Warmer U.S.-China trade relations could help U.S. exporters
Warmer U.S.-China trade relations could help U.S. exporters
Commerce Secretary Gina Raimondo is visiting China this week, the third high-ranking official from the Biden administration to do so this summer. The Commerce Department has been restricting American exports of advanced technology to China because of national security concerns. But Secretary Raimondo said the vast majority of U.S.-China trade has nothing to do with national security.
In fact, other American exports stand to benefit if trade relations improve.
The U.S. exports a lot of machinery to China, as well as liquified natural gas. And one of the biggest American exports of all is agricultural products.
“They’re a big market for our dairy markets, our hog markets, our beef markets, and corn markets as well,” said Naomi Blohm, senior market advisor at Total Farm Marketing.
Blohm said China has been importing fewer of those products this year, in part because of the chilly trade relations.
And for certain exports, like corn, the U.S. has lost export share to competitors, including Brazil.
“They’re able to price things a little bit cheaper,” said Blohm. “And China is going there for the bulk of the business right now.”
All of those markets could benefit from improved trade relations.
But Eswar Prasad, a professor of trade policy at Cornell, said U.S. exports also depend on the Chinese economy which, right now, is weak.
“Chinese businesses are investing less, Chinese consumers are purchasing less,” he said.
Prasad said better trade relations could help China’s economy. And, therefore, American exports.
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