Unexpectedly Intriguing!
November 5, 2020

After bottoming in July 2020, the trailing twelve month average of the combined value of goods traded between the U.S. and China continued to move upward in September 2020.

That latest change can be seen in our chart showing the history of this metric from January 2008 through September 2020.

Combined Value of U.S. Exports to China and Imports from China, January 2008 - September 2020

With January 2020's 'Phase 1' trade deal between the U.S. and China, the volume of trade between the two countries should have begun recovering in February. Instead, it plunged through March 2020 because of the coronavirus pandemic starting in China, before beginning to recover in April 2020. In September 2020, the volume of trade is $3.9 billion higher than what was recorded in September 2019, as China has significantly increased its imports of U.S.-produced agricultural goods.

So how much has the coronavirus pandemic affected the level of trade between the U.S. and China? We find a gap of $10.3 billion has opened between the trailing year average of trade between the two nations and a 'No Coronavirus Pandemic' counterfactual through September 2020. This figure represents the total trade loss attributable to the pandemic.

As of September 2020, the U.S. is recording higher year-over-year growth in the value of the goods it imports from China. Here is a chart illustrating the year-over-year growth rates in the value of U.S. goods exported to China and Chinese goods imported to the U.S., where we find both countries are seeing positive year-over-year growth since the beginning of the global coronavirus recession. The chart shows the entire modern history of this measure from January 1986 through September 2020.

Year Over Year Growth Rate of Exchange Rate Adjusted U.S.-China Trade in Goods and Services, January 1986 - September 2020

The biggest change is the result of China finally acting to meet its obligations to purchase U.S. agricultural goods under the terms of the Phase 1 trade deal, which accounts for the strong surge in U.S. exports to China.

In turning positive, the year over year growth rate of U.S. imports from China comes as the nation's economy recovers from the coronavirus recession, providing another indication that this recession may be short lived.

Previously on Political Calculations

Here are the previous episodes of our series exploring the impact of the coronavirus pandemic on trade between the U.S. and China, presented in reverse chronological order!

References

Board of Governors of the Federal Reserve System. China / U.S. Foreign Exchange Rate. G.5 Foreign Exchange Rates. 4 November 2020.

U.S. Census Bureau. Trade in Goods with China. 4 November 2020.

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