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February 20, 2021

U.S. and China: 2020 Trade Recap

The Phase One trade agreement between the U.S. and China signed in January of last year called for $36.5 billion in purchases of agricultural products by China in 2020. This goal, specified in dollars, was already ambitious given the low U.S. commodity prices early in the year and even more difficult to obtain once COVID-19 hit. 

A graph displaying Chinese Imports of U.S. Agricultural Products.

Chinese purchases by the end of 2020 approached two-thirds of this initial target.  Even so, total agricultural exports to China in 2020 were the highest since 2017, before the tariff war between China and the U.S. began. U.S. exports to China are estimated to increase to $31.5 billion in 2021–a $4.5 billion jump from the November 2020 forecast.  

“The commitment by China to greatly expand its purchases of U.S. agricultural products has coincided with its effort to rebuild its livestock sector after suffering the devastating effects of a widespread outbreak of African Swine Fever. Sales of agricultural commodities to China accelerated in the summer and fall, and by the end of the year the pace of corn and soybean sales to China was at or approaching new records.” 

Dr. Seth Meyer, USDA Chief Economist. 

Moving forward, the Biden administration plans to take a tough stance on trade with China and keep many Trump-era tariffs intact. Collaboration and engagement with historic allies will also be an important piece to watch when monitoring the state of U.S. trade in 2021. The incoming trade team is stacked with linchpins, such as U.S. Trade Representative Katherine Tai. U.S. agricultural export demand in 2021 is projected to remain strong as the low stock carryover for major crop commodities and expanded demand should continue to support crop prices at current high levels. 

“China is simultaneously a rival, a trade partner, and an outsized player whose cooperation we’ll also need to address certain global challenges.” 

Katherine Tai, U.S. Trade Representative. 
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