By David Lawder

WASHINGTON (Reuters] – U.S. merchandise exports to China decreased in December. It reflected a $45 billion rise in U.S. trade deficit for 2021. Also, it reflects a two-year drop in Beijing’s purchases under the Phase 1 trade deal negotiated former President Donald Trump.

According to the U.S. Census Bureau, Tuesday’s increase in the US goods trade deficit with China was 14.5%. It reached $355.3 billion. This figure is up from the record $418.2 million set in 2018. This was a 10-year record low. The gap in 2020 stood at $310.3 trillion.

In 2021, U.S. exports to China increased by $71.6 billion compared with 2020. This is 16.4% more than their previous record of $506.4 billion in 2018. China exports increased 21.3% or $26.6 billion to $151.1 billion.

In 2021, the U.S. global trade deficit jumped 27% to $859.1 million.

The increase in U.S. trade to China in 2021 was insufficient to achieve China’s objectives for greater goods purchases in accordance with the Phase 1 Trade Agreement signed in January 2020. It is intended that this deal will stop the Trump-led tariff war on Chinese products.

Beijing also agreed to buy U.S. farm products and services at $200 billion more than 2017 over the next two years. This was in addition to other market access commitments. These purchases were cancelled at the close of 2021.

Deputy U.S. Trade Representative Sarah Bianchi said last week that it was “really clear that the Chinese haven’t met their commitment in Phase 1” and the Biden administration was working with Chinese officials https://www.reuters.com/world/us/us-trade-official-says-china-failed-meet-phase-1-commitments-2022-02-01 to address the matter.

U.S. officials also told Reuters early on Monday that they were losing patience https://www.reuters.com/business/exclusive-us-calls-concrete-action-china-meet-phase-1-purchase-commitments-2022-02-07 over China’s failure to close the shortfall in its purchase commitments.

Through November, China had met only about 60% of its goods purchases goal, according to trade data https://www.piie.com/research/piie-charts/us-china-phase-one-tracker-chinas-purchases-us-goods compiled by Peterson Institute for International Economics senior fellow Chad Bown. China gained no ground over the United States in 2021 as a result of its December decline in U.S. Exports to China.