Image Source: Bloomberg
Last year, trade between the US and China hit a record high, even though US relations with China were getting worse.
Official figures show that trade between the two countries was worth $690.6 billion (£572.6 billion) in 2022.
After a Chinese balloon flew across the US, US relations with China are now at an all-time low. Beijing denies that we used it to spy.
Since 2018, the two largest economies in the world have also been in a trade war.
The new numbers show that US imports from China rose to $536.8 billion last year. This is because more Americans bought toys and cell phones made in China. The US sent $153.8 billion worth of goods to China during the same period.
Some of the increase in trade between the US and China is due to the rising cost of living, but the numbers also show how dependent the two countries still are on each other, even after years of fighting over trade.
In 2018, the Trump administration began to increase trade restrictions on China.
After years of rising imports from China, Mr. Trump started tariffs on more than $300 billion of Chinese goods. As a response, China put import taxes on about $100bn worth of American goods.
Most of these rules were still in place after Joe Biden became president for more than two years.
Antony Blinken, the Secretary of State, was going to visit China this month. This was a sign that US relations with China was improving.
On February 5 and 6, the United States’ top diplomat was set to go to Beijing to discuss a wide range of issues, such as security, Taiwan, and Covid-19.
But the trip was suddenly canceled after a Chinese spy balloon was found drifting across America.
Officials from China have repeatedly said that the airship is only for civilian use and that it got into the US by accident.
In Tuesday’s State of the Union address, US President Joe Biden didn’t talk about the Chinese balloon directly but said that his government will always protect its sovereignty.
High-altitude spying sinks US relations with China further
The US relations with China was at an all-time low even before Anthony Blinken put off his trip to Beijing.
When, a day before he left, what seemed to be a Chinese spy balloon over the state of Montana stirred up the tensions he was trying to ease, it became painfully clear how low things had gotten.
In the end, China’s foreign ministry said the unmanned airship had been used to study the weather and had been blown off course by the wind.
Beijing may not have wanted the incident to ruin the secretary of state’s visit, which was the first of its kind.
Too late
The US State Department canceled the trip a few hours after China said it was sorry.
Given how big the gap has gotten, the fact that the trip was happening at all was something to be happy about.
But now, all left is a sense that a huge chance was lost.
US officials had made it clear that breakthroughs were not the point. Instead, the point was to talk.
Mr. Blinken doesn’t want “competition to turn into a fight.”
The world’s two largest economies have had a hard time.
In recent years, a trade war under Trump, tensions over Taiwan, and a more assertive China under Xi Jinping has hurt the US relations with China. It fell even more when China didn’t say anything bad about Russia’s invasion of Ukraine.
Then, in November, President Joe Biden and President Xi Jinping met on the sidelines of the G20 summit.
Both leaders wanted to avoid a fight, so they toned down their words.
And Mr. Blinken wanted to add to that.
Even before the balloon went up, there was a change in tone rather than what was being said.
The Americans have kept going with economic restrictions and military expansion in the region, which has made Beijing angry.
Last week, Japan and the Netherlands agreed with the United States to stop sending advanced chip-making equipment to China.
This wouldn’t be the first time the US has taken steps to cut Beijing off from sensitive semiconductor technology and supply chains.
Chris Miller, an international history professor who wrote a book about the tensions between the US and China over chip technology, says this shows that the US has become much tougher on tech transfer and is trying to get key allies on board.
In the past few days, the US military said it was increasing its presence in the Philippines. This is one of several steps the US is taking to strengthen its alliances in the region as it prepares to stand up to China as worries about a possible war with Taiwan grow.
But Biden’s government still wanted to talk.
Mr. Blanchett said that the White House thought this was a good time to do it because it had gotten some breathing room from a China-skeptical Congress by showing that it was tough on Beijing, going further than what former President Donald Trump had done.
Instead, the balloon gave Republicans a chance to demand action against China’s “brazen disregard for US sovereignty.”
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Officials from the State Department stressed that they hadn’t given up and that diplomatic contacts were still trying to set up another meeting.
But they didn’t give a date, which made it seem like their relationship was in limbo.
