9 February 2022

2 minute read

Asia

US goods exports to China fell in December, cementing a $45 billion increase in the 2021 US-China trade deficit and a major two-year shortfall in Beijing's purchase commitments under the "Phase 1" trade deal negotiated by former President Donald Trump, reported Reuters. 

The US Census Bureau said on Tuesday that the United States' goods trade deficit with China rose 14.5% to $355.3 billion, the biggest since the 2018 record of $418.2 billion. The 2020 gap was $310.3 billion, a 10-year low.

US imports from China in 2021 jumped by $71.6 billion over 2020, or 16.4%, to $506.4 billion, their highest since 2018. Exports to China increased by $26.6 billion, or 21.3%, to a record $151.1 billion.

The global US trade deficit in 2021 surged 27% to a record $859.1 billion.

But the increase in 2021 US exports to China was not enough to meet China's targets for increased goods purchases under the "Phase 1" trade deal signed in January 2020 to halt escalation of a tariff war on Chinese goods launched by Trump in 2018.

In the deal, Beijing agreed to increase purchases of US farm and manufactured goods, energy and services by $200 billion above 2017 levels over two years, among other market access commitments. The purchases commitments expired at the end of 2021.

Deputy US Trade Representative Sarah Bianchi said last week that it was "really clear that the Chinese haven't met their commitment in Phase 1" and the Biden administration was working with Chinese officials to address the matter.

US officials also told Reuters early on Monday that they were losing patience over China's failure to close the shortfall in its purchase commitments.

Through November, China had met only about 60% of its goods purchases goal, according to trade data compiled by Peterson Institute for International Economics senior fellow Chad Bown. The decline in US exports to China in December shows that China did not make up any ground in the final month of 2021.

Source: Reuters