US-China Trade Balance and Import Export Growth

Gloria Van Rees

More news this week regarding potential trade talks between the US and China following announcement by the Trump administration of more potential tariffs on Chinese products. Taking a fresh look at import/export YoY growth on trade between the US and China in the figure below values of import and exports are flat in recent months. The last time either saw significant movement was the early part of 2018. Export values increased to 26% growth then decreased to 14-13% growth where it has stayed ever since. Import values had a strong January also hitting 26% in growth, to decline to 11-12% growth. The flat growth numbers show a trading momentum, but a hesitancy to blink first as the trade war develops further.

The trade balance however is increasing steadily. The YTD low was 15 billion dollars in March 2018, but has grown to 31 billion as of August 2018. The only other time that the trade balance was below 20 was February 2017, which saw a decrease to 10 billion. It is worth noting that the trade balance of 31 billion is the highest it has been in 36 months. Import/export growth maybe flat, but trading is going on. This could be leverage for either side on upcoming trade talks.