Continuing trade flows skirt snags in Sino-US ties

NEW YORK (China Daily/ANN): Looking at the latest China-US trade figures, fueled by voracious consumer demand, it would be hard to tell the two countries have been involved in a trade standoff for over three years.

"We said during the trade war the global economy would continue to grow and prosper, and it has. China was, and remains, our largest trading partner, accounting for about 60 per cent of containeriSed imports and 30 per cent of exports in 2020," said Noel Hacegaba, deputy executive director of the Port of Long Beach in Southern California.

"Strong consumer demand that surfaced in the early months of the pandemic has continued, and the amount of cargo our terminals and dockworkers have been moving is incredible."

According to US Census Bureau data for May, the latest figures available, trade with China was responsible for 13.9 percent of all US trade, after Mexico (14.7 per cent) and Canada (14.5 per cent).

The United States imported US$189.7 billion worth of goods from China-the most imports from any country, accounting for 17.3 percent of US imports so far in 2021-while China took in US$59 billion worth of US goods, as its agricultural purchases have increased.

China's trade numbers also show percolating activity.

Bilateral trade grew 45.7 per cent year-on-year to US$340.8 billion in the first six months of 2021, faster than China's trade with the Association of Southeast Asian Nations (up 38.2 percent) or the European Union (up 37 per cent), statistics from the General Administration of Customs released on July 13 showed.

China's exports to the US surged 42.6 per cent with its appetite for computers, home appliances, smartphones and clothes remaining steady, according to Chinese customs. Imports from the US jumped 55.5 per cent in dollar terms.

Perhaps it is the healthy post-pandemic appetite of consumers in both countries that is overriding the political differences.

"The bustling trade has defied all expectations that the tariffs on hundreds of billions of dollars' worth of merchandise would force a decoupling of supply chains. Instead, both sides have learned to live with the taxes, with Chinese firms buying more to fulfill the terms of the 2020 trade deal, and US companies purchasing goods they can't get elsewhere to meet elevated household demand fueled in part by trillions of dollars in government stimulus," Bloomberg said in a report.

That demand is reflected in US port traffic. Almost half of the US$259 billion in cargo passing through the Port of Los Angeles involves trade with the Chinese mainland and Hong Kong.

"Key economic indicators all suggest that US consumer spending will remain strong through the remainder of 2021," said Port of Los Angeles Executive Director Gene Seroka.

"Fall fashion, back-to-school items and Halloween goods are arriving on our docks, and some retailers are shipping year-end holiday products early," Seroka added.

"All signs point to a robust second half of the year, which is good news for the nearly 1 million residents in the region who have jobs tied to the San Pedro Bay port complex."

Craig Allen, president of the US-China Business Council, in a June 24 article on Politico noted that the economies of the individual US states often are not considered when Washington takes action on bilateral trade.

And while the bilateral relationship isn't characterised by the volatility of former president Donald Trump's tenure, the administration of President Joe Biden hasn't sought to remove any US tariffs on US$360 billion worth of Chinese goods.

The White House has been conducting a review, now in its seventh month, of the economic relationship between the two countries. The review includes the 2020 phase one trade deal.

Treasury Secretary Janet Yellen, in a July 16 interview with The New York Times, however, said that the tariffs "are taxes on consumers".

As to talk of the two countries decoupling economically, Yellen said: "I think we should maintain economic integration in terms of trade and capital flows and technology where we can."

Gary Hufbauer, a senior fellow at the Peterson Institute of International Economics in Washington, said that Yellen and US Trade Representative Katherine Tai should seek to return US-China trade to normal "most favored nation" status over the next year or so. - China Daily/Asia News Network

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