- Data shows an extraordinary change in demand for goods between the US and China.
According to Bloomberg article published on March 21, 2023, as millions died and countless more lives were overturned, the very structure of global commerce changed under the weight of Covid-19. Entirely new products became among the most shipped across the Pacific Ocean, while mainstays of the China-US economic relationship withered amid falling demand and frozen passenger travel.
Not all of the changes can be attributed to the spread of Covid — declared a pandemic by the World Health Organization three years ago this month — with Washington and Beijing already caught in an increasingly tense technology Cold War. Yet the numbers show clear patterns that correlate to a shift in demand and limitations caused by virus-related lockdowns and supply-chain interruptions.
US shipments of one product category alone leapfrogged the nation’s sales of cars and aircraft to become the fourth-biggest export to China last year. With a complicated title of “blood, antiserum and immunological products,” this subset of medical supplies posted a threefold increase to bring in almost $6 billion in revenue for the US. And that was chiefly due to one item: Covid-19 rapid test kits, according to a Bloomberg Opinion analysis of US International Trade Commission data.
By contrast, sales of aircraft and parts plummeted to $5.3 billion last year from $10.4 billion in 2019, while car exports dropped 25% to $5.5 billion. The first was caused by a lack of manufacturing staff and drop in air travel, the latter by a worldwide chip shortage that hampered production. Bloomberg Opinion analyzed more than 100,000 data points categorized by Harmonized Tariff System codes, and cross-referenced product categories with lists of Covid-19 supplies published by the World Trade Organization, the WHO, and US ITC.
Sales of chemicals used in polymerase chain reaction (PCR) tests contributed a further $1.5 billion in revenue to the US last year, the data show. Add to that a jump in demand for hydrogen peroxide (used as an antiseptic,) the antiviral drug Remdesivir, and paracetamol, then total sales of Covid-19 related products topped $10 billion, trailing only long-time staple soybeans as a driver of US exports.
Increased energy independence of the US, rising demand from China, and a spike in prices meant shipments of oil products doubled from 2019 to 2022 to nearly $7 billion. And while the world faced a jump in demand for semiconductors followed by a crippling shortage, US exports of these components to China climbed to just $9.4 billion from $8.2 billion the year before the pandemic. That’s in large part due to a sharp economic slowdown toward the end of last year that forced a pullback in production of computers, smartphones and consumer electronics.
While China was spending less on cars and more on medical supplies, the nation was also doing a roaring trade in pharmaceuticals. Driven primarily by antivirals used to treat Covid, drug shipments to the US climbed more than 10-fold to $7.2 billion last year. Also a hot item: games consoles, which enjoyed a boom thanks to consumers across the globe stuck at home with little to do. America’s growing commitment to electric vehicles also pushed battery sales up more than fourfold to over $8 billion. Imports of ink-jet printers and televisions from China, however, plummeted by more than $2 billion each.
As the shadow of the pandemic recedes, there’s no guarantee that trade will return to normal. The two super powers remain locked in a battle of wills, and the US is keen to wean itself — and the rest of the planet — off the world’s manufacturing center. But they still need each other. At least for now.
