The United States Trade Representative (USTR) has unveiled President Biden's 2024 Trade Policy Agenda, alongside the annual report for 2023. The documents reveal a strategic shift in U.S. trade, with a focus on other Asian economies and Mexico, moving away from China.
As reported by McKinsey, amid escalating tensions between China and the United States, the latter has been concentrating on diversifying its trade partners to reduce economic reliance on China. From 2017 to 2023, China's share of US manufactured goods imports decreased from 24 percent to 15 percent. The electronics sector has experienced the most significant impact from this trade shift, with its share falling from 50 percent to about 30 percent over the same period. Consequently, Mexico has seen an increase in its share of US imports. In fact, in 2023 Mexico emerged as the United States' largest import partner, primarily dealing in agriculture and transportation equipment.
Meanwhile, Europe has had to enhance its trade relations with China due to a decline in trade with Russia. McKinsey reports that between February 2022 and September 2023, trade between Europe and Russia plummeted nearly 80 percent. This drastic reduction is mainly attributed to Russia's invasion of Ukraine. As a result, EU's share of imports from China rose from 19 percent to 21 percent between 2017 and 2023.
Ambassador Katherine Tai stated that the USTR is committed to supporting the American middle class and strengthening partnerships with allied countries. "Trade is an integral part of our Administration’s vision to fundamentally shift our economic policies to focus on strengthening our middle class and working communities," said Tai. "The 2024 Trade Policy Agenda and 2023 Annual Report include key accomplishments and priorities to realize this vision. We are creating new and innovative trade arrangements with our allies and partners, enforcing existing ones, and bringing more diverse voices to the table—to drive inclusive economic growth for more people across our society." According to a press release by the USTR, exports for the U.S. agricultural sector exceeded $181 billion in 2023.
