WASHINGTON, DC, September 12, 2019 – US goods exports to China slumped last year, with the nation taking a particularly hard punch to its breadbasket. Districts dependent on agricultural exports saw sales to China shrivel as a result of the ongoing and deepening trade conflict between the world’s two largest economies.
Growth in exports to China slowed across the United States, according to a study released today by the US-China Business Council (USCBC), which counts among its members some of the world’s best-known brands.
Two hundred and sixty-five congressional districts saw lower goods exports volumes in 2018 than in 2017, and another 61 districts saw less than $10 million in export growth in the same period. Midwestern and Plains districts that export significant quantities of soybeans and other agricultural products were hit particularly hard.
“Cities and states across the US, as well as businesses that pay taxes and employ people there, continue to suffer, especially from loss of sales as a result of punitive tariffs,” said USCBC President Craig Allen. “Since these data were collected in 2018, the results today are even worse when you include additional rounds tariffs since January, with more yet to come,” Allen said.
USCBC continues to call on both countries to return to the negotiating table, address structural issues in China that prevent US companies from receiving fair treatment, and to lift punitive tariffs.
About 1.1 million US jobs are dependent on exports to China, according to the report. “Most Americans are not aware of how interdependent the two economies are,” Allen said. “We read about increased prices for many consumer goods, but we often don’t realize that a drop in demand can eliminate well-paid local jobs.”
The value of US goods exports in 2018, $118 billion, fell 7 percent from last year’s record high of $128 billion. Despite the drop, China remains the third largest market for US goods exports after Canada and Mexico. Compared to the decline in China exports, goods exports to Mexico increased 9.4 percent in 2018, though US exports to Canada increased less than 1 percent due to the separate trade conflict between those two countries.
In services, which include financial services, licensing, entertainment, inbound tourism, international student tuition, and other sectors, 100 districts exported less to China in 2017 than they did in 2016, and only 23 districts had double-digit growth in services exports. Compare that with 2015-2016, when only eight districts saw a decline in services exports and 380 saw double-digit or higher growth. Services are not subject to tariffs, but neither are they insulated from trade tensions. Collection and analysis of services export data lag goods export data by one year.