USTR Tai Talks About China, A Once-Dominant China That Now Ranks 3rd
A year and a half into President Biden’s first term, his Administration is starting to talk about China in a meaningful way.
But yesterday, when Katherine Tai, the U.S. Trade Representative, spoke in Washington, she was talking about a China that was less important as a trade partner than it has been in years and certainly since former President Donald Trump launched the still-ongoing trade war in early 2018.
Sure, the United States still gets more of its imports from China than any other nation, though that percentage has dropped this year to 17% from 19%. In 2017, that percentage was 21.58%.
And sure, China still ranks third among all U.S. trade partners, through August, according to my analysis of the most recent U.S. Census Bureau data. But it ranked first in 2015, 2016, 2017, 2018 and 2020.
And yes, along with Mexico and Canada, it still accounts for more that 40% of all U.S. trade, but it’s down to 14% from 16.35% in 2020.
But, in a year when the United States will break records for total trade, total exports, total imports and the size of its trade deficit, it has less to do with China that you might expect. China isn’t nearly an outsized player it had become since being granted admission into the World Trade Organization in 2001.
- Six of the seven biggest months for trade in U.S. history have occurred in the six-month period between March and August.
- Mexico, currently ranked as the No. 1 U.S. trade partner year-to-date, has had six of its top 10 months ever since March.
- It’s a similar story for a host of other top 20 U.S. trade partners: Germany, South Korea, Vietnam, India, Taiwan, the Netherlands, Malaysia and Thailand.
- Not so for China. None of China’s top 10 months have occurred this year.
- In fact, eight of China’s top 10 months for U.S. trade are prior to September of 2018, by which time the trade war had escalated from the spring.
The story line is much the same for imports:
- Six of the United States’ top seven months in history for imports have occurred since March – in the last six months.
- For Mexico, South Korea, Vietnam, India, Taiwan, Malaysia and Thailand, six of their top 10 months ever have occurred in the last six months.
- For China, once again it is zero. Only two of its top 10 months ever for U.S. imports have occurred since October of 2018 – October and November of 2020.
Even in the world of trade deficits, China’s impact is less overwrought:
- The U.S. deficit with China, once five times greater than that with any other nation, is now “only” three times greater.
- Six of its top 10 U.S. deficits with China occurred in 2018 but none since.
- For the United States as a whole, the three largest in U.S. history have occurred in the last three months, with August – the latest month available – the largest of all.
- Just looking at the last three months, the United States has recorded three of its top 10 deficits with Vietnam, India, Taiwan, Italy, Malaysia and Thailand, with Ireland and South Korea in two of those months.
So, yes, that armada of ships marooned off the coast of Los Angeles in recent weeks has carried goods from China – but increasingly those goods are marked “Made in Somewhere Other Than China.”