China Vs Us Trade Patterns Essay

1. Introduction

The following paper coherently illustrates the trade patterns of USA and China and describes the various trade policies developed over the past years that have impacted the respective economies of both countries alongside the effect of the same on the bilateral trade relations between the two. Based upon the previous statistics, US-China trade is considerably one of the largest trading partners in today’s economies. Both countries’ trade relations entail exchange of investment, services as well as goods varying from agricultural products to non-agricultural products. Currently, China is the second-largest trading partner, third-largest export market and the biggest source of imports for the United States. The U.S. government’s

According to U.S., China’s unfinished ‘transition to a free market economy’ is the root cause for many trade tensions. While China has liberalized its trade governance over the last thirty years, it continues to maintain a couple of state-supervised policies that apparently distort investment flows (Morrison, 2015). The primary purpose of this paper is to reflect the trade patterns of the two countries- USA and China and illustrate various trade policies practiced by them. It also shows evidence that supports the argument that trade policies play a significant role in determining a country’s trade performances and balance of payments. It is important to study the impact of policies so that the main areas of issues in the economy can be understood and the imbalances in trade can be thoroughly checked by the government by following protectionist

An unfalteringly rising bilateral trade deficit resulting from the quintupled value of U.S. exports to China that is stunted by the surge of imports from China into the U.S. The major source of the expanded deficit – increasing imports of computers and electronic commodities from China and U.S. exports of China shifted from electronic products to fully manufactured products. While the relative share of U.S. machinery exports to China dropped slightly from 2000 to 2011, machinery exports jumped from around $6.5 billion in 2009 to $10.7 billion in 2011 (Casey, 2012).

2. The levels of non-manufactured goods, particularly agricultural products exported by U.S. producers to China, rose dramatically to an extent that it led to a U.S. trade surplus with China. The largest increases were in agricultural products, motor vehicles and semiconductor manufacturing equipment. Exports from the U.S. to China of oil, gas and minerals were reported to be around $105 million (USD) in 2000 and $2.1 billion USD in 2010 (Casey,