Caixin
Jun 10, 2020 08:47 PM
OPINION

PIIE: Tracking the China-U.S. Trade Deal

Chad Bown is a senior fellow at the Peterson Institute for International Economics in Washington. This article was first published on the PIIE’s website.

On Feb. 14, the Economic and Trade Agreement Between the United States of America and the People’s Republic Of China: Phase One went into effect. China agreed to expand purchases of certain U.S. goods and services by a combined $200 billion over 2020 and 2021 from 2017 levels.

This PIIE chart tracks China’s monthly purchases of U.S. goods covered by the deal, relying on data from both Chinese customs (China’s imports) and the U.S. Census Bureau (U.S. exports). It then compares those purchases with the legal agreement’s annual targets, prorated on a monthly basis, in two baseline scenarios (see methodology here).

As set out in the legal agreement, one 2017 baseline scenario allows for use of U.S. export statistics and the other allows for Chinese import statistics. Note that prorating the 2020 year-end targets to a monthly basis is for illustrative purposes only. Nothing in the text of the agreement indicates China must meet anything other than the year-end targets.

According to the agreement, China has committed to purchasing no less than an additional $63.9 billion of covered goods from the United States by the end of 2020, relative to these 2017 baselines. Defining the 2017 baseline using Chinese import statistics implies a 2020 purchase target of $172.7 billion. Defining the 2017 baseline using U.S. export statistics implies a 2020 target of $142.7 billion.

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The latest numbers

Through April 2020, China’s year-to-date total imports of covered products from the United States were $26 billion, compared with a prorated year-to-date target of $57.6 billion. Over the same period, U.S. exports to China of covered products were $20.4 billion, compared with a year-to-date target of $47.6 billion. Through the first four months of 2020, China’s purchases of all covered products were thus only at 43% (U.S. exports) or 45% (Chinese imports) of their year-to-date targets.

For covered agricultural products, China committed to an additional $12.5 billion of purchases in 2020 above 2017 levels, implying an annual target of $36.6 billion (Chinese imports, panel b) and $33.4 billion (U.S. exports, panel c). Through April 2020, China’s imports of covered agricultural products were $6.3 billion, compared with a year-to-date target of $12.2 billion. Over the same period, U.S. exports of covered agricultural products were $4.2 billion, compared with a year-to date target of $11.1 billion. Through the first four months of 2020, China’s purchases were thus only at 38% (U.S. exports) or 52% (Chinese imports) of their year-to-date targets.

For covered manufactured products, China committed to an additional $32.9 billion of purchases in 2020 above 2017 levels, implying an annual target of $110.8 billion (Chinese imports) and $83.1 billion (U.S. exports). Through April 2020, China’s imports of covered manufactured products were $19.4 billion, compared with a year-to-date target of $36.9 billion. Over the same period, U.S. exports of covered manufactured products were $15.4 billion, compared with a year-to-date target of $27.7 billion. Through the first four months of 2020, China’s purchases were thus only at 56% (U.S. exports) or 53% (Chinese imports) of their year-to-date targets.

For covered energy products, China committed to an additional $18.5 billion of purchases in 2020 above 2017 levels, implying an annual target of $25.3 billion (Chinese imports) and $26.1 billion (U.S. exports). Through April 2020, China’s imports of covered energy products were $231 million, compared with a year-to-date target of $8.4 billion. Over the same period, U.S. exports of covered energy products were $730 million, compared with a year-to-date target of $8.7 billion. Through the first four months of 2020, China’s purchases were thus only at 8% (U.S. exports) or 3% (Chinese imports) of their year-to-date targets.

For all uncovered products — which make up 30% of China’s total goods imports from the United States and 39% of U.S. total goods exports to China in 2017 — the phase one agreement does not include a legal target. Through April 2020, China’s imports of all uncovered products from the United States were $10.7 billion, 31% lower than over the same period in 2017. U.S. exports of all uncovered products to China were $10.2 billion, 29% lower than over the same period in 2017.

Though the agreement also sets targets for China’s purchases of certain traded services from the United States, those data are not reported on a monthly basis and are not covered here. The agreement also contains targets for 2021 not illustrated here.

Note on Data Release: This update is based on April 2020 data released on May 25 (Chinese imports) and June 4 (U.S. exports). The next update will be based on May 2020 data to be released on June 25 (Chinese imports) and July 2 (U.S. exports).

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