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China to be importing more American goods

Restrictions have led to Chinese citizens traveling abroad to purchase foreign products so they can avoid paying expensive tariffs.

SUMMARY

As of May 21, Beijing announced that it would be purchasing additional American imports in the coming years after both the United States and China decided to “halt” the trade war — a conflict US President Donald Trump claims was sparked primarily by the large American deficit in their trade relationship. On May 18, Chinese officials offered to up their current American imports by $200 billion, a significant dent in the what was a $376 billion deficit in 2017. The trade deficit is largely a bi-product of many of the existing import restrictions left over from 10 years ago when China initially joined the World Trade Organization (WTO) and critics claim it’s outdated. At the time, the country’s highest priority was to increase economic growth, not consumption. Today, these restrictions have led to Chinese citizens traveling abroad to purchase foreign products so they can avoid paying expensive tariffs. 

FAO GLOBAL ASSESSMENT
An increase in exports to China is likely to result in a small reprieve for firms struggling amidst the recent trade dispute. Firms specializing in agricultural products, machinery, and fuel sources can take advantage of this opportunity by preparing export logistics and should consider adopting Chinese online payment systems like Alipay so they can be in the best position possible should China move forward with this proposal. However, on-going tit-for-tat trade negotiations between the U.S. and China have hit many of these sectors creating temporary disruptions.

Related Links

  1. Chicago Tribune — Economic talks between US and China lead to trade war truce
  2. 21世纪经济报道 – 扩大进口是供给侧结构性改革的重要内容
  3. The Washington Post — China offers to buy more American products, Kudlow says 
  4. Reuters — US commodity exports to China to rise amid trade talks, but volumes are capped

Analyst Bio

Adriana Ray - Asia Policy Analyst

Adriana Ray is an Asia Policy Analyst at FAO Global where she researches and writes on Economic, Security, and Political issues in the region. Adriana speaks Mandarin Chinese and is very active in policy research and analysis. Adriana is currently a graduate student at Georgetown University’s School of Foreign Service where she is pursuing a Masters in International Security. She is also an alum of Tsinghua University and Furman University.

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