US-China trade relationship not as one sided as it appears

Trade tensions between the US and China have continued to ratchet-up over the last week. While the exemptions to technology exports from China to the US offers some (potentially temporary) respite, the high tariffs of other goods are likely to hit both economies hard.

At face value the US has a stronger position going into the trade war. The US imports $433.74bn of goods from China, accounting for 13.6% of China’s total exports, compared to $178.69bn of Chinese imports from the US accounting for 8.8% of the US’s global exports.

However, China’s dominance in the export of many of the goods that the US imports will create more headaches for US importers. And even if the US can find other suppliers, in most cases, it only accounts for a small share of global demand so China is likely to find other destinations where it can ship its goods.

Chart 1: There are many goods for which China accounts for 50% of global exports