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Report Shows 4.3% YoY Decline in US Exports to China in 2023 Amid Trade Turmoil

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Report Shows 4.3% YoY Decline in US Exports to China in 2023 Amid Trade Turmoil

Led by a decline in agricultural goods and semiconductor shipments, the volume of American goods exported to China fell in 2023 amid continuing tensions between the world’s two largest economies, according to a report released on Tuesday.

The United States exported a total of US$144.9 billion in goods to China last year, marking a 4.3 per cent decline from a year earlier when the figure reached a record-high US$151.4 billion, said the report by the US-China Business Council.

While US exports to most other foreign economies dipped in 2023 owing to geopolitical tensions like the war in Ukraine, stunted economic growth in China and Sino-American government-level challenges also weighed on the bilateral trade relationship, the USCBC said, separate from long-standing barriers such as tariffs.

“It is important for us to remind US lawmakers and those in influential positions that every state and congressional district in the US maintains its own economic and trade relationship with China,” said Craig Allen, president of the non-profit group representing more than 270 American companies.

“Changes in US-China trade policy should be considered very carefully.”

“Trade between the US and China also contributes to geopolitical stability and must be factored into policy decisions related to the future of the bilateral relationship,” he added.

In 2023, China was the third-largest goods export market for the US, trailing only Canada and Mexico. Also last year, the Asian country was dethroned by Mexico as the top source of US imports after 17 years.

Oilseeds and grains remained America’s top export to China last year, despite plunging US$7 billion from 2022, according to the report.

Challenges in the agricultural trade could worsen if producers in other countries like Brazil continued becoming more competitive or if American exports were targeted in a future US-China tariff spat, it said.

“Any new US tariff increases on imports from China, which many lawmakers and political leaders are actively proposing, could adversely impact the American agriculture sector if they trigger retaliatory actions,” the report added.

US President Joe Biden last week called for tripling the existing tariff rate on Chinese steel and aluminium, just as the US Trade Representative’s office announced the launch of yet another Section 301 investigation into China’s maritime, logistics and shipbuilding sectors.

Section 301 investigations aim to determine whether a foreign government’s policies or acts are discriminatory and whether they burden or restrict US commerce.

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Last year US exports of semiconductors and their components to China fell to their lowest level since 2016 to US$6.8 billion, dropping 52 per cent compared with the peak level in 2021.

China’s weak economic recovery as well as expanding US export controls on advanced semiconductors and chip manufacturing equipment both curtailed demand and inhibited exports, the report said.

On services trade, US exports to China rose in 2022 but had not yet recovered from the impact of the coronavirus pandemic.

Travel services have traditionally been among the largest American services exported to China, with their 2022 level reaching just 10 per cent of their pre-pandemic value, it added.

Education exports, which include money that Chinese students studying in the US pay for tuition, housing and books, were among the largest categories of American services exported to China in 2022. They held their standing as important contributors to local American economies, according to the report.

While Chinese students comprise the largest contingent of international students at US universities, their share is losing ground among other foreign nationals, it said.

In 2022, the number of students from China rose by just 1 per cent, compared with growth rates of 8 per cent for India, 22 per cent for South Korea and 36 per cent for Brazil.
Source: Scmp.com
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