The U.S.' trade deficit with China widened to more than USD350 billion in 2021, showing that imposing extra tariffs on Chinese products and demanding companies to set up manufacturing bases in the U.S. did not have the desired effect, the Global Times reports. Amid the rising deficit, U.S. officials have in recent days stepped up accusations against China over the latter's implementation of the phase one trade agreement. However, such attacks are misdirected and baseless, analysts said, noting that the rise in the deficit is the result of the U.S.' own economic structure and that China has been overcoming various challenges to fulfill its commitment. According to the U.S. Department of Commerce, U.S. exports to China grew substantially by 21.4% year-on-year to USD151.1 billion in 2021. But due to massive imports from China, the U.S. trade deficit with China still increased to USD355.3 billion in 2021, compared with USD310.3 billion in 2020. According to Chinese customs the trade deficit was about USD396 billion in 2021. The trade deficit with China accounts for one-third of the total U.S. trade deficit of USD859.1 billion.
“The U.S. government has been mounting efforts to direct manufacturing back to the U.S., or at least out of China. So far, we can see that the efforts have been to no avail," Gao Lingyun, Expert at the Chinese Academy of Social Sciences (CASS), told the Global Times. The widening trade deficit between China and the U.S. does not run counter to the fact that China has been actively fulfilling its pledge under the phase one deal by purchasing U.S. products, especially in agriculture, experts and industry sources said, noting as proof the 21% increase in U.S. exports to China. For example, China's purchases of U.S. soybeans amounted to more than USD14 billion in 2021, almost on par with 2020 levels, Zhang Xiaoping, Country Director for China at the U.S. Soybean Export Council (USSEC), told the Global Times. China's imports of beef from the U.S. also expanded to 83,000 tons in the first eight months of 2021, nine times the amount in the same period a year earlier.
“China has not gone back on its promises in terms of sincerity or implementation of the trade deal,” Gao Lingyun said. "The two sides are discussing a plan that will benefit future implementation of the deal.” The U.S. has also not created a favorable environment for the implementation of the deal, as it imposed restrictions on various products and still charges tariffs, the Global Times reports.
China has called on the United States to remove existing tariffs and stop threatening new levies in response to missing the targets under the phase-one trade deal. According to the Peterson Institute for International Economics (PIIE), China bought only 57% of the additional USD200 billion worth of goods and services in 2020 and 2021, relative to 2017’s levels, the South China Morning Post adds.
