Weekly Updates
Weekly Updates
- Trade between the US and China is a political focus, again. Economic nationalism is a growing, destructive trend. However, China-US trade figures are behaving weirdly. Using 12-month averages, US imports from China match the lowest levels of the pandemic period, but China’s exports to the US are 27% higher. Moreover the value of China’s exports to the US today are 19% above the value of US imports from China.
- US imports from China should have a higher value than China’s exports to the US—import values include shipping and insurance costs, which export values do not. For most of the pre-pandemic period, this was what happened. In 2020, this relationship flipped, and in 2023 the difference became even more significant.
- There are possible explanations (beyond some Pacific equivalent of the Bermuda triangle). Goods shipped via Hong Kong are sometimes identified differently, but that is too small an effect to explain this change. Former US President Trump’s tariffs against China may have encouraged “rerouting”—sending goods to the US via third-party countries. However, the timing of tariffs does not fit the data details. Of course, weaker imports flatter US growth and stronger exports flatter China’s growth.
- Whatever the causes, the distortions are large enough to complicate analysis of a growing source of political tension.
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