Shrinking Trade Between the U.S., China, and the Rest of the World

The total value of goods traded between the United States, China, and the rest of the world remained depressed in November 2024.

That trend was most evident in the numbers for trade between the U.S. and China. Here, we find that while the year-over-year value of goods exchanged between the two nations in November 2024 was nominally positive, thanks largely to U.S. soybean exports that peak during the fourth quarter of each year, the trailing twelve month average that smooths out seasonal variation was barely changed.

Consequently, the gap between the trailing twelve month average and a counterfactual based on how trade between the U.S. and China recovered following the 2008-09 Great Recession increased to its largest value on record in November 2024.

As the following chart reveals, after the post-Coronavirus Pandemic trade recovery began in September 2020, the difference between the counterfactual and the trailing twelve month average was small up through October 2022, when the Biden-Harris administration imposed severe anti-free trade measures against China. Through November 2024, we estimate the cumulative loss of trade between the U.S. and China has surpassed $311 billion.

The Biden-Harris administration’s anti-free trade measures were not limited to China. The next chart shows how trade between the U.S. and world, both with and without trade with China, was also diminished after the administration imposed trade restrictions in January 2023.

Here, we estimate the cumulative loss of trade with respect to a straight-line projection of how trade between the U.S. and the world excluding China (shown by the light blue data series) was growing from October 2022 to February 2023. The cumulative loss of trade between the U.S. and the world excluding China since January 2023 totals nearly $563 billion, with November 2024 posting a gap of $35 billion.

As the Biden-Harris administration reaches its end, it’s worth tallying up the extent to which it impaired global trade. Especially since the administration will impose further export restrictions on China and other nations before it finally leaves office on 20 January 2025.

References

U.S. Census Bureau. Trade in Goods with China. Last updated: 5 January 2025.

U.S. Census Bureau. Trade in Goods with World, Not Seasonally Adjusted. Last updated: 5 January 2025.

Image credit: Photo of a large cargo ship by Chris Linnett on Unsplash.