The United States’s goods imports from China fell by 25 percent during the first six months of 2023, the Department of Commerce reported on Aug. 8. Mexico and Canada have replaced China as the top providers of goods to the United States, as a result of the nearshoring shift for more diversified supply chains. Meanwhile, China has increased trade with Russia.
The United States imported about $203 billion in goods from China in the first six months this year, 25 percent less than in the same period in 2022, according to the latest data released by the Commerce Department. The figures are not adjusted for inflation.
The data show that China’s share of U.S. goods imports was at 13.3 percent during the first six months of the year, down from 16.5 percent at the same time last year.
The U.S. goods trade deficit with China fell by $2.1 billion, to $22.8 billion, with imports dropping by $2.3 billion. The trend could continue as China reported on Aug. 8 a double-digit plunge in exports on a year-over-year basis.
Bilateral trade between the United States and China has been hindered by the rising tensions between Washington and Beijing over issues such as human rights, fair trade, military confrontations, geopolitics, and competition for technology and markets. U.S. companies have looked to other countries to de-risk and diversify their supply chains amid increasing friction between Washington and Beijing.
The United States has been shifting toward a “nearshoring” practice in global trade, which aims to bring supply chains for crucial goods to countries that are closer physically and politically, such as Canada and Mexico. Such a practice not only reduces the pressure on the long-distance offshore supply chain but also poses a challenge to China’s world economic status because it reduces the world’s dependence on Chinese-made goods.
Because of China’s unfair trade practice, the United States has, since the Trump administration, increased tariffs on Chinese goods to 19.3 percent, far higher than the 9 percent level of other “most-favored nations.”
China has now dropped to the third-largest provider of merchandise to the United States behind Mexico and Canada. U.S. goods imports from Mexico increased by 5.4 percent in the first half from 2022.
China’s Foreign Trade Plummets
Meanwhile, China’s General Administration of Customs released the nation’s exports and imports data in July on Aug. 8.It shows that exports from China in July declined by 14.5 percent year over year, to $281.76 billion, which is the third consecutive monthly decline and the sharpest drop since February 2020.
Imports from China’s largest trading partners plummeted by double digits, including South Korea (negative 23 percent), Japan (negative 14.7 percent), Taiwan (negative 14.3 percent), and the United States (negative 11.2 percent), according to China’s General Administration of Customs.
The data show that China’s imports and exports to major economies in Europe, America, and Asia fell almost across the board.
China Increases Trade With Russia
There are only four countries and regions with positive growth in total import and export trade with China: Russia ranked first, with an increase of 36.5 percent, followed by Singapore, with an increase of 8.1 percent, Australia with 5.4 percent, and Africa with 0.1 percent.China’s exports to Russia rose by 52 percent to $10.28 billion in July, but the increase was much slower than June’s 90.9 percent increase. While China’s exports to Russia have been relatively stable compared with sluggish demand elsewhere, they make up only a small fraction of China’s overall exports, accounting for just 3 percent of the total from January to July this year.
