Record US-China Trade in 2022 Despite Political Rhetoric
By Trade between the US and China hit a record high in 2022, as official figures released by the US Commerce Department this week show.[0] The figures, which are not adjusted for inflation, show that exports to China increased by $2.4 billion to $153.8 billion, while imports of Chinese products rose by $31.8 billion to $536.8 billion.[1] This resulted in a total merchandise trade between the two countries of $690.6 billion.[2]
The data shows that despite the US government's decisions to impose tariffs and export controls, as well as political rhetoric to decouple from China, trade growth between the two major economies remains robust.[1] Consumer goods imports increased by $4.5bn to $258.8bn, with purchases of consumer goods led by a $3.5bn rise in cell phones, while those of automotive vehicles and parts jumped by $2.9bn.[3]
The US trade deficit widened to $67.4 billion in December, as exports dropped to $250.2 billion and imports edged up to $317.6 billion.[4] The US Department of Labor’s seasonally adjusted terms showed an increase in the goods and services deficit of 10.5%. The annual goods-trade deficit with China widened 8% to $382.9 billion, while the overall goods and services deficit climbed 12.2% to almost $1 trillion.[3]
The record value of imports in 2022 reflects a push by retailers to replenish inventories ahead of peak selling periods, as well as a robust job market and government stimulus programs that have kept consumer spending resilient.[5] The probability of a US recession has grown due to tighter policies, which could lead to a decrease in household spending.[5]
Meanwhile, US companies and consumers have benefited from a strong dollar through much of 2022, which has made foreign-made goods more competitive.[5] Travel exports rose to $13.3 billion, while exports of goods and services dropped -0.9% to USD 250.2B.[5]
In Canada, merchandise exports decreased 1.2%, mostly on lower exports of energy products, while imports dropped 1.3%, mainly driven by lower imports of consumer goods.[6] This resulted in a merchandise trade deficit with the world narrowing from $219 million in November to $160 million in December.[7]
0. “Two-way trade between China – U.S. at record levels” TICKER NEWS, 8 Feb. 2023, https://tickernews.co/two-way-trade-between-china-u-s-at-record-levels/
1. “US-China Trade Hits Record Despite Decoupling Rhetoric” teleSUR English, 8 Feb. 2023, https://www.telesurenglish.net/news/US-China-Trade-Hits-Record-Despite-Decoupling-Rhetoric-20230208-0002.html
2. “US-China trade defies talk of decoupling to hit record high in 2022” CNN, 8 Feb. 2023, https://www.cnn.com/2023/02/08/economy/us-china-trade-record-hnk-intl/index.html
3. “U.S. Trade Deficit Hit Nearly $1 Trillion in 2022, Largest on Record” Investopedia, 7 Feb. 2023, https://www.investopedia.com/us-trade-deficit-hit-nearly-one-trillion-in-2022-7106686
4. “US trade deficit widened to USD -67.4B in Dec” Action Forex, 7 Feb. 2023, https://www.actionforex.com/live-comments/485199-us-trade-deficit-widened-to-usd-67-4b-in-dec
5. “US Trade Gap Widened to Record in 2022 on Imports Surge By Bloomberg” Investing.com, 7 Feb. 2023, https://www.investing.com/news/economic-indicators/us-trade-gap-widened-to-record-in-2022-on-imports-surge-2997313
6. “Statistics Canada reports merchandise trade deficit $160 million in December” Financial Post, 7 Feb. 2023, https://financialpost.com/pmn/business-pmn/statistics-canada-reports-merchandise-trade-deficit-160-million-in-december
7. “Canadian international merchandise trade, December 2022” Forex Factory, 7 Feb. 2023, https://www.forexfactory.com/news/1204364-canadian-international-merchandise-trade-december-2022
