There have been some remarkable anomalies within the data for exports leaving and imports coming into the U.S. during the last several months.
One of those anomalies is closely tied to a practice called frontrunning, which we've seen quite a lot of during the last six months, particularly between the U.S. and China. We've mostly covered that activity in the form of Chinese exporters acting to beat the clock on the Biden-Harris administration's anti-free trade policies.
But the same practice has also been used by U.S. exporters seeking to ship as many affected goods as they could to China ahead before the Biden-Harris trade restrictions took effect. In the following chart, we show U.S. exports of high-tech computer chips effectively doubling after the Biden-Harris administration announced new sets of tariffs and export restrictions on these products during 2024.
That surge contrasts with the declines that took place after the Biden-Harris' first trade restrictions in 2022 and 2023, which went into effect with much less advance notice. Here are contemporary news headlines corresponding to the Biden-Harris administration's major anti-free trade actions involving restrictions on U.S. exports of high-technology computer chips to China indicated on the chart in the period from 11 September 2022 through 13 January 2025:
- 11 September 2022: Biden to hit China with broader curbs on U.S. chip and tool exports
- 5 September 2023: U.S. rolls out new chip-related export controls as China makes industry advances
- 29 March 2024: U.S. updates export curbs on AI chips and tools to China
- 31 July 2024: New US rule on foreign chip equipment exports to China to exempt some allies
- 9 November 2024: US ordered TSMC to halt shipments to China of chips used in AI applications
- 13 January 2025: Biden unveils last round of AI chip curbs aimed at China, Russia
The increase in high-value U.S. computer chip exports to China during 2024 played a role in boosting U.S. GDP in this period.
There's another anomaly involving imports that gained quite a bit of attention in the media after the Atlanta Fed's GDP "nowcasting" tool suddenly forecast a deep plunge in GDP for the first quarter of 2025. That plunge was caused by an unexpected surge of gold imports rushing into the U.S.
The next chart shows the value of gold bullion imported into the U.S. from January 2021 through January 2025. It shows the imported gold rush really began after October 2024, with the level of gold imports in January 2025 reaching four times the average monthly value of gold bullion imported in the 45 preceding months:
USA Trade Online provides more detail of which countries all that additional nonmonetary gold is coming from. Here are the top three and the amount by which their exports of gold bullion changed from October 2024 to January 2025:
- Canada: Increase from $143.4 million to $1.042 billion per month.
- Switzerland: Increase from $110.0 million to $572.8 million per month.
- Hong Kong: Increase from $0 to $241.5 million per month.
The import category registering these increases is "Gold, Nonmonetary, Unwrought Nesoi", where "Nesoi" is an acronym that translates as "Not Elsewhere Specified Or Included". Imports of monetary gold (such as minted gold coins) meanwhile show a mild decline in the period from October 2024 to January 2025.
Since much of the news coverage has focused on either London or Switzerland as being the source of the increase in imported gold, we were surprised to find Canada is the biggest contributor to the surge. We were likewise surprised to discover Hong Kong is the third largest contributor, seeing as the international banking center is controlled by China.
References
U.S. Census Bureau. USA Trade Online. [Online database]. Accessed 8 March 2025.
Freifeld, Karen and Alper, Alexandra. Exclusive: Biden to hit China with broader curbs on U.S. chip and tool exports -sources. Reuters. [Online article]. 11 September 2022.
Butts, Dylan. U.S. rolls out new chip-related export controls as China makes industry advances. CNBC. [Online article]. 5 September 2023.
Reuters. U.S. updates export curbs on AI chips and tools to China. [Online article]. 29 March 2024.
Freifeld, Karen. Exclusive: New US rule on foreign chip equipment exports to China to exempt some allies. Reuters. [Online article]. 31 July 2024.
Freifeld, Karen and Potkin, Fanny. Exclusive: US ordered TSMC to halt shipments to China of chips used in AI applications. Reuters. [Online article]. 9 November 2024.
Allen, Gregory C. Understanding the Biden Administration's Updated Export Controls. Center for Strategic & International Studies. [Online article]. 11 December 2024.
Carvajal, Nikki and Liu, Juliana. Biden unveils last round of AI chip curbs aimed at China, Russia. CNN. [Online article]. 13 January 2025.
Image credit: Gold ingots by Stevebidmead on Pixabay. Creative Commons CC0 1.0 Universal Public Domain Dedication.
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