Global Economic Trends: US Overtaken by China as a Global Trade Power

Back in 2018, with an eye toward protecting the domestic market from imports, improving the US trade balance, and creating jobs in manufacturing, US President Trump engaged in a so called ‘trade war’ with China, the country with the largest trade surplus with the United States, although it arguably originated with a much broader list of targets given that steel and aluminum were at the center of the new tariff rates.

Nearly three years, one global health pandemic, and a lost election later, President Trump’s economic pressure on China has not brought the US closer to the expected trade goals. To the contrary, the dominance of the US trade paradigm may have shifted in China’s favor in a way that will realign global trade flows for years to come, especially in light of China’s relatively rapid recovery from corona-crisis that stands to strengthen China’s global trade position.

• In 2000, only 32 countries had a total trade in goods turnover with China in excess of their total trade with the United States. On the other end of the spectrum was the United States, which boasted larger bilateral trade turnovers than China with more than 160 countries.
• Fast forward to 20 years and China has totally changed global trade patterns. China’s total bilateral trade turnover exceeds that of the United States in 130 countries, while the US surpasses China in only 58 countries.
• Among the world’s largest economies only France, the United Kingdom, Mexico, and Canada now trade more with the United States than with China, and the US advantage over China in India is at the level of statistical error.

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