China's Trade Dependence on America Has Reach New Low

In the first 11 months of this year (2024), the United States accounted for 11.2 percent of China's total imports and exports, the lowest level since 2001. 今年前11月美国占中国进出口总额比重为11.2%，创下自2001年以来最低水平

December 31, 2024 11:37?? Observer.com

Original Chinese-language link: https://finance.sina.com.cn/roll/2024-12-31/doc-ineciptv3762114.shtml

"As China prepares for possible tariffs after the Trump administration's return, the share of U.S. trade with China has fallen to its lowest level since China joined the World Trade Organization (WTO) in 2001. On the last day of 2024, Nikkei Asia noted that China's dependence on U.S. trade has reached a new low for some time.?

The report cited data released this month by Chinese customs officials to point out that in dollar terms, the United States accounted for 11.2 percent of China's total imports and exports from January to November this year, down 4.6 percentage points from 2001, and these data cover merchandise trade.?

The report pointed out that since Trump provoked a trade war during his first term in office and imposed tariffs on China, China has begun to reduce its dependence on U.S. trade and strengthen trade diversification. And now, as Trump wields the "big stick of tariffs" to make a comeback, China is preparing for a possible new round of trade tensions.?

Since around 2005, the U.S. share of China's trade has declined sharply as China has increased its exports to rapidly developing emerging economies, Nikkei Asia notes. During the 2019 trade war alone, the U.S. share of Chinese exports fell by 2.5 percentage points.?

From January to November this year, China's exports to the United States accounted for 14.6 percent of China's total exports, the lowest level since 2001. China's share of goods imported from the United States fell by 4.4 percentage points from its peak to 6.3 percent.?

Most of China's exports go to Southeast Asia. In the first 11 months of 2024, China's exports to ASEAN member states totaled more than US$520 billion, accounting for 16% of total exports, more than any other country or regional group, with exports to Cambodia and Vietnam each increasing by nearly 20% year-on-year. According to the report, Chinese exporters are (using) transshipment of products sold to the United States through third countries to avoid tariffs, which may also be a factor in these phenomena.?

On the import side, China has become less dependent on U.S. grain and other commodities. From January to November this year, China's largest soybean importer was Brazil, which accounted for about 70% of total soybean imports, while the United States accounted for about 20%. Before the trade war broke out in 2017, Brazil accounted for about half of China's total soybean imports, while the United States accounted for about 30%. China's share of wheat imports from the United States has also fallen to less than 20% from nearly 40% in 2017, while Australia, Canada and France have emerged as suppliers with larger market share.?

Previously, when Trump provoked a trade war with China, China imposed tariffs on U.S. soybeans and wheat and other products in response. And some analysts believe that this trend could change if trade tensions between China and the United States escalate, given Trump's penchant for trading.?

"As part of a deal with Trump, China can commit to importing more from the United States." This was stated by an analyst at the Japanese research institute Mizuho Research Technologies.

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On November 28, local time, Bloomberg reported that some U.S. traders thought that U.S. soybean exports to China would slow down before Trump took office, but China still "unexpectedly" continued to buy U.S. soybeans.

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A Chinese state-owned enterprise recently bought at least eight batches of soybeans to build up national reserves, the report quoted traders familiar with the matter as saying. According to the latest export sales bulletin released by the USDA on November 27, data from private exporters showed that the United States sold 132,000 mt of soybeans to China that week for delivery in the 2024/2025 marketing year.?

China has stepped up its purchases of Brazilian soybeans but is still buying U.S. soybeans as reserves, the report said. Late U.S. growing season conditions favor dry crops, and U.S. soybeans can often be stored longer due to lower moisture content, making them more attractive to Chinese buyers.?

During the campaign, Mr. Trump repeatedly threatened to impose new tariffs of up to 60 to 100 percent on Chinese goods and 10 to 20 percent on imports from all other countries if he were elected president. On November 25, after his victory, he threatened to impose an additional 10 percent tariff on all imports from China on his first day in office.?

The Nihon Keizai Shimbun reported on December 13 that Trump's tariff policy could lead to a slowdown in the U.S. economy. According to estimates conducted by the Japan External Trade Organization (JETRO) Asian Economic Research Institute commissioned by Nikkei, Trump's proposed tariff rate will lead to higher prices and fewer jobs in the United States, and the gross domestic product (GDP) of the United States will be lowered by 1.1% by 2027.?

Among them, the GDP of mining and agriculture will be dragged down by 1.5% each, which has a huge impact. The Nihon Keizai Shimbun bluntly said in its report that the United States, as the world's largest economy, "will lose the fruits of free trade."?

The report further analyzed and pointed out that part of the reason is that it is difficult to find alternatives to some products imported by the United States from China, such as natural graphite, permanent magnets, which are key raw materials for the new energy industry, and their cost increase will "backfire" the US economy. As of 2023, the United States imports 77.8% of natural graphite and permanent magnets from China, and 65.1% of lithium batteries for electric vehicles imported from China, according to JETRO.

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At a time when Trump is making a big deal about tariffs around the world, the American business community is already panicking. "Everybody's on the phone." CNBC reported last month that Trump's promised tariff plan has left U.S. companies racing to find lobbyists and policy loopholes to try to keep their businesses out of action.?

"I feel like we're being punished, and we have nowhere to run from it in the country." A representative of an American company said of Trump's proposed tariffs, "We have no choice but to pay them, really." Flores, 58, the owner of a wholesale vegetable company in Los Angeles, also said that the Trump tariffs would make everyone have to spend more money "because no matter how much they charge us, we will pass it on to consumers."?

Regarding the trade protectionist measures taken by the United States, the spokesperson of the Chinese Foreign Ministry has repeatedly pointed out that the United States continues to politicize economic and trade issues and further increase tariffs on China, which will only significantly increase the cost of imported goods, make American companies and consumers bear more losses, and make American consumers pay a greater price. China urges the US side to earnestly abide by WTO rules and immediately lift the additional tariffs imposed on China. China will take all necessary measures to defend its rights and interests.