China’s U.S. trade surplus in 2019 dropped 8.5% to $296 billion
China’s trade surplus with the US decreased last year as the world’s two largest economies traded punitive tariffs in a grinding trade war, data showed Tuesday, just as the two are planning to ink a tension-dropping agreement.
A primary bone of contention for the US is the considerable difference in trade flow. President Donald Trump raises tariffs on goods worth hundreds of billions of dollars in the long-running stand-off he has endured, prompting backlash from China and shaking the global economy.
In 2019, China’s surplus stood at around $295.8 billion, down 8.5 per cent from the previous year’s peak of $323.3 billion, customs data suggest.
Meanwhile, China’s total trade with the United States plummeted from a year ago in 2019 to 3.7 trillion yuan ($537 billion) in yuan terms by 10.7 per cent, the government reported, as the protracted trade war disrupted ties.
“The risks are increasing at home and abroad,” a Chinese General Customs Administration spokesperson acknowledged during a news conference.
Chinese surplus to the US was about $23.2 billion in December, down from $24.6 billion a month ago.
According to officials in Washington, the mini-trade deal announced last month would see China buy an additional $200 billion in U.S. goods for two years. China has yet to announce the statistics officially.
The Trump administration has called off new tariffs on Chinese-made goods such as smartphones, which were to come into effect last month. It also halved those of $120 billion worth of goods levied on Sept. 1.
Yet Washington imposes duties of 25 per cent on Chinese imports worth around $250 billion.
Washington on Monday, in another indication of de-escalation, dropped the currency manipulator mark it placed on China in the summer.
At a news conference Tuesday, customs spokesperson Zou Zhiwu said Chinese shipments from the U.S., including soybeans and pork, have picked up since November and December.
Zou noted that the growing U.S. imports would not affect China’s exports from other nations.
He also said the trade disputes have “imposed some pressure on China’s foreign trade and firms that largely trade with the U.S.” “Even though our exports to the U.S. have declined, the efficiency of enterprises diversifying their markets has been significant,” he said, adding that exports to non-U.S. Markets have grown, and shipments are still on the rise overall.
According to Zou, signing the new trade deal, which is part of a planned broader pact, will have “important and positive significance” not only for China and the U.S., but also for the world.
China’s amount of foreign trade fell slightly year on year in 2019, and its global surplus peaked at $421.5bn.
Chinese exports grew 7.6 per cent year-on-year in December, higher than the 2.9 per cent predicted in a Bloomberg News survey. Imports grew 16.3 per cent, far beyond forecasts.
Exports grew by 0.5 per cent for the full year, while imports fell 2.8 per cent.
Food imports soared over the past 12 months when officials carried in 2,108 million tons of pork— a rise of 75 per cent from the previous year, while beef imports rose 60 per cent.
The vast leaps come as the country’s stock of pigs is battered by an African swine fever epidemic that has wiped out about 40 per cent of the national pig herd.
Nick Marro at the Economist Intelligence Unit said the overall export recovery for China in December is likely due in part to a low comparison base from the previous year.
“It was around this time last year that we first began to see the impact of both the trade war and the slowdown of global electronics bite on China’s commercial data,” he said.
While shipments to Europe and Southeast Asia are on the rise, Marro said these markets could not fully replace the U.S. “However, China’s efforts to pivot towards alternative sources of demand may begin to pay off as a cushion for lost U.S. market access,” he said, adding that growth in shipments to Vietnam outperformed any other primary export market.