AAM Statement: U.S. Trade with China Remains Woefully Lopsided as the “Phase 1” Trade Deal Continues to Disappoint

Washington, D.C. – The U.S. goods trade deficit with China reached $355.3 billion in 2021, according to data released on Tuesday by the Commerce Department. While the United States managed to export $151.1 billion worth of goods to China in 2021, that figure is still 40% below the $253.7 billion that China pledged to import last year as part of the “Phase 1” trade deal. 

Alliance for American Manufacturing President Scott Paul said:

“The results of the much-hyped Phase 1 trade deal with China are officially in — and, my, are they disappointing.

“Commodity purchases were never the solution to fixing the lopsided U.S.-China trade relationship, and China’s government couldn’t even keep those promises. Anyone who has followed U.S.-China trade closely over the past 20 years can tell you that until the fundamental issues are addressed — things like China’s state-owned enterprises, massive government subsidies, intellectual property theft, lax labor and environmental laws — the massive trade gap will remain.

“But China’s failure to live up to its promises shows just how important it is that the United States no longer wait on China to change. It’s time to implement a robust industrial policy to ensure American manufacturers and workers can thrive.

“We can start by investing in our own capabilities and re-shoring critical manufacturing. That includes rebuilding our infrastructure and building out clean energy, electric vehicle and advanced technology production and related supply chains. Strong Buy America preferences for government purchases will reinvest taxpayer dollars back into our own workers and companies, helping to boost this production.

“Equally as important is trade enforcement. Tariffs on China must remain in place; now isn’t the time to remove them or widen exclusions. We need to sharpen and deploy new tools to defend against China’s litany of unfair trade practices. Proper enforcement of the Uyghur Forced Labor Prevention Act is also vital — the United States must do all it can to prevent goods made with forced labor from entering our market.

“Twenty years of lopsided trade and two years of a failed trade deal should provide all the lessons we need. It’s time to pivot to a new strategy that will allow the United States to compete and win in the 21st century.”

Scott Paul previously wrote about what is needed to implement a successful trade strategy with China. You can find that here.