In 2020, the global economy underwent significant shifts, and the US-China commercial relationship was no exception. Early in the year, the United States and China signed and implemented the Phase One trade agreement and halted tariff escalations for the first time in two years. Last year saw a healthy recovery of goods exports to China, though services exports—the data for which lag a year behind—have fallen for the first time since 2003.Combined exports of goods and services to China still supported nearly 1 million US jobs in 2019, the most recent year for which data are available.
- Goods exports to China rebounded in 2020. US goods exports to China grew by roughly 18 percent, marking a healthy rally from a near- decade low in 2019. Thirty-five states saw growth in goods exports to China, and nine saw growth of over $1 billion.
- In 2019, services exports to China fell in most
states. After years of slowing growth, services exports to China fell by 3 percent across the United States, with only eight states registering a positive change. Services exports to China have traditionally been a strong point for US export expansion, registering triple-digit growth over the past decade. - China is the United States’ third-largest market for goods exports and fourth-largest for services exports. A healthy rebound of goods exports to China has helped the country maintain its status as the United States’ third-largest market despite bilateral tensions. Regarding US services exports, declines in 2019 caused China to slip from the third- to fourth-largest services market, falling just short of Ireland.
- Exports to China benefit nearly all US states and industries. China was a top-five goods export destination for 45 states in 2020. The top US goods exports to China are oilseeds and grains, semiconductors and their componentry, oil and gas, and motor vehicles. Many states also generate substantial economic value from service exports like travel, education, and financial services.
- Tariff exclusions in support of trade commitments helped fuel a recovery in US goods exports to China. While the United States and China still maintain tariffs on each other’s goods, China’s tariff exclusion process, which began in March 2020, allowed for a more normal flow of goods from the United States. China established these exclusions to support its Phase One commitments to purchase high volumes of US energy, manufacturing, and agriculture products. While China did not meet its targets, it did significantly increase its goods imports compared to 2019. Absent the removal of tariffs, it is unclear if US exports can maintain momentum over the long term.
To read the full report from the US-China Business Council, please click here.