The European Union’s (EU) statistics agency, Eurostat, said on Monday that China overtook the United States (US) as the bloc’s largest trading partner in 2020. According to the agency, the EU’s trade volume with China reached $711 billion in 2020, compared to $673 billion for the US. During the same time period, the US’ imports dropped by 13.2% and exports dropped by 8.2%.
Furthermore, the gap between trade with China and the US was widened by the EU’s exports to Beijing rising by 2.2% to €202.5 billion, while at the same time, imports increased by 5.6% to €383.5 billion. Conversely, the bloc’s exports to the US fell by 13.2% in the same period and imports by 8.2%.
Although China’s economy suffered during the first half of 2020 due to the coronavirus pandemic, it recovered quickly towards the end of the year, even outperforming its 2019 consumption levels. The increased consumption from China, in turn, helped drive sale of European products, particularly in the automobile and luxury sectors. Meanwhile, China’s exports to the bloc benefited from the large demand for medical equipment and electronics.
In addition, the EU-US trade has suffered last year is due to minor trade spats between the two, such as the Office of the US Trade Representative (USTR) raising tariffs on certain EU products, including aircraft components and wines from France and Germany in December. Similarly, last April, the EU also extended tariffs on a list of US imports, including lighters and plastic fittings for furniture, in retaliation to the US imposing duties on Europe’s steel and aluminium exports.
This news of the US being “dethroned” from the top position also comes against the backdrop of the EU and China recently having signed the long-negotiated EU-China Comprehensive Agreement on Investments (CAI) on December 30. The deal will allow EU manufacturers greater access to China’s vast market. It is also expected to create a more balanced trade between the two, as Beijing has committed to non-discriminatory practices such as the elimination of quantitative restrictions, foreign equity caps, and joint venture requirements.
Apart from this, Eurostat also said that the United Kingdom (UK), which is no longer officially part of the EU, was the bloc’s third-largest trading partner after China and the US in 2020. This is despite the fact that EU exports to the UK fell by 13.2% during the Brexit transition period, while imports from the UK dropped by almost 14%.
China Becomes the EU’s Largest Trading Partner, Beating US
Eurostat said on Monday that China overtook the United States to become the European Union’s largest trading partner in 2020.
February 16, 2021
SOURCE: ORF