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What’s the Difference? Comparing U.S. and Chinese Trade Data

CRS report via LC: What’s the Difference?—Comparing U.S. and Chinese Trade Data, May 20, 2020 – “The size of the U.S. bilateral trade deficit with the People’s Republic of China (China) has been and continues to be an important issue in bilateral trade relations. President Trump and some Members of Congress view the deficit as a sign of unfair economic policies in China.In the 116thCongress, the Fair Trade with China Enforcement Act (H.R. 704 and S. 2) and the United States Reciprocal Trade Act (H.R. 764) mention U.S. trade deficits as a reason for the proposed legislation. The escalation of the Sino-U.S. trade tensions and both sides’ imposition of tariffs on one anothers’ trades since spring 2018 contributed to a significant decline in bilateral merchandise trade in 2019, and the corresponding merchandise trade balance. According to the U.S. International Trade Commission, the 2019bilateral merchandise trade deficit with China was $345.6billion, down from $419.2 billion in 2018. According to China’s General Administration of Customs, China’s trade surplus with the United States in 2019 was $295.5 billion, a decline of $27.9 billion from 2018. The difference between the officially reported trade balances of the two nations was less than $55 billion for the first time in 20 years.

This report examines the differences in the trade data reported by the Chinese and U.S. governments in two ways. First, it compares the trade figures using the Harmonized Commodity Description and Coding System (Harmonized System)to discern any patterns in the discrepancies between the U.S. and Chinese data. This comparison reveals that 96% of the difference in the value of China’s exports to the United States in 2019arises primarily from differences in the reported values for four types of goods. Those four types of goods, in order of the size of the discrepancy, were electrical machinery, toys and sporting goods, machinery, and footwear; all four have been major sources of the discrepancy for over a decade..”

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