Title: The US-China Economic Relationship | US-China Business Council
Headings: The US-China Economic Relationship
The US-China Economic Relationship
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Content: The US-China Economic Relationship | US-China Business Council
The US-China Economic Relationship
The US has benefited from trade and investment flows with China. The combination of bilateral trade, investment, and supply chain integration has supported economic growth, consumer choice, and job creation. In 2019, exports to China supported 1.2 million jobs in the US and as of 2018, 197,000 people in the US were directly employed by Chinese multinational firms. US companies invested $105 billion in China in 2019, and the profits from these investments and the contribution they make to the competitiveness of US businesses help support the US economy through R&D, domestic investment, and dividend payments. With China forecast to drive around one-third of global growth over the next decade, maintaining market access to China is increasingly essential for US businesses’ global success. The trade war with China hurt the US economy and failed to achieve major policy goals outlined by the Trump administration. Rather than benefiting the economy, it has reduced US economic growth and employment, resulting in an estimated peak loss of 245,000 jobs. Tariff rates remain at a multi-decade high despite both countries reaching a phase one trade agreement in early 2020. While the agreement made important progress on longstanding trade barriers in agriculture, financial services, and intellectual property protection, it failed to address a range of administration concerns over Chinese state-owned enterprise disciplines, distorting subsidies, data and cybersecurity, and other areas of market access. While the trade deficit with China did narrow in 2019, this was offset by an increased trade deficit with the rest of the world, leaving the overall US trade deficit broadly unchanged.