US Agricultural Exports to China during the Phase One Trade Deal: Larger Pie, Smaller Slice?

Abstract

The United States and China signed the Phase One trade deal on January 15, 2020. The deal ran from February 15, 2020, to February 14, 2022, and obligated China to purchase $36.5 billion worth of US agricultural products in the first year ($12.5 billion more than the baseline) and $43.5 billion in the second year ($19.5 billion more than the baseline) (He et al. 2020). While China fulfilled 81% of its agricultural purchase obligations and China’s purchases of several products, such as corn and pork, reached historical levels, it is unclear if China’s record purchases were driven by China’s growing import demand or its trade deal obligations. We investigate whether China’s agricultural imports from the United States grew in proportion to China’s agricultural imports from all sources during the trade deal. We look at both total agricultural trade and trade for specific commodities that are important for the United States. We also compare the comparative advantage of the United States and major exporters of corn, soybeans, and pork using the normalized revealed comparative advantage (NRCA) index (Yu et al. 2009).