A 43.06% surge in exports to China is one of two pronounced changes in U.S. trade in early 2021, leaving the United States a miniscule 0.05% below the 2019 pre-pandemic levels for its trade with the world, new data shows.
While overall U.S. exports to the world were down $8.47 billion, when comparing the first two months of 2021 to the same period of 2019, they were up $6.7 billion to China.
Why? China’s economy fared far better than any other major world economy in recovering from the global pandemic.
Exports were also up $1.57 billion to South Korea from that pre-pandemic year.
The second pronounced change is surging U.S. imports. Imports narrowly missed topping $400 billion for the first time through the first two months of 2021, according to data released Thursday.
Why? The U.S. government’s massive stimulus programs and policy decisions from the Federal Reserve that have kept the economy afloat — and consumers and, to a lesser extent, businesses buying.
One place from which U.S. imports are not surging? China.
When compared to 2019, U.S. imports from China were down $10.58 billion while they were up more than $1 billion from nine nations, more than $2 billion from four of those and almost $3.72 billion from Vietnam, which is now the United States’ No. 8-ranked trade partner, just months after finishing in the top 10 for the first time.
So, if the Chinese are not behind a surge in imports, who is, in addition to Vietnam, and what are those imports? And, if China is bucking the trend on U.S. exports, what is it buying?
First, an overview.
Through February, U.S. trade totaled $650.20 billion. That’s actually a 2.25% increase over the 2020 level. Although the Chinese New Year was a factor in February trade in 2020, the influence on export-import trade of Covid-19 did not begin until March.
U.S. exports stood at $251.57 billion, a 3.68% decrease from the record start in the first two months of 2020 and a 3.26% decrease from the first two months of 2019.
U.S. imports stood at $398.62 billion, a 6.38% increase from 2020 and 2.08% increase from 2019.
The U.S. trade deficit? It stood at $147.05 billion, an almost 30% increase over 2020 and a 12.73% increase from 2019.
Let’s start with what U.S. exports the Chinese are buying this year.
The leading U.S. exports is soybeans. Although the U.S. shipping season is largely over, peaking in the late fall and early winter before transitioning to Brazil in the Southern Hemisphere, those exports more than doubled from the first two months of 2019, from $1.21 billion to $3.23 billion. Soybeans were at the heart of the U.S.-China trade war — but no longer.
China is the world’s largest producer and consumer of pigs, and those pigs need to be fed. U.S. exports of grain sorghum increased 605% from 2020 and more than 175,000% from 2019, to a 2021 total of $383.90 billion. Corn also increased rapidly, up 161,006% from 2020 and 56,873% from 2019, to a 2021 total of $509.92 billion.
China has a lot of people to feed in a rapidly growing economy.
Then there’s oil, another pawn in the U.S. trade war begun by former President Donald Trump in 2018 and continuing under President Biden nearly four years later.
U.S. oil exports grew from $0 in the first two months of 2020 and just under $243 billion in 2019 to $972.93 billion in the first two months of this year.
And those nations with big increases in U.S. imports? In addition to Vietnam, the eight other nations are Switzerland ($3.16 billion), Canada ($3.12 billion), Ireland ($2.59 billion), Malaysia ($1.64 billion), Taiwan ($1.41 billion), Thailand ($1.36 billion), Mexico ($1.17 billion) and Russia ($1.07 billion).
The fastest-growing U.S. imports from the world this year all align with the Covid-19 pandemic: computers, medicines largely in pill form, and the category of vaccines, plasma and other blood fractions, all up more than $3 billion each from pre-pandemic levels.