The theory of trade decoupling between China and the United States has always been popular, but is it really decoupling? Is there any data to support it? This article answers this question from the data of the United States' merchandise imports over the years.
U.S. imports of goods to Mexico have grown rapidly, outpacing imports of goods from China
According to the latest data released on the website of the U.S. Department of Commerce, the value of U.S. imports from Mexico in 2023 will reach $475.6 billion, surpassing the value of imports from China by $427.2 billion, and Mexico has surpassed China to become the largest source of U.S. goods imports. The last time Mexico overtook China was in 2002, 21 years ago.
Mexico surpassed China to become the largest importer of U.S. goods because U.S. imports of goods from China fell sharply in 2023, from $537 billion in 2022 to $427.2 billion in 2023, a drop of 20.4%. The value of U.S. imports from Mexico increased by 2.7% to $475.6 billion from $463.2 billion in 2022.
It can be seen that since 2021, the United States' merchandise imports from Mexico have increased significantly, from only $328.9 billion in 2020 to $388.8 billion in 2021, and continue to grow significantly to $463.2 billion in 2022, and from 2020 to 2023, the cumulative growth of U.S. merchandise imports from Mexico has reached about 45%. The growth is very fast.
The fact that Mexico-US trade exceeds US-China trade does reflect the US efforts to promote trade decoupling with China, reduce dependence on Chinese commodity imports, and actively seek out trading partners that can replace China.
"Trump's Sino-US trade war + Biden's trade decoupling" has led to a decline in Sino-US trade.
In 2023, the United States will only import $427.2 billion of goods from China, which is only equivalent to the level of 2012, and Sino-US trade has fallen to the level of 10 years ago. U.S. imports of Chinese goods fell off a cliff after the 2018 trade war, and although they recovered significantly in 2021-2022, they fell sharply again in 2023.
The decline in trade will have a significant impact on China's related commodity export industries, and the sluggish external demand and deflation in 2023 are largely related to the decline in Sino-US trade.
The current import trade of the United States is divided into countries
The three countries with the highest U.S. merchandise imports in 2023 are Mexico, China, and Canada, all of which are relatively close to each other in terms of trade of more than $400 billion. The reason why the United States imports from Mexico and Canada is very high is because Mexico and Canada are neighbors of the United States, and with the blessing of the North American Free Trade Area, the trade is naturally very high.
In fourth to eighth place are Germany, Japan, South Korea, Vietnam, and Taiwan, all of which are typical manufacturing economies that can also provide cheap imports to the United States. It can be found that the total imports of goods from Germany, Japan, South Korea, and Vietnam to the United States have surpassed China's, which means that the sum of these four countries is enough to match China.
In terms of proportion, the United States' imports of goods from China will account for 13.9% of the total U.S. imports in 2023, lower than the 15.4% of the U.S. imports from Mexico, Canada will account for 13.7%, Germany will account for 5.2%, Japan will account for 4.8%, South Korea will account for 3.8%, and Vietnam will account for 3.7%.
In 2023, among the year-on-year growth in the value of U.S. imports from various countries, China will drop by as much as 20.4%
In 2023, U.S. merchandise imports will decline by 5.8%, but U.S. merchandise imports from Germany will increase by 8.2%, imports from the European Union will increase by 3.5%, imports from Mexico will increase by 2.7%, and imports from Japan, South Korea, France, the United Kingdom, and India will all decline by less than 2%, which is a small decline.
U.S. merchandise imports from China fell sharply by 20.4% in 2023, the highest decline among major countries, higher than Vietnam's 10.2%, Canada's 5.6%, Taiwan's 4.3%, and Thailand's 3.9%.
It can be seen that no matter how you compare, the sharp decline in Sino-US trade in 2023 is extremely abnormal. It fully shows that the Biden administration is actively promoting trade decoupling with China. Biden has been strengthening trade cooperation with Mexico and the European Union, and reducing trade cooperation with China.
The growth of Sino-US trade has encountered a bottleneck, which means that China's manufacturing industry has encountered a bottleneck in the mode of relying on export growth, and needs to continue to upgrade, from the past cost, price, and quality advantages to scientific and technological advantages, and reshape export competitiveness.