China and US trade

Freshman (College 1st year) ・Business ・MLA

The U.S. President's visit to China and trade agreements

The U.S. President's latest visit to China saw the two countries ink a number of trade agreements totaling $253.4 billion. The tour took place in the context of Trump's concerns about China's market barriers and trade surpluses. Last year, US market mismatches with China amounted to $347 billion, and Trump focused on narrowing the divide, with the subject at the heart of talks with his Chinese colleague. In response to Trump's concerns, Xi suggested that China is prepared to establish a more orderly, fair and competitive economy, even though previous regimes have struggled to deliver on those commitments. Notably, the two countries will partner on the Alaska and West Virginia gas projects which are valued at $43 and $83.7 billion respectively. The U.S. Commerce Department has anticipated that the Alaska project will create approximately 12,000 jobs, and therefore this is a massive Foreign Direct Investment (FDI) coming from China. Also, during the visit, which is the largest online retailer in China pledged to purchase American pork and beef valued at $1.2 billion as well as soybeans worth $3.4 billion. In addition to the above products, China also hopes to increase the importation of American cotton and other agricultural products signaling potential growth of global agricultural business in the coming days.

Significance of trade between China and the U.S.

Further, despite the major trade shortfall between the two countries, China is a major marketplace for goods coming from America. In fact, the goods shipped to China by American companies have increased by a whopping 77% from 2007 to 2016. The massive increase in U.S. exports signals the growth rate of global trade with the last decade. Trade experts have termed the trade deals made between China and the U.S., during Trump's visit, as a modest fulfillment of the various assurances made in the past by China.

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