Doug Barry ([email protected]; 202-429-0340)
Contact in Beijing:
Jake Parker ([email protected]; 86-10-6512-5854)
WASHINGTON, DC, May 1, 2019 – US goods exports to China slumped last year as teeth grown in trade disputes between the two countries began to bite, according to an annual study of US exports by state released by the US-China Business Council (USCBC) today.
The value of US goods exports for 2018 fell 7 percent from last year’s record high. Total US goods exported to China were worth $119 billion, down $9 billion from 2017. 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 one percent due to the separate trade conflicts between those two countries.
“Trade tensions and punitive actions have consequences for the national economy, as well as at the state level,” said Craig Allen, president of USCBC. “We need a substantive agreement between the United States and China to address the long-standing concerns of foreign companies in China. A sustainable agreement must provide a way to verify that commitments are implemented, including for further market opening, intellectual property protection, and equal treatment for US companies.That agreement must also include a plan of action for the removal of all or most of the tariffs to reverse the damage we saw in 2018.”
A trade agreement may be signed in the coming weeks by President Donald Trump and President Xi Jinping. If the agreement includes a major purchase of US goods, as news reports suggest, US export growth could resume in 2019, Allen said.
Last year, citing losses from intellectual property theft and national security concerns, the Trump administration announced a series of punitive tariffs against a range of Chinese goods. China retaliated by hitting an array of US goods with higher tariffs. Exports from farm states in the Midwest were hit particularly hard.
US services exports to China provided a counterpoint to goods, rising 4.1 percent to $56 billion. China is the third largest purchaser of US services after the United Kingdom and Canada. But services export growth slowed in 2017, the most recent year for which data are available, suggesting they are not immune from trade disputes. Services, which include international travel, tuition paid by international students, royalties, and licenses, are not subject to tariffs.
Despite the decline in the value of goods exports, China remains a valuable customer for products of many states. The 10-year trend for most states shows a steady increase, in many cases growing much faster than exports to any other country.
Other Findings in the Report
- Only 16 states increased their goods exports to China in 2018 over the previous year. Twenty-four states had double-digit declines in goods exports during that same period.
- Of the 15 states that exported the most goods to China in 2018, many saw a year-over-year decline, but this did not erase the overall gains that those states saw over the last decade. Only two states—Hawaii and Louisiana—exported less to China in 2018 than they did in 2009, and 44 had at least double-digit growth over that period.
- All 50 states experienced triple-digit services export growth to China since 2008, but slower increases in 2017 affected the ten-year returns for many states. In 2016, 31 states had export growth of more than 300 percent over the previous ten years. The following year, only 12 states met that mark.
- In 2017, China was the top market for services exports for 15 states, compared to 18 states in 2016, and a top-five market for 49 states.