en route to refiners (e.g. DRC → China for cobalt), and spodumene, carbonate and hydroxide sit under different HS codes. Read this chart as “where world buyers source from”, not “where this mineral is produced”.

Is world trade becoming more concentrated?

Gaulier & Steingress (2020), tracking global value-chain unbundling through BACI, document that the median product became more, not less, concentrated after 2001 as China took over entire HS6 categories. Below, the world-average top-1 exporter share across every HS6 line traces that arc: a slow rise from 29% in 1995 to 34% in 2024. The drop in 2020 reflects a Covid-year reshuffling rather than a trend break — by 2024 the series has resumed its upward path.

Where in the chain is the concentration? Upstreamness by BEC stage

Antràs & Chor (2013, Econometrica 81:6) formalised upstreamness as the weighted mean steps-to-final-demand implied by the Leontief inverse; Antràs, Chor, Fally & Hillberry (2012, AER P&P) built the cross-country series. A coarser but globally comparable cut is the UN BEC classification (primary, semi-finished, parts, capital, consumption). We plot world trade composition by stage, 2000-2024. The intermediate stages (primary + semi-finished + parts) correspond to Antràs-Chor U_i > 2 and are the layers where concentration propagates most (Baqaee & Farhi 2019, Econometrica 87:4). Baldwin (2013, WTO/Fung) coined this the “second unbundling”: tasks, not goods, are what crosses borders.

CR4 and CR8 on the 20 most-concentrated HS6 lines

HHI captures second-moment concentration; concentration ratios CR_N are the top-N exporter cumulative share (Bain 1951, QJE; Saving 1970, IER; Miller-Pauly-Sobel 2000, International Economic Review 41:3). For supply-chain risk, CR₄ is the share that a four-country blockade would take out and CR₈ the share a G7+friends-only exclusion would still leave exposed. The DOJ/FTC (2023) Horizontal Merger Guidelines use HHI; Miller-Pauly-Sobel (2000) argue CR_Ntracks disruption pass-through more linearly because concentration ratio is invariant to small-tail reshuffling.

The Baldwin unbundling index: trade-in-intermediates share, 1995-2023

The Herfindahl, CR_N, and single-source measures above are all snapshots. Baldwin’s (2013, in Elms & Low eds., Global Value Chains in a Changing World, WTO/FGI) “second unbundling” thesis is the time-series backbone behind why those snapshots look the way they do: once ICT and air cargo made it cheap to coordinate multi-country production, the share of world trade that is intermediate (primary + semi-finished + parts & components) rose relative to the share that is final (capital + consumption goods). We operationalise the Baldwin index as the UN-BEC intermediate-stage trade divided by total world trade, annually from 2000 to 2023. A rise means the world produces more jointly; a fall means re-shoring or regionalisation is winning. Pair this with the CR₄/HHI data above: if the unbundling index is rising but CR₄ on intermediate HS6 lines is also rising, the world is simultaneously more interconnected and more concentrated, which is the specific fragility pattern Baqaee & Farhi (2019, Econometrica 87:4) show propagates shocks super-linearly.

Reshoring-to-USA proxy: Mexico FDI inflows, 2015-2024

The cleanest descriptive proxy for the post-2018 “Great Reallocation” (Alfaro & Chor 2023, NBER 31560) is foreign direct investment into Mexico, the closest low-cost production base to the US market and the only USMCA partner with meaningful industrial capacity. US Census FT-900 reports that Mexico overtook China as the largest source of US goods imports in 2023 for the first time since 2003. The World Bank WDI series BX.KLT.DINV.CD.WD tracks net FDI inflows in current USD; we plot Mexico 2015-2024 below and compare the 2024 reading against the 2015-2021 pre-USMCA-renegotiation average. Freund, Mulabdic & Ruta (2022, World Bank Economic Policy) document that nearshoring reallocations follow FDI before they show up in customs data, so this chart leads Figures 1-8 by roughly two years.

Bown’s semiconductor tracker: world trade in the HS6 lines CHIPS + IRA target

Bown (2023, PIIE Working Paper 23-1) and Bown & Clausing (2023) argue that the semiconductor incentives in the CHIPS and Science Act ($52.7B, P.L. 117-167, enacted 9 Aug 2022) and the battery/clean-energy rules in the Inflation Reduction Act ($369B CBO score, P.L. 117-169, enacted 16 Aug 2022) are most precisely read off six HS6 lines: integrated circuit processors and controllers (HS 854231), memory ICs (854232), amplifier ICs (854233), other ICs (854239), doped semiconductor wafers (HS 381800), and semiconductor fabrication machinery (HS 848620). The last line — ASML / Applied Materials / Tokyo Electron / Lam Research lithography and deposition tools — is the canonical leading indicator of fab capacity build-out, because the tools ship 6 to 18 months before the wafers they produce appear in customs data. Total world trade in these six lines at 2024 stands at $970.4B, a -13% move from the 2022 enactment baseline of $1.12T.

Where the critical-input exposure sits: sectoral cut by importer

Figure 3 measured single-source dependence as a count over the entire HS6 import basket. The OECD geodep panel (Arjona, Connell & Pisu 2023, ECO/WKP 1775) goes further: each critically-dependent HS6 line is tagged to one of seven WTO-style strategic sectors (agri-food, chemicals, pharmaceuticals, steel, defence, transport, electronics) plus an “other” bucket. This decomposition is what the European Commission’s 2023 Economic Security Strategy (JOIN(2023) 20 final, 20 June 2023) and the US Department of Commerce’s 100-day supply-chain review (E.O. 14017, 24 February 2021) both use to score “strategic dependence”: not the raw count of dependencies but the count weighted by how strategic the underlying sector is. The bars below report, for the 15 importers with the highest total critical-product count in 2022, how that count splits across the seven strategic sectors.

Policy read: IRA, CHIPS, CRMA, dual circulation

The four panels of Figures 2, 4, 6 and 7 together describe the fragility pattern that the post-2022 industrial-policy wave is pushing against. The US Inflation Reduction Act(H.R. 5376, 16 Aug 2022) and CHIPS Act (P.L. 117-167) use local-content rules and foreign-entity-of-concern exclusions to pull battery, semiconductor and clean-energy supply chains away from the concentrated-and-distant corner of Figure 7. The EU Critical Raw Materials Act (Regulation (EU) 2024/1252, 11 April 2024) sets a 65% ceiling per third-country origin per strategic raw material, which is a direct response to Figure 4’s single-country export shares. China’s dual-circulation strategy (14th Five-Year Plan, 2021) plus the 2023 MOFCOM export controls on gallium, germanium and graphite run in the opposite direction: convert Figure 4’s concentration into leverage. The lesson is symmetric: the same HS6 lines are strategic from both ends.

References

• Antràs, P., & Chor, D. (2013). “Organizing the Global Value Chain.” Econometrica 81(6): 2127–2204.
• Antràs, P., Chor, D., Fally, T., & Hillberry, R. (2012). “Measuring the Upstreamness of Production and Trade Flows.” American Economic Review Papers & Proceedings 102(3): 412–416.
• Arjona, R., Connell, W., & Pisu, M. (2023). “An analysis of international trade interdependencies.” OECD ECO/WKP 1775.
• Baldwin, R. (2013). “Global Supply Chains: Why They Emerged, Why They Matter, and Where They Are Going.” In Elms & Low (eds.), Global Value Chains in a Changing World. WTO / Fung Global Institute.
• Baqaee, D., & Farhi, E. (2019). “The Macroeconomic Impact of Microeconomic Shocks: Beyond Hulten’s Theorem.” Econometrica 87(4): 1155–1203.
• Beck, R., Georgiadis, G., & Gräb, J. (2021). “Rising Geoeconomic Fragmentation and Critical Inputs.” IMF Working Paper.
• Chowdhry, S., & Felbermayr, G. (2023). “Trade in Times of Uncertainty.” Kiel Working Paper.
• Gaulier, G., & Steingress, W. (2020). “Trade in Value Added and the Decoupling Narrative.” CEPII Working Paper.
• Goldberg, P. K., & Pavcnik, N. (2007). “Distributional Effects of Globalization in Developing Countries.” Journal of Economic Literature 45(1): 39–82.
• Johnson, R. C., & Noguera, G. (2012). “Accounting for Intermediates: Production Sharing and Trade in Value Added.” Journal of International Economics 86(2): 224–236.
• Miller, M. H., Pauly, M. V., & Sobel, J. (2000). “Disruption of Supply Networks.” International Economic Review 41(3).