US-China goods trade defies political tensions to reach new heights

Imports and Exports | | MIC Customs Solutions |

New figures show trade between the US and China reached a record high last year.

Goods trade between the US and China hit a record level in 2022, despite rising political tensions between the two nations that have included the continued imposition of tariffs and new export controls that have put pressure on importers and exporters.

Figures from the US Commerce Department revealed that total merchandise trade between the two countries rose to $690.6 billion last year, exceeding the previous record set back in 2018.

This was partly driven by merchandise exports from the US to China, which reached a new record of $153.8 billion. Meanwhile, the value of goods headed in the other direction increased to $536.8 billion - just shy of 2018's record.

William Reinsch, senior adviser at the Center for Strategic and International Studies think tank in Washington, told Bloomberg the figures indicate that consumers "have minds of their own" and have been able to avoid the political disputes between the US and Beijing, which have included disagreements over human rights and, more recently, this month's balloon spying incident.

"At the market level, we’re still doing a lot of business, despite the efforts of both governments. The macro relationship hasn’t changed that much; we’re still trading a lot," he added.

Among the measures put in place in recent months by the US are new export controls that will prevent shipments of hi-tech semiconductor technologies to China. Commentators have suggested this is a deliberate move by Washington to slow down Beijing's progress in this area, with some experts suggesting a lack of access to the latest devices could set the country's domestic semiconductor industry back by as much as a decade.

President Joe Biden's administration has also declined to remove a range of tariffs imposed by president Donald Trump, which include levies on chemicals, computer components and consumer goods.

Despite these headwinds, the figures showed that China remains the US' third-largest trading partner, accounting for 13 percent of total trade by value. Canada remained at the number one spot, at $793.8 billion (14.9 percent), followed by Mexico (14.7 percent, or $779.3 billion).