Economics and Trade Bulletin November 2, 2018
U.S.-China Economic and Security Review Commission2
Bilateral Trade
U.S. Goods Deficit with China Rises More than Expected
In the third quarter of 2018, the U.S. goods trade deficit with China reached $115.6 billion, an increase of 12 percent
over the third quarter of 2017 (see Figure 1). U.S. exports fell 7.6 percent year-on-year to $29.3 billion, and imports
from China totaled $145 billion, up 7.5 percent year-on-year.
September 2018 saw U.S. imports from China reach a record-setting $50 billion, as traders rushed to bring in
imports ahead of a new wave of tariffs. (The United States has threatened to impose additional tariffs on Chinese
goods in 2019; about $250 billion worth of Chinese are already subject to 10 percent to 25 percent U.S. tariffs.)
Figure 1: U.S. Goods Trade with China in the Third Quarter, 2012–2018
Source: U.S. Census Bureau, Trade in Goods with China, November 2, 2018. census.gov/foreign-trade/balance/c5700.html.
Top Five U.S. Exports to and Imports from China
Although U.S. exports to China saw an overall decline in Q3 2018, some export categories had a strong showing
(see Table 1). Exports of machinery (except electrical) came in at nearly $3 billion, up 36.7 percent year-on-year,
while exports of chemicals rose 23 percent to $4.2 billion. Exports of agricultural products to China, traditionally a
major category, were valued only $456 million in Q3 2018, down 82 percent from $2.5 billion in Q3 2017. Based
on 2017 export data, China’s tariffs affect 95 percent of all U.S. agricultural and agricultural-related exports to
China.1
Imports from China, on the other hand, increased across all top five product categories, with electrical equipment,
appliances, and component category recording a 13.5 percent increase year-on-year to $13.5 billion. In keeping
with established patterns, computer and electronic products dominate U.S. imports from China, accounting for $49.5
billion in Q3 2018, or 34 percent of U.S. overall imports.
-$120
-$70
-$20
$30
$80
$130
Q3 2012Q3 2013Q3 2014Q3 2015Q3 2016Q3 2017Q3 2018US
$ b
illi
on
s
ExportsImportsDeficit
Economics and Trade Bulletin November 2, 2018
U.S.-China Economic and Security Review Commission3
Table 1: U.S. Goods Trade with China: Top Five Exports and Imports
(US$ billions)
Source: U.S. Census Bureau, USA Trade Online, November 2, 2018. https://usatrade.census.gov/
Advanced Technology Product Trade
U.S.-China trade in advanced technology products (ATP) continues to be characterized by a sizable U.S. deficit,
which reached $98.7 billion in the first nine months of 2018, up 7.3 percent year-on-year (see Table 2). The main
contributor to the deficit was imports of information and communications technology (ICT) products, which rose
7.7 percent year-on-year to $114.9 billion through September 2018. The largest U.S. ATP export to China,
aerospace products, grew 12.1 percent year-on-year to $12.7 billion.
Table 2: U.S.-China ATP Trade, Cumulative January–September
(US$ millions)
Source: U.S. Census Bureau, November 2018. census.gov/foreign-trade/statistics/product/atp/select-ctryatp.html.
U.S. Services Trade Surplus with China Reaches Record High in H1 2018
In H1 2018, the U.S. services surplus with China reached a new record of $20.5 billion, a 3.7 percent increase year-
on-year.2 In the first two quarters of 2018, services accounted for 28.5 percent of all U.S. exports to China.3
U.S. services exports to China were $29.8 billion in H1 2018, a 6.1 percent increase year-on-year.4 Exports of travel,
which include Chinese students coming to the United States to study,* dominate U.S. services trade with China,
accounting for $16.8 billion, or 56.2 percent of total U.S. services exports to China in H1 2018 (see Figure 2).5 U.S.
* The U.S. government classifies tuition payments as tourism and travel exports. For more on Chinese tourism in the United States, see Matt
Snyder, “Chinese Tourism and Hospitality Investment in the United States,” U.S.-China Economic and Security Review Commission, July
25, 2016. https://go.usa.gov/xPVjF.
U.S. Top-Five Exports to ChinaU.S. Top-Five Imports from China
Quarter 3 (Jul-Sep'18)
Exports
(US$ billions)
Share of
total (%)
Change over
Q3'17 (%)Quarter 3 (Jul-Sep'18)
Imports
(US$ billions)
Share of
total (%)
Change over
Q3'17 (%)
Transportation Equipment$7.9827.2%-8.0%Computer and Electronic Products$49.4734.1%3.9%
Computer and Electronic
Products
$4.5715.6%4.6%Electrical Equipment, Appliances,
and Component
$13.479.3%13.5%
Chemicals$4.2014.3%23.0%Misc. Manufactured Commodities$13.139.1%6.6%
Machinery, Except Electrical$2.9710.1%36.7%Apparel and Accessories$9.846.8%2.2%
Oil and Gas$1.254.3%-9.6%Machinery, Except Electrical$9.396.5%5.7%
Other$8.3728.5%-10.5%Other$49.7034.3%11.6%
Total$29.35100.0%Total$144.99100.0%
Balance
ExportsImportsBalanceExportsImportsBalanceYOY
(01) Biotechnology712 205507708 144564-10.1%
(02) Life Science2,9292,0059242,6681,94672228.0%
(03) Opto-Electronics576 3,263-2,687440 3,378-2,938-8.5%
(04) Information & Communications2,991114,857 -111,8663,428106,604 -103,1768.4%
(05) Electronics4,8024,1586444,3943,2911,103-41.6%
(06) Flexible Manufacturing3,2181,0982,1202,1329771,15583.5%
(07) Advanced Materials209 335-126207 303-9631.3%
(08) Aerospace12,699 85911,84011,325 76610,55912.1%
(09) Weapons397-94292-904.4%
(10) Nuclear Technology675116213 8205-92.2%
TOTAL28,208 126,926 -98,71825,516 117,510 -91,9947.3%
20182017
Economics and Trade Bulletin November 2, 2018
U.S.-China Economic and Security Review Commission4
exports of intellectual property (IP) charges, the second-largest category, grew 5.4 percent year-on-year to reach
$4.4 billion; exports of transport, the third-largest category, totaled $2.6 billion, a 5.9 percent increase.6
Unlike U.S.-China goods trade, which is being battered by rising bilateral tensions and multiple rounds of tariffs,
the services trade remains a bright spot. Chinese consumers’ appetite for travel has been rising along with their
incomes: according to World Bank data, in 2016 (latest available) there were over 135 million Chinese tourist
departures, up from only 10.5 million in 2000.7 Cutting off the flow of Chinese tourists is a powerful weapon in the
Chinese government’s arsenal, but there is no evidence of official action to clamp down on Chinese tourist visits to
the United States. China’s government has wielded this weapon in other cases of heated political or economic
friction. Most recently, in 2017 China retaliated against South Korea’s decision to deploy a U.S. antimissile battery
by curtailing Chinese group tours to South Korea, among other actions.*
Figure 2: U.S. Services Exports to China, H1 2014–H1 2018
Source: U.S. Bureau of Economic Analysis, U.S. International Transaction, Expanded Detail by Area and Country, September 19, 2018.
U.S. imports of Chinese services grew 11.6 percent year-on-year to reach $9.4 billion in H1 2018.8 Transportation,
travel (including for education), and other business services accounted for 80 percent of all U.S. services imports
from China (see Figure 3).9 However, imports of smaller services categories saw the highest year-on-year growth
in H1 2018: insurance services (55.7 percent), financial services (25.5 percent), and charges for the use of IP (28.9
percent).10
* For additional details on this case, see Ethan Meick and Nargiza Salidjanova, “China’s Response to U.S.-South Korean Missile Defense
System Deployment and its Implications,” U.S.-China Economic and Security Review Commission, July 26, 2017.
https://go.usa.gov/xPVjM.26101418
H1 2014H1 2015H1 2016H1 2017H1 2018
US
$ b
illi
on
s
Travel (incl. education)Charges for the use of IP
TransportAll other。