US Agriculture and Energy Sector Crushed by China's Decision: What's Sec...

With Transcript 

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in the days following Donald Trump's

0:04

re-election as US president the media

0:07

Spotlight has zeroed in on anticipated

0:09

shifts in American Trade policy

0:11

prominent among these is Trump's vow to

0:13

impose blanket tariffs on All Imports

0:16

with a particular emphasis on Chinese

0:18

Goods a policy likely to escalate

0:20

tensions in an already strained trade

0:22

relationship while details of the Trump

0:24

administration's plans remain to be seen

0:27

it's worth noting the steady decline in

0:29

us China trade over recent years a trend

0:31

that has particularly affected American

0:33

businesses relying on Chinese markets

0:36

Chinese imports from the United States

0:37

have fallen significantly as part of

0:39

beijing's broader strategy to diversify

0:42

suppliers and reduce dependency on us

0:44

Goods which has affected several

0:46

critical us Industries over the past

0:49

three years trade volume between the two

0:51

Nations has dropped our analysis

0:53

identifies three sectors most affected

0:55

by China's reduced imports from the

0:57

United States which we're going to cover

0:59

in this video with details before

1:01

exploring the three sectors most

1:03

affected by China's reduction in imports

1:05

from the US let's first walk through the

1:07

historical context of the China us

1:09

relationship up to recent

1:14

years the relationship between the

1:16

United States and China has evolved

1:18

significantly over the past two

1:19

centuries encompassing periods of

1:21

cooperation competition and conflict

1:24

this comprehensive overview examines the

1:26

historical trajectory of us China

1:28

relations focusing on on geopolitical

1:30

Dynamics and economic interactions the

1:33

inaugural American merchant ship the

1:35

Empress of China arrived in Canton Guang

1:38

Joo in 1784 marking the beginning of

1:41

direct trade between the United States

1:43

and China throughout the 19th century

1:46

trade expanded with American Merchants

1:48

exporting Goods such as jinang and

1:50

importing Chinese tea silk and Porcelain

1:53

however geopolitical tensions arose

1:55

during events like the Opium Wars 18391

1:58

1860 where Western Powers including the

2:02

US sought to open Chinese markets

2:04

through unequal treaties the Treaty of

2:06

wangia in 1844 granted the US most

2:10

favored nation status facilitating

2:12

increased trade and missionary

2:16

activities during World War II the US

2:18

allied with the Republic of China

2:20

against Japanese aggression providing

2:22

military and economic support following

2:24

Japan's defeat China plunged into a

2:27

civil war between the nationalists Quang

2:30

and the Communists the Communist victory

2:32

in 1949 led to the establishment of the

2:34

People's Republic of China PRC prompting

2:38

the US to sever diplomatic ties and

2:40

recognize the Nationalist government in

2:42

Taiwan as the legitimate government of

2:46

China Cold War era and isolation from

2:49

1949 to

2:51

1971 the early Decades of the Cold War

2:54

were marked by Mutual suspicion and

2:57

hostility the United States implemented

2:59

containment policies including trade

3:01

embargos and diplomatic isolation

3:03

viewing the People's Republic of China

3:05

as a communist adversary aligned with

3:07

the Soviet Union China's involvement in

3:10

the Korean War from 1950 to 1953 against

3:14

us-led forces further strained

3:18

relations reproach and normalization

3:21

from 1971 to 1979 a significant thaw

3:25

began in the early

3:26

1970s president Richard Nixon's historic

3:29

visit to China in 1972 following secret

3:32

diplomacy by Henry Kissinger led to the

3:35

Shanghai communic where both Nations

3:37

agreed to work towards normalizing

3:39

relations this culminated in the

3:41

establishment of formal diplomatic

3:43

relations on January 1st 1979 under

3:47

President Jimmy Carter and the United

3:49

States acknowledgement of the one China

3:51

policy recognizing the People's Republic

3:53

of China as the sole legal government of

3:57

China economic engage ment and trade

4:00

expansion from the 1980s to the 2000s

4:03

the 1980s and 1990s witnessed burgeoning

4:06

economic ties China's Market reforms

4:09

under dun sha ping attracted United

4:11

States businesses leading to significant

4:13

investments in trade growth in 2001

4:16

China's accession to the World Trade

4:18

Organization marked a milestone

4:20

integrating China into the global

4:22

economy and significantly increasing

4:24

bilateral trade by 2006 China had become

4:27

the United States second largest Trading

4:31

partner strategic competition and trade

4:33

tensions 2010s

4:36

2020s the past decade has seen a shift

4:39

towards strategic competition the United

4:41

States has expressed concerns over

4:42

China's Trade Practices intellectual

4:44

property issues and Regional

4:46

assertiveness the trade War initiated in

4:49

2018 under President Donald Trump led to

4:51

reciprocal tariffs affecting billions in

4:54

Goods despite a phase 1 trade deal in

4:56

January 2020 tensions persisted EX

4:59

exacerbated by geopolitical disputes and

5:01

differing responses to Global

5:05

challenges now let's examine the trade

5:07

relationship between the United States

5:09

and China over the years focusing on the

5:12

changes in trade volume in recent years

5:15

trade relations between the United

5:17

States and China have undergone

5:19

significant fluctuations from 2021 to

5:22

2024 while both Nations remain crucial

5:25

trading partners recent years have

5:27

witnessed a gradual decline in trade

5:29

volume influenced by economic shifts and

5:31

heightened geopolitical tensions by 2023

5:34

trade volumes began to decline as

5:36

economic and political strains became

5:38

more pronounced US exports to China fell

5:41

by 4.3% dropping to

5:53

$144.95 its Supply sources particularly

5:56

in sectors like semiconductors and

5:58

agricultural products

6:00

as of November 2024 specific trade

6:02

volume data for the entire year is

6:04

pending release however preliminary

6:07

indicators suggest that the trend of

6:09

declining US exports to China has

6:11

continued China's strategy of reducing

6:13

Reliance on us Imports most notably in

6:16

sectors like technology and energy has

6:18

led to further contraction in trade

6:20

volume between the two countries

6:22

additionally us exporters face a

6:24

challenging environment due to increased

6:26

tariffs and shifting economic policies

6:29

in recent years China has significantly

6:31

reduced its imports from the United

6:33

States in three key

6:36

sectors let's take a quick pause could

6:38

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6:44

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6:49

you agricultural products in recent

6:52

years China has significantly reduced

6:54

its Imports of us agricultural products

6:57

especially soybeans and corn as part of

6:59

a iic effort to diversify its Supply

7:01

sources and strengthen food security

7:04

historically the United States was

7:05

China's primary supplier of soybeans

7:08

however since 2018 China's Imports of us

7:10

soybeans have declined sharply by 2024

7:14

the US accounted for only 18% of China's

7:16

soybean Imports a considerable drop from

7:18

40% in 2016 in contrast Brazil's share

7:22

Rose to 76% over the same period

7:25

positioning it as China's leading

7:27

supplier this shift can be attributed to

7:29

several key factors first the US China

7:32

trade war led to tariffs on us soybeans

7:35

prompting China to seek other sources

7:38

additionally Brazilian soybeans have

7:40

been more competitively priced making

7:42

them a preferred choice for Chinese

7:44

importers Beyond these immediate

7:46

economic incentives China has also aimed

7:48

to reduce its Reliance on any single

7:50

supplier to mitigate risks from

7:52

geopolitical tensions reflecting a

7:54

broader diversification strategy China's

7:57

corn import patterns have also shifted

7:59

substantially in 2023 Brazil overtook

8:03

the us as China's top corn supplier

8:06

following China's approval of Brazilian

8:08

corn Imports in 2022 by mid 2024 Brazil

8:12

supplied approximately 71% of China's

8:15

corn Imports further diminishing the US

8:17

share in this market this shift in corn

8:20

sourcing is influenced by China's focus

8:22

on diversifying import sources to ensure

8:25

stable agricultural Supply chains and by

8:27

an increase in its domestic corn

8:29

production

8:30

which aims to reduce Reliance on foreign

8:32

sources ongoing trade disputes with the

8:34

US have further encouraged China to seek

8:37

alternative suppliers these strategic

8:39

changes in China's import patterns

8:41

reflect broader goals of enhancing food

8:43

security reducing vulnerability to

8:45

external pressures and stabilizing

8:48

agricultural Supply

8:50

chains technology and electronics in

8:54

recent years China has taken substantial

8:56

steps to reduce its Reliance on us

8:58

semiconductor Imports driven by a need

9:01

to mitigate risks from trade tensions

9:03

and Export controls this strategic shift

9:05

is evident in the marked decrease in

9:07

semiconductor Imports and the

9:09

substantial Investments China has made

9:11

in its domestic semiconductor industry

9:13

while also diversifying its Supply

9:15

sources in 2022 China imported

9:19

538.org grated circuits a 15.3% decrease

9:24

from the previous year the total value

9:26

of these Imports amounted to 415 .6

9:30

billion reflecting a year-over-year

9:32

decline of

9:34

3.9% this downward Trend continued in

9:37

2023 where the first 9 months saw a

9:40

further 15% drop in integrated circuit

9:42

Imports totaling

9:44

379.8 billion units these figures

9:47

highlight China's growing emphasis on

9:49

reducing dependency on foreign

9:51

semiconductors particularly amid

9:53

escalating Global Supply Chain

9:54

challenges and geopolitical pressures to

9:57

address this dependency China has

9:59

significantly ramped up its investments

10:01

in its semiconductor sector in 2023

10:03

alone more than 350 new semiconductor

10:07

projects were launched spanning critical

10:09

areas like third generation

10:11

semiconductors memory Automotive chips

10:13

Advanced packaging and sensor technology

10:16

this expansion has continued into 2024

10:19

with the Chinese government committing

10:21

an additional $48 billion towards

10:24

semiconductor research and development

10:26

infrastructure and Workforce Development

10:28

this invest underscores China's

10:30

determination to build a robust domestic

10:33

semiconductor industry capable of

10:35

meeting its technological needs

10:37

independently China's approach also

10:39

involves diversifying its semiconductor

10:41

Supply Chain by procuring more from non

10:43

us sources such as Taiwan South Korea

10:46

and Japan meanwhile domestic players

10:49

like the semiconductor manufacturing

10:51

international corporation or smic have

10:54

made notable progress smic for example

10:57

recently achieved the production of 7

10:59

nanometer chips an important Milestone

11:01

that reduces Reliance on foreign

11:03

technology and reflects China's strides

11:05

in advancing its semiconductor

11:07

capabilities through these efforts China

11:09

aims to achieve greater autonomy in the

11:11

semiconductor industry ensuring

11:13

resilience against external economic

11:15

pressures and positioning itself as a

11:17

key player in global technology these

11:20

developments represent a significant

11:21

shift in global semiconductor Supply

11:23

chains with China's strategic

11:26

Investments and reduced Imports

11:27

underscoring its intent to bolster its

11:29

technological and economic

11:33

independence energy in recent years

11:36

China has strategically Diversified its

11:38

sources of liquefied natural gas or LNG

11:41

reducing its Reliance on US Energy

11:43

exports and bolstering its energy

11:45

security through long-term contracts

11:47

with multiple International suppliers

11:49

historically the United States became a

11:51

significant LNG supplier to China

11:54

particularly after China reduced tariffs

11:55

on us LNG imports from 25% to 10% in in

11:59

2019 this tariff reduction initially led

12:02

to a surge in imports from the US

12:04

peaking in

12:05

2021 however as geopolitical tensions

12:08

and trade disputes intensified China

12:10

began shifting its focus toward

12:12

alternative suppliers to reduce its

12:14

exposure to the US market by 2023

12:17

China's LNG imports from the US had

12:20

decreased with the US accounting for a

12:22

smaller share of China's total LNG

12:24

Imports China increasingly turned to

12:26

suppliers such as Australia Qatar and

12:28

Russia to fulfill its energy needs in

12:31

2021 for instance Australia was China's

12:34

largest LG supplier providing 40% of the

12:37

country's total LNG Imports this

12:40

diversification aligns with China's

12:41

efforts to establish a more resilient

12:43

and self-sufficient energy supply chain

12:45

to secure a stable Energy Future China

12:48

has signed several long-term LNG

12:50

contracts reinforcing its commitment to

12:52

consistent Supply from a variety of

12:54

sources in November 2024 total energies

12:57

in China's copc signed heads of

12:59

agreement to supply 2 million tons of LG

13:02

annually over a 15-year period starting

13:05

in 2028 additionally petrochina

13:07

projected that China's LG Imports would

13:09

reach between 78 and 80 million metric

13:12

tons in 2024 driven by robust Industrial

13:16

and Commercial demand this reduction in

13:18

China's LG imports from the United

13:20

States poses potential challenges for us

13:23

exporters analysts have raised concerns

13:25

that future policy changes such as

13:27

increased tariffs or further

13:29

diversification efforts by China could

13:32

create additional obstacles for us LNG

13:34

exports to China impacting an important

13:36

Revenue stream for the American Energy

13:41

sector conclusion in summary China's

13:44

strategic reduction in imports from the

13:46

United States has significantly impacted

13:48

key sectors of the American economy

13:51

including agriculture technology and

13:53

energy by sourcing more soybeans corn

13:56

semiconductors and LNG from alternative

13:58

suppliers China has Diversified its

14:00

trade relationships and decreased

14:03

Reliance on us products this shift has

14:06

not only affected US market share but

14:08

also challenged American Industries that

14:10

were once heavily reliant on Chinese

14:12

Demand with the Trump administration's

14:15

potential imposition of blanket tariffs

14:17

on Chinese Imports the economic strain

14:20

on us businesses already feeling

14:22

pressure from declining trade volumes

14:24

could intensify potentially adding

14:26

further hurdles to an economy facing

14:28

increased ing Global competition and

14:30

geopolitical

14:34

complexities that's all for this video

14:36

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