The percentage of US imports from China has fallen to levels not seen since 2008.
President Biden should declare victory and enlist China on bigger, tougher issues – but don’t expect him to ask the man who started the trade war he has been chasing, the former president Donald Trump, at the White House for a joint ceremony.
- Russia. Create as much space as possible between Russia and China, even if it is very thin. On the slowdown in its energy purchases. By condemning, even slightly, the invasion of Ukraine. With a much less “warm and fuzzy” commentary on China’s relations with Russia. Both President Vladimir Putin and President Xi Jinping are autocrats with non-Western, non-democratic values. But the former, it is clear, poses the far greater threat. Whether we like it or not, the American and Chinese economies are intimately linked. (You should like it.) We don’t have anything close to that kind of economic relationship with Russia, and we won’t either.
- Taiwan. Would the United States defend Taiwan from a Chinese attack like we defend Ukraine? Would our European partners on Ukraine join us? Would China really take the risk? The people who might actually speculate on that are several pay levels above me. But anything that improves relations between the United States and China also improves the situation between the United States, China and Taiwan. For a small island, Taiwan plays an outsized role in the global economy, especially in semiconductor manufacturing and other high-tech areas. For reference, the United States does five times more trade with Taiwan than with Russia this year.
- International Waters Disputes. It’s one of three areas mentioned by Biden during a November 2021 virtual call with Xi. China has become more aggressive in recent years in Pacific waters.
- Climate change. Biden also mentioned the importance of collaboration here, as did Xi.
- Human rights. Finally, Biden also mentioned this area, without naming the specific areas involved, which would include Tibet, the Uyghurs and could include Hong Kong.
- covid. Xi mentioned Covid, but Biden didn’t. Many in the international community remain upset and disappointed that China has not been more open and transparent about the origins of the pandemic.
There are more, of course, and each of these as well as the above has its levels of complexity. But let’s look at the data.
First, a little background. China has been the United States’ largest trading partner for five of the past seven years, largely thanks to its imports into the United States. It wasn’t No. 1 in 2020, when Mexico was a first for our southern neighbor, or in 2022, when Canada returned to the top spot it once held for decades.
So far this year, China ranks third, behind Canada and Mexico, respectively. It was in that order that the three nations, which account for more than 40% of U.S. trade, finished in 2021. It was the first time China hadn’t finished first or second since 2005.
Today, China accounts for 15% of all US imports. That’s for May, according to US Census Bureau data released last week, and definitely a narrow window. Since the beginning of the year, this percentage is 17%. Last year it was 18%.
But, as recently as 2017, China accounted for 21.58% of all US imports from the world.
For these reasons, Biden can declare victory and eliminate most if not all of the tariffs in place, which cover, to varying degrees, some $350 billion worth of goods.
It can be said that they had little or no impact. That the inflation we see today did not come quickly. That it was the result of a massive injection of public funds into the US economy for businesses and individuals that came later, in response to the pandemic, at a time when they were unable to spend for services. This created a huge demand for manufactured goods, followed by the Russian invasion of Ukraine.
That doesn’t mean that US imports from China aren’t increasing – they are. That doesn’t mean the US deficit with China isn’t growing – it is.
This means that US imports from other countries are growing faster.
What President Biden, former President Trump and many others before these two men wanted was for more manufacturing to come back to the United States – largely for political reasons – or closer to the United States. , what is now called offshoring.
Let’s see what the data suggests. Let’s look at the annual period from 2016, before the trade war, to 2021:
- Overall, US imports increased by 29.48%.
- Canada, 28.59%.
- Mexico, 30.83%.
- China, 9.46%
- South Korea, 35.88%.
- Taiwan, 96.54%.
- Vietnam, 142.07%.
- Thailand, 60.69%.
Are we playing games with “rules of origin” labeling, displacing products previously stamped Made in China like Made in Vietnam or Made in Taiwan? Maybe.
But waging a new Cold War on two fronts – China and Russia – is much more difficult than waging it on one. It would be much easier to focus on Russia, whether China is on our side or simply on the sidelines.
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