11.4% plunge for last year amid trade war tipped to deepen with pandemic

US goods exports to China-important to states’ economies and jobs-contracted by 11.4 percent in 2019 amid tariffs and business uncertainties, and worse may be in store this year with COVID-19, a leading trade association said in a report on Thursday.

The “2020 State Export Report”, released by the US-China Business Council, or USCBC, also indicates a 10 percent drop in the number of US jobs supported by exports to China in 2017 and 2018, a trend that is likely to get worse as the coronavirus shows no sign of abating in many parts of the world.

The annual report of the trade body, which represents more than 200 US companies doing business with China, offers a perspective from the US side of how trade and jobs had been affected in a nearly two-year bruising trade battle between China and the US. The two sides reached a phase-one trade deal in mid-January.

Over the past two years, tariffs and an uncertain business environment have prompted “precipitous declines” in US exports to China that have not been fully made up by its export growth to other markets, the report noted.

In 2017, 30 US states exported more than $1 billion of goods to China; in 2019, only 27 states were able to do so. In 2017 and 2018, only 15 states managed to export more than $1 billion in services to China. Policies affecting travel and student visas may have resulted in lower numbers for 2019, according to the report.

In all, the US exported nearly $105 billion in goods to China last year, marking a continued slide from a high point in 2017, when US firms sent $127 billion worth of goods to the Chinese market, resulting in a two-year contraction of 18 percent, according to the report.

In addition, in 2018, trade tensions with China played a role in the loss of more than 100,000 jobs that were supported by exports to China.

The downward trend in exports is likely to be reversed in the short term, thanks to the committed purchase of huge amounts of US goods and services this year and next as part of the US-China phase-one trade agreement.

But the deal does not eliminate many of the tariffs already in place, which will continue to hurt US exporters and importers, the report said.

Earlier reports said that under the phase-one trade deal, the 25 percent punitive import taxes on $250 billion in Chinese goods that started in 2018 have remained intact.

The data in the USCBC report do not reflect possible effects on trade due to the novel coronavirus, which flared up in December.

135,000 deaths worldwide

The pandemic had infected 2,034,802 people and claimed 135,163 lives worldwide as of noon on Friday, the World Health Organization said.

The US has more cases and deaths than any other country, with more than 660,000 diagnosed cases and at least 32,000 deaths as of Thursday.

US President Donald Trump unveiled new guidelines on Thursday aimed at reopening the nation’s economy amid the pandemic by putting the responsibility on governors to decide how and when to restart their states’ economies. “We are not opening all at once, but one careful step at a time,” he said on Thursday in Washington.

The non-mandatory guidelines are broken into three phases. Each phase requires a 14-day period of “downward trajectory” of COVID-19 cases to move on to the next phase.

Chen Yingqun in Beijing contributed to this story.

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