The landmark trade deal signed in 2020 between the world’s two largest economies failed to reduce the bilateral trade deficit, adding pressure on the Biden administration to deal with the unresolved economic problems with China.
In the two years since former President Donald Trump signed the deal in January 2020, China bought about $237 billion of U.S. agricultural, manufactured, and energy goods, 63% of the goods it promised to buy, according to Bloomberg analysis of official Chinese data.
Although purchases by Chinese firms have improved from the weak levels in 2019 and early 2020, it was nowhere near enough to reach the targets. China has blamed the pandemic for that, as well as factors such as the problems with Boeing Co.’s 737 Max, which was decertified after fatal crashes.
At the same time, Americans’ pandemic-stoked appetite for Chinese-made goods, including home electronics and bicycles, has pushed Chinese exports to a record high, undercutting the underlying aim of the deal to bring bilateral trade closer to balance. While there is a vague statement in the deal that China will continue buying more, there are no public targets and it’s unclear what will happen with any further purchases.
China has insisted that tariffs on its goods be removed, arguing that it will help the global economy recover and reduce inflation pressures. There’s been no negotiations to replace the deal, and President Joe Biden last week that he’s not ready to lift the tariffs on China.
Note 1: Data shown is based on preliminary data from source.
Note 2: Monthly services data are not available from China authorities.
Source: China General Administration of Customs