Despite the fierce trade war and the economic impact of the coronavirus pandemic, the United States still largely depends on China. The dependence is evident in the value of exports and imports between the two countries.
Data presented by Bankr indicates the United States imports from China have grown by 126.29% to $292.64 billion between March when the coronavirus was declared a pandemic and October 2020. As of October, the value of imports stood at $44.83 billion. Elsewhere, the March import value was $19.81 billion.
The research also reviewed the value of China’s imports from the US during the same period. The value increased by 84.69% to a total value of $81.76 billion, which is at least 3.5 times less than US imports from China. The highest value of China imports from the US was in October at $14.7 billion. In March, the value stood at $7.97 billion.
China early pandemic recovery increases exports to US
The data analysis shows that the United States still needs China despite fiery rhetoric on trade tariffs. Furthermore, the flow of goods from China to the US has not slowed down in the wake of the pandemic.
Notably, the increasing exports to the US in the wake of the pandemic found China in a better place. While the United States economy was crippling, China had resumed operations after the government declared it had contained the pandemic back in March. The imports from the US were also low because not much production was ongoing in the US economy. At the same period, China embarked on self-sustainability as major importing partners were grappling with the pandemic.
The increasing export to the US is part of China’s strenuous efforts to restructure the export framework since the 2008 financial crisis. Under the framework, the country resorted to increasing the added value in the final product and progressively embracing growth. Although it was slowed down by the pandemic, signs of recovery are visible.
It is worth noting that the two governments reached a deal early this year to postpone further planned tariff hikes on each other’s goods. However, most penalties had already been imposed on billions of dollars of imports that stayed in place. Following the agreement, China promised to buy more American products to end a costly tariff battle over Chinese technology ambitions. Although the Chinese imports from the US have risen this year, the value is still low. The low value of imports is due to retaliatory tariffs. Notably, China fell behind on meeting the commitments earlier in the year but is catching up as demand rebounds.
However, no single reason explains why China did not meet the phase one agreement. Initially, the pandemic sent the Chinese economy into turmoil, but its trade has recovered faster than most economies. The recovery has seen exports to the US accelerate in 2020. China has been dominant in the manufacturing sector.
US long reliance on China’s manufacturing industry
Despite the exiting trade wars, the US still depends heavily on China for providing low-cost goods that enable income-constrained American consumers to sustain themselves. The US also relies on China to support its exports. Notably, China is emerging as the United States’ major export partner.
Economists argue that the US dependence on China is due to lost common industries with
engineering and manufacturing capabilities that sustain innovation in physical products. The shift has forced the US to keep outsourcing production, a move that has left the country without the full means to remain innovative. This situation has left the US reliant on China since its largely the only country on the globe that can meet its demands.