WASHINGTON — Economic fallout from the coronavirus pandemic has cast doubt on whether China can meet its targets to buy U.S. goods under this year’s trade deal — with energy emerging as the biggest casualty.
China has made strides toward its agricultural and manufacturing targets, but it remains far behind — maybe hopelessly far — an ambitious target for purchases of oil, natural gas, refined petroleum products like propane and butane, and coal, prompting concerns from the U.S. energy industry which is encouraging the U.S. Trade Representative to increase pressure on China to reach the goal.
The targets in the deal implied China would purchase around $25 billion of U.S. energy in 2020 and even more in 2021. The latest data on U.S. exports for the month of May, released on Thursday, show China has so far this year purchased only $2 billion of that sum, near the year’s midway point.
The collapse in energy demand and energy prices amid the coronavirus pandemic explains part of why China is so far behind. Nevertheless, China’s U.S. energy purchases present a contrast to the strides it has made toward targets for the acquisition of agricultural and manufactured goods.
The pandemic and lockdowns to prevent the virus’s spread have crippled trade around the world. But as the first to reopen its economy after the pandemic, China has been a strong trading partner. In April and May, China reclaimed its mantle as the largest trading partner of the U.S. For most of the past two years, during the trade war, it had dropped to third place behind Canada and Mexico.
“I think the expectation is that China’s demand for energy will be strong as it continues to grow, and we have the capacity to sell into that market,” said Stephen Comstock, vice president of the American Petroleum Institute.
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