U.S-China Trade Booms

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  • U.S.-China trade booms as if virus, tariffs never happened

  • the boom looks set to continue, with China purchasing millions of tons of U.S. farm goods for this year

China and the U.S. are shipping goods to each other at the briskest pace in years, making the world’s largest bilateral trade relationship look as if the protracted tariff war and pandemic never happened says an article on Yahoo Finance.

U.S. trade deficit

Eighteen months after the Trump administration signed the trade deal, the agreement has turned out to be a truce at best. The U.S. trade deficit hasn’t shrunk, most levies are still in place, and it hasn’t led to negotiations over other economic issues.

And yet, bilateral trade in goods is an area of stability in a relationship that has otherwise continued to deteriorate, with rising tension over Hong Kong, Taiwan, human rights, the origins of the Covid-19 pandemic, accusations of computer hacking, and many other flashpoints.

Monthly trade booms

Monthly two-way trade, which tumbled to $19 billion in February of last year amid shutdowns in Chinese factories, rebounded over the past year to new records, according to official Chinese data. And that boom looks set to continue, with China purchasing millions of tons of U.S. farm goods for this year and next and stuck-at-home U.S. consumers still shopping and importing in record amounts.

While the U.S. government’s numbers differ somewhat, the bustling trade has defied all expectations that the tariffs on hundreds of billions of dollars worth of merchandise would force decoupling of supply chains. Instead, both sides have learned to live with the taxes, with Chinese firms buying more to fulfill the terms of the 2020 trade deal, and U.S. companies purchasing goods they can’t get elsewhere to meet elevated household demand fueled in part by trillions of dollars in government stimulus.

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Source: Yahoo Finance