China is Washington’s biggest trading partner-with trade in goods and services around $660 billion in 2016. The U.S. imports around four times more than China does, but trade data can be misleading as U.S. companies increasingly rely on global supply chains that include China.
CGTN’s Karina Huber reports.
Trade data between China and US shows deep complexityIn the United States, it’s hard to find a product that doesn’t say “Made in China.” The U.S. imported more than $460 billion worth of Chinese goods and services in 2016.
In the United States, it’s hard to find a product that doesn’t say “Made in China.” The U.S. imported more than $460 billion worth of Chinese goods and services in 2016.
According to U.S. trade figures, the top import category is electrical machinery, followed by machinery, furniture and bedding, toys and sports equipment and footwear.
The majority of smartphones are sourced in China as are the bulk of laptops. Imports from China have enabled U.S. consumers to buy more products at lower cost. They’ve also helped some U.S. companies.
Apple’s iPhone relies on Foxconn in China to assemble its products, but its components are sourced from all around the world and its devices are designed and sold in the United States. It’s a prime example of modern global trade.
“In the end, the U.S. accounts for the majority of the value of a product like the iPhone and the cell phone, while China captures less than five percent. We’re no longer capturing the value added along the supply chain and in that way a ‘Made in China’. ‘Made in the United States’ no longer holds the same meaning,”Cathleen Cimino-Isaacs, research associate at Peterson Institute for Int’l Economics said.
The U.S. trade deficit with China hit $347 billion last year. U.S. President Donald Trump sees an imbalance and has vowed to impose tariffs on Chinese imports. But experts say tariffs could trigger a trade war and ultimately hurt the U.S. economy.
“Corporations, bigger ones – Walmart, Apple, Microsoft – they would all get hit if there were a large trade war and it would certainly affect U.S. consumers as well as U.S. businesses?and it could actually be detrimental to the U.S. economy in the long run even though from the President’s perspective it would actually shore up employment in the short term,” Ankur Patel, Former Chief Investment Officer at R-Squared Macro said.
Many experts say it’s wise to take the long view in China-U.S. trade at a time when businesses are increasingly interdependent.