By David Lawder
WASHINGTON (Reuters) – U.S. goods exports to China fell in December, cementing a massive shortfall in Beijing’s two-year purchase commitments under the “Phase 1” trade deal negotiated by former President Donald Trump’s administration.
The U.S. Census Bureau said on Tuesday that the United States’ 2021 goods trade deficit with China rose by $45 billion, or 14.5%, to $355.3 billion, the largest since a 2018 record of $418.2 billion.
The 2020 gap was $310.3 billion, a 10-year low driven by coronavirus pandemic lockdowns.
The data showed that China missed by far its commitments to purchase an additional $200 billion worth of U.S. farm and manufactured goods, energy and services above 2017 levels, before a bitter trade war embroiled the world’s two largest economies.
The purchase commitments were the centerpiece of Trump’s Phase 1 trade deal with China, which launched in mid-February 2020 and halted a threatened escalation of tariffs. The deal also called for China to grant increased U.S. market access to its agricultural biotechnology and financial services sectors and mandated some intellectual property protection improvements.
An analysis of final 2021 Census trade data compiled by economist Chad Bown of the Peterson Institute for International Economics showed that China met just 57% of its full two-year goods and services targets.
Beijing’s purchases of the goods, energy and services targeted in the Phase 1 agreement were not even enough to return to China’s baseline 2017 level of U.S. purchases U.S. imports after retaliatory tariffs had eroded them in 2018 and 2019, he said.
“Put differently, China bought none of the additional $200 billion of exports Trump’s deal had promised,” Bown said in his analysis.
China exceeded the 2017 baseline in agricultural purchases, but only reached 83% of the $73.9 billion two-year farm goods target, Bown’s analysis showed.
U.S. imports from China in 2021 jumped by $71.6 billion over 2020, or 16.4%, to $506.4 billion, their highest since 2018. Exports to China in 2021 increased by $26.6 billion, or 21.3%, to a record $151.1 billion.
The global U.S. trade deficit in 2021 surged 27% to a record $859.1 billion as American businesses restocked inventories to meet robust demand .
U.S. exports to China fell to $13.4 billion in December from $14.5 billion a year earlier and $16.1 billion in November.
Deputy U.S. Trade Representative Sarah Bianchi said last week that it was “really clear that the Chinese haven’t met their commitment in Phase 1” and the Biden administration was working with Chinese officials to address the matter.
U.S. officials also told Reuters early on Monday that they were losing patience over China’s failure to close the shortfall in its purchase commitments.
(Reporting by David Lawder; Editing by Andrea Ricci and Marguerita Choy)