U.S. Trade With China Now More Balanced Than With Ireland, Austria

Thirty-two percent of trade with China was a U.S. export in March, according to the latest U.S. Census Bureau data.

While that remains below the 40% U.S. average with the world, it is lightyears away from the 16% total in 2015 and almost certainly the greatest percentage in decades.

For the quarter, the figure is 28%, a 33% jump from just one year ago, when the total was a mere 21%.

Why?

Imports have tumbled this year, falling below $100 billion in the first quarter for only the second time in a decade. The only other year was during the Covid-19 pandemic in 2020.

• Plasma, vaccines and other blood fractions, a category that ranked No. 16 in the first quarter of 2022, fell 94.05% this year, off $1.42 billion, to rank No. 176.
• Miscellaneous medical chemical re-agents, a category that ranked No. 7 in the first quarter of 2022, fell 93.03% this year, off $2.43 billion, to rank No. 94.
• The category that includes TVs and computer monitors, which ranked No. 6 last year, fell 49.65%, a $1.35 billion decline, to fall just outside the top 10 at No. 11.
• The top-ranked category of cell phones and related equipment is down 20.34%.
• The No. 2-ranked import category of computers is off 34.62% from a year ago.
• The fifth-ranked import this year, the category of toys, children’s bicycles and games, is off 40.77%. That was a decline of $1.55 billion.

Overall China-U.S. trade — exports and imports — plummeted 20.34% at a time U.S. trade with the world was essentially flat, down 0.01%. Exports actually increased, up 6.72% while imports fell 27.51%.

That has another effect. The U.S. trade deficit with China — exports minus imports — was the lowest in a decade, the only exception the Covid-19 pandemic year of 2020.

With 28% of trade with China now a U.S. export, that is a balance greater than with a bevy of Asian countries, to be sure, but also Ireland, at 20% and Austria at 26%.

It’s safe to say the broad-based and high tariffs put in place by former President Donald Trump and maintained by President Biden in an effort to bring China and its trade policies to heel are having an effect.

It’s a little less clear what that effect actually is.

Chinese multinationals that shift final or full production to Vietnam, Mexico or other countries to avoid U.S. tariffs certainly employ fewer Chinese workers than they would have. But the Chinese companies still benefit, of course, in much the same way that U.S. multinationals benefit from manufacturing offshore.