Business

Despite Trump’s tariffs, China’s trade surplus with the United States widened in 2020

A container ship leaves a port in Nantong, Jiangsu Province, last month. (AP photo)

BEIJING: China’s trade surplus with the United States expanded last year, confirming Donald Trump’s failure to narrow the gap during his tenure, and demand for electronics and medical equipment rose during the Coronavirus pandemic.

The recovery came on the back of a jump in exports during most of last year, as Chinese factories returned to work from the second quarter after a tight lockdown that managed to contain Covid-19 on a large scale and allow economic activity to return.

Trump made addressing the widening trade gap with China a priority when he took office four years ago, and signed a partial agreement with Beijing to boost the country’s purchases of goods like soybeans.

But Chinese customs data showed that the surplus with the United States increased 7.1% to $ 316.9 billion in 2020.

While the second-largest economy in the world suffered a record contraction in the first quarter of last year as the Coronavirus basically caused all activities to stop, it quickly recovered as the lockdown eased across the country and people returned to work.

Exports to the world increased by 3.6%, although imports contracted by 1.1%.

However, exports and imports increased in December more than expected, by 18.1% and 6.5%, respectively.

“With the epidemic under control in China, export-oriented factories and companies resumed their normal operations earlier than most other countries, allowing China to better meet global demand,” said Stephen Innes, an Axi strategist.

The country recorded a trade surplus for the past month of $ 78 billion, which analysts said was “at or near record levels”.

“In the face of unprecedented difficulties and challenges, our country’s imports and exports have presented an impressive report card,” customs spokesman Li Koywen told reporters on Thursday, adding that the result was “much better than expected.”

Li said that shipments from electronics rose, with a marked increase in laptops and home appliances, as well as medical tools and equipment.

Iris Bang, chief economist at ING for Greater China, told AFP that China’s exports were likely to be good because “the other exporters for most of the year have been in difficult situations due to Covid-19,” which has diverted more orders to China.

With regard to the surplus between the United States and China, she said that the restrictions of the Corona virus in the United States will also harm its export capacity.

“The other thing is, during Covid-19, prices of some basic commodities decreased and affected the value of what China imports,” she said, adding that Beijing would likely continue to fulfill the terms of the trade agreement with the United States, except for additional requests from Washington.

Lu Ting, chief Chinese economist at Nomura, noted that China’s imports from the United States jumped 45% year on year in December, “indicating Beijing’s continued efforts to fulfill its commitments in the first-phase trade deal.”

Relations between the United States and China have deteriorated to their worst in decades under the Trump administration, largely due to the trade war that saw Washington hit Chinese imports with massive tariffs. Draw retaliatory measures and reciprocal movements.

But overall, Luo said he expects export growth to remain “high” in the first half of 2021, partly due to another wave of Covid-19 infections, boosting demand for protective gear and work-from-home products around the world.

In an interview with The Wall Street Journal this week, US Trade Representative Robert Lighthizer defended the Trump administration’s tactics to impose tariffs on hundreds of billions of dollars in Chinese goods, saying the president had “changed the way people think about China.”

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button