What US-China trade war means for imports, exports and soybeans


The flags of the U.S. and China.

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The U.S. and China are entangled in a trade war, and that’s hurting business and economic activity worldwide. One year on, a resolution is still nowhere in sight.

In a poll conducted by Reuters, around 80% of more than 60 economists responding said they expect the U.S.-China trade fight to either worsen or stay the same by the end of 2020. The two countries share $660 billion in trade between them in 2018, according to the U.S. Census Bureau, and here are four charts that show big ways that commerce is changing.

Rising tariffs

Slowing US-China trade

The United States and China were each other’s top trading partner in 2018, but Mexico and Canada surpassed China to become the top two U.S. partners this year.

“China’s been much more successful at curtailing its imports from the U.S. than the U.S. has been in curtailing imports from China,” said Eric Fishwick, CLSA’s chief economist told CNBC’s “Street Signs.”

“Trade both ways, though, has slowed faster than for example China’s trade with Europe,” he added. “So, the trade wars are definitely having an impact.”

US trade deficit with China

The U.S. runs the largest trade deficit with China — a point that President Donald Trump has used to justify tariffs in the first place.

A large portion of America’s net imports — products that the U.S. buys from China more than it sells to China — are “high margin finished goods,” said Don Steinbrugge, founder of hedge fund consulting firm Agecroft Partners.

U.S. net exports to China are largely “low margin commodities,” such as crops, oil, gas and forestry products, he said.

US soybean exports to China

Soybeans are one of the main products the U.S. sells to China. And now they’re in the crossfire.

Farmers are among the largest supporters of Trump. And China, the world’s largest buyer of several agriculture products including soybeans, has used reduced purchases of some farm products in an attempt to punish American farmers and put pressure on the U.S. president.

In the middle of last year, China almost entirely stopped importing soybeans from the U.S. as demand plunged due to a shrinking pig herd from an outbreak of African swine fever. Soybeans are used as animal feed in China.

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