The value of United States trade in goods for both exports and imports with China has dropped by almost half in just seven months, a change largely attributed to the tariff wars between the two countries. Data gathered by Learnbonds.com indicates that between August 2019 and March 2020, the total trade value declined by 45.12%.
In March 2020, the value of U.S. trade in goods with China amounted to around $27.78 billion which composed of imports totaling to $19.81 billion and exports at $7.97 billion. In August last year, the total trade value stood at $50.62 billion with imports at $41.19 billion while exports were $9.43 billion. Notably, this was the highest figure in trade value between March 2019 and March 2020. From August last year, the value declined and slightly rose in October to $49.04 billion. Between January and March this year, the total trade value in goods has dropped by about 32.09%. Between March last year ($41.6 billion) and March this year ($27.78 billion), the total trade value has slumped by 33.2%.
An overview of the trade value shows that imports are the most impacted compared to exports. Imports have significantly slumped while exports have remained largely consistent. For example, between August last year and March 2020, imports dropped by a staggering 51.9% while exports slightly plunged by 15.48%. At the start of the year, the value of imports stood at $7.22 billion and later increased to $7.97 billion in March. On the other, hand during a similar period export slumped by 40.47%. In general, trade value is mainly swayed by imports which are dropping while exports are rising but gradually.
China’s export goods value remains high
The Learnbonds.com research also compared the monthly value of export for both the United States and China from April 2017 to March 2020. During the period under review, China’s total export value stood at $7.27 trillion while the United States value was $7.18 trillion, a percentage difference of 1.2%. The US export value has remained largely consistent and the lowest figure was $187.7 billion during the period under review. The highest value for the export was recorded in April 2018 at $213.3 billion.
The United States export pattern is in contrast to China. The exports were valued highest in January and February at $292.45 billion. The value for January and February is combined due to China’s lunar year that is different from the rest of the world. Elsewhere, the lowest value was registered in February last year at $135.24 billion. Apart from the recent 2020 high, China’s export value was high in December 2017 at $231.8 billion. From May 2019, China’s export value has remained dominantly high when compared to the United States.
The decline in trade value with China can be tied to the ongoing trade war. Both countries have put in place stiff tariffs on hundreds of billions of dollars worth of one another’s goods. The trade war emerged after US President Donald Trump laid blame on China for engaging in unfair trading practices and intellectual property theft. Additionally, Washington has accused China of forcefully acquiring American technology to China. On the other hand, China accuses the US of attempting to sabotage its rise as a global economic powerhouse.
Washington’s tariffs are meant to encourage Americans to consume locally produced goods by making imported goods more expensive. This explains why the value of American imports has been declining over the last year. Leading economists have faulted the United States tariff as derailing, while others advocate for more tariffs to settle the trade imbalance between the two countries.
The impact of Coronavirus pandemic on US-China trade
However, the impact is being felt in the US with farmers and manufacturers struggling with high consumer prices. The trade war is also being felt in other countries causing economic damage. However, some countries have gained from increased manufacturing to fill the gaps alongside stock market instability.
From the start of the year, trade between China and the US was already declining before the Coronavirus pandemic set in. With the crisis, supply chain disruptions, unemployment, and a drop off in demand might further plunge the trade.
The Coronavirus pandemic is set to impact imports and exports for both countries. In containing the virus spread, the countries imposed a locked-down of cities, and shutting businesses. These measures have led to a plunge in demand for goods from both countries. The service industry has also been impacted by tourism being grounded. Air travel was shut closed leading to a decline in revenue for exports from the two countries.