US-China trade deficit hits record high in 2013
The US-China trade deficit for 2013 hit a record high, as both export and import totals increased, according to the US Department of Commerce.
Exports for the year totaled $122 billion and imports totaled $440.4 billion, up from $110.5 billion and $425.6 billion in 2012, respectively, according to the figures released on Thursday. Exports increased primarily in civilian aircraft, engines, and equipment, and imports increased primarily in cell phones and household goods.
Last year the goods deficit with China, with whom the US has had the largest trading deficit every year since 2000, increased to $318.4 billion from $315.1 billion in 2012.
The US exported $13.1 billion to China in December, a drop from $13.2 billion in November. It imported $37.6 billion in December, down from $40.1 billion in November.
US Senator Max Baucus, approved on Thursday by the Senate to be the US ambassador to China, said at his confirmation hearing last week that in his new post he would prioritize bilateral trade.
“I have become a firm believer that a strong geopolitical relationship can be born out of a strong economic relationship, which often begins with trade,” Baucus said. Testifying before the Senate Foreign Relations Committee, he also said that he would work on building a “more equitable economic relationship between our two countries.” The bilateral relationship is “the most important in the world” and both countries need to “get it right,” he said.
Baucus, who was chairman of the Senate Finance Committee, which oversees foreign trade policy, has backed Beijing’s entry into the World Trade Organization and has supported normalized trade relations with China.
In the last three decades, US-China trade has surged to $562 billion in 2013 from $5 billion in 1981, according to the Congressional Research Service. But the US’s trade deficit with China has been “significantly larger” than that with any other country, and critics of US-China trade have accused China of undervaluing its currency in order to gain unfair trade advantages and that China’s subsidies for state-owned entities were obstacles to free trade.
US trade suffered from weaker exports in December, leading to a wider trade deficit. Total exports for December dropped by 1.8 percent to $191.3 billion and imports totaled $230 billion, with a deficit of $38.7 billion, which is up from $34.6 billion in November.
Exports for the year increased to $2.3 trillion, a record high, up from $2.2 trillion in 2012. Imports decreased from $2.745 trillion in 2012 to $2.744 trillion in 2013. The trade deficit for 2013 was $471.5 billion, a four-year low, bolstered by lessening demand of foreign oil and stronger US exports of petroleum oil.
The US also hit a record trade deficit with the European Union in 2013 at $125.1 billion, up from $115.8 billion in 2012. With Japan, the US goods deficit narrowed to $73.4, a 4 percent drop.