Did you know that US-China trade is record breaking?
In 2022, US-China trade surpassed $690 billion, breaking all records. Despite the political rivalry, trade between the two superpowers continues to grow. But for how much longer? All the details
Despite strong political tensions, further exacerbated by the case of the alleged Chinese spy balloon , which caused the postponement of US Secretary of State Anthony Blinken's visit to Beijing, trade between the United States and China reached record values in 2022.
UNITED STATES-CHINA TRADE (RECORD) DATA IN 2022
Trade in goods between the two countries reached $690.6 billion last year, according to official data from the US Bureau of Economic Analysis. The previous record was reached in 2018, for 659 billion.
In particular, the US bought more consumer products from China (toys, for example), while China increased imports of US food items (such as soybeans).
THERE IS NO DECOUPLING
Despite the heated political rivalry and industrial competition, and despite the restrictions on the trade of some critical technologies such as advanced semiconductors , the overall trade numbers do not allow us to speak of an economic decoupling between the two superpowers. The United States and China are also, respectively, the two countries with the largest GDP in the world.
Wendy Cutler, vice president of the Asia Society Policy Institute and former US deputy trade representative, told Nikkei Asia that "although there may be decoupling" between the US and China "in some strategic product areas," such as microchips and critical metals, "other sectors remain unaffected, including a wide variety of manufacturing and agricultural products."
DUTIES ON CHINESE PRODUCTS
US exports to China grew by $2.4 billion in 2022 to $153.8 billion overall. While imports increased by $31.8 billion to a total of $536.8 billion, spurred by robust consumer spending in the first half of the year.
Despite the tariffs, Chinese products have not lost their price competitiveness. As Nikkei Asia points out, most of the US tariffs on Chinese consumer goods, such as toys and plastic products, imposed in the Donald Trump years are still in place.
The current administration of Joe Biden had thought of eliminating some of them to favor the lowering of the national rate of inflation, but the political tensions with Beijing – in particular after the visit to Taiwan by the then speaker of the House Nancy Pelosi, last summer, which had raised fears of the outbreak of a vast international crisis – have pushed the question into the background.
HOW THE ECONOMIES OF THE UNITED STATES AND CHINA ARE DOING
In 2022, China's total international trade reached a record value: $6.2 trillion, up 7.7 percent year-on-year. Exports rose 10.5 percent to 23.9 trillion yuan, while imports rose 4.3 percent to 18.1 trillion yuan. However, gross domestic product grew by just 3 percent , the lowest rate in almost forty years, mainly due to the strict zero-COVID policy, which was only recently abandoned.
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US economic growth also slowed in 2022: the increase was 2.1 percent, compared to 5.9 percent a year before. But the sentiment is generally positive, as the unemployment rate is at record lows and inflation is easing.
FUTURE TRADE FORECASTS
However, it is difficult to predict whether trade between the United States and China will continue to grow, given the political differences. A report by the Boston Consulting Group estimates that bilateral trade will decline by about 10 percent by 2031.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/stati-uniti-cina-commercio-record-2022/ on Wed, 08 Feb 2023 08:55:47 +0000.