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US Two-Way Trade Rose In 2022, New Data Show

US Two-Way Trade Rose in 2022, New Data Show

US Two-Way Trade Rose in 2022, New Data Show

FILE – A flag of the United States of America flies next to the Chinese national emblem at the Great Hall of the People in Beijing, Nov. 9, 2017. The United States’ two-way trade with other nations — including China — spiked in 2022, according to data released this week The United States’ two-way trade with other nations spiked in 2022, new federal data show, including trade with China despite increasing friction between the world’s two largest economies. Even while posting record-high exports to 73 countries in 2022, the U.S. still ran a trade deficit of $1.19 trillion, up $101 billion from 2021, the U.S. Commerce Department said this week. The deficit reflected the fact that the U.S. also recorded record-high imports from 90 countries. U.S. imports from China reached $537 billion in 2022 compared with $505 billion the previous year. The U.S. sold a record-high $154 billion in exports to the Chinese market, up slightly from $151 billion the previous year. The net trade deficit with China for 2022 was $383 billion. The data, released Tuesday, came out just hours before U.S. President Joe Biden delivered the State of the Union address in which he promised to boost domestic manufacturing, to use only U.S.-made materials for a spate of infrastructure projects, and to remain focused on “winning the competition” against China. However, what “winning” looks like may be difficult to determine. Politics versus reality Relations between the U.S. and China worsened during the past week, after Biden ordered the U.S. military to shoot down what intelligence officials said was a Chinese espionage balloon that had floated across the U.S. Prior to the shoot-down, U.S. Secretary of State Antony Blinken canceled a scheduled trip to Beijing. The balloon incident followed months of rising tensions and calls from many U.S. officials for a “decoupling” of the Chinese and U.S. economies and “reshoring” of key manufacturing to the U.S. But while the Biden administration may be able to use preferential purchasing treatment to shut Chinese construction materials and other goods out of U.S. infrastructure projects, experts said there is little evidence of broader separation between the U.S. and Chinese economies. “Regardless of the political rhetoric, which is tending towards a kind of rigid and suspicious environment between China and the United States, the practical moves on the ground from a business and commerce perspective show that there is a deep and sustained connection between the Chinese and U.S. economies,” Claire Reade, a senior counsel with the law firm Arnold & Porter and former assistant U.S. trade representative for China affairs, told VOA. Mark Kennedy, director of the Wilson Center’s Wahba Institute for Strategic Competition, agreed, saying, “There has not been a broad-based decoupling … and many economists are seeing that there really hasn’t been a significant onshoring or reshoring. There are still strong ties, and to break those ties with China would be both difficult and costly.” Trade as ‘ballast’ Craig Allen, president of the U.S.-China Business Council, told VOA it’s a good sign that trade between the U.S. and China has been persistently strong despite the imposition of tariffs by both sides and the Biden administration’s recent move to block the sale of cutting-edge microprocessors to China. “Trade has acted as an important ballast in the relationship between Washington and Beijing in the past, and I think it’s still the case,” he said via email. “Competition is surely defining the contours of the relationship at the moment, and we hope that the relationship doesn’t sour any further as a result.” “I think, to that point, this new data can be a silver lining,” said Allen. “Even though the United States and China are competing with one another, this last year of data and the growth in U.S. exports to China really shows that we can simultaneously maintain a trading relationship that benefits Americans.” A delicate balance Reade said the Biden administration, in its effort to privilege American manufacturers over Chinese firms, will face a difficult challenge. Insulating American companies from non-U.S. rivals could make them less able to compete internationally or could lead to tit-for-tat protectionism against U.S. firms. At the same time, she said, there is strong evidence that many large Chinese firms, including those that manufacture the kinds of goods used in major infrastructure projects, receive favorable treatment from the Chinese government that insulates them from market pressures, unfairly advantaging them over competitors. “To the extent the competition is not fair competition, it is also legitimate to not […]

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Daisie Hobson

Daisie Hobson is a Director at the Reshoring Institute and an engineer with many years of experience in manufacturing and project management.

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