China is now Europe’s biggest trading partner for goods : worldnewsFebruary 21, 2021
Arbitrary statistics that ignores that the USAs trade with Europe has been vastly weighted towards Services rather than material goods for decades
Any serious analysis of economy and trade includes services. This is a profoundly flawed statistic that somehow pretends that the internet, banking, software and entertainment sectors aren’t relevant.
The US Europe Service economy trade is vastly larger than China EU goods trade
This week the media seized on a report by Eurostat, the European Union’s statistical agency, to declare that China surpassed the United States in 2020 to become the EU’s main trade partner. This is simply not true.
Eurostat’s report only addressed trade in goods. It shows that EU27 goods trade with China in 2020 totaled €586 billion, compared to €555 billion in EU27 with the U.S. That is a significant change from 2019, when EU27 trade with the U.S. was €617 billion, whereas EU27 goods trade with China was €561.2 billion.
Trade between countries, however, doesn’t just consist of trade in goods. It also includes trade in services, which the Eurostat report did not include. Services trade has been growing faster than goods trade. More European and American jobs depend on services than on goods, and the U.S. remains the EU’s top services trade partner.
While final numbers for trade in services are not yet available for the full year 2020, we do have data for the first three quarters of the year. Trade in services between the EU and the U.S. during that period was €296.3 billion — five times more than the trade in services between the EU and China, which totaled €53.3 billion.
If we annualize those figures to estimate the EU’s total trade in goods and services for 2020, we find that EU27-China trade in goods and services likely totaled €657 billion in 2020, while EU27-U.S. trade was €950 billion — 40 percent higher.
In short, if you look at overall trade flows and not just one kind of flow, it is clear that the EU’s largest trading partner is actually the U.S., as it has been for decades.