What America Sells

China is America’s third-largest goods export market, behind Canada ($350 billion) and Mexico ($334 billion) but ahead of every European nation. In 2024, American companies and farms shipped $144 billion in goods across the Pacific. That’s eleven times the $13 billion exported in 1999 — genuine growth, but still less than a third of the $440 billion in imports flowing the other direction. For every dollar America exports to China, it imports three.

The export basket breaks into three roughly equal pillars. Capital goods accounted for $49 billion — semiconductors, civilian aircraft, industrial machinery, computer accessories. Industrial supplies and materials accounted for another $49 billion — chemicals, plastics, waste and scrap metals, cotton, oil seeds. Food, feeds, and beverages contributed $23 billion, dominated by soybeans. Consumer goods ($15 billion) and automotive ($7 billion) round out the total.

Compare this with what America imports from China: $214 billion in consumer goods, $145 billion in capital goods. The asymmetry is structural. America exports materials — the commodities and components that go into manufacturing. China exports finished goods — the products that sit on store shelves and office desks. One economy sells inputs. The other sells outputs.

Capital goods are the largest export category at $49 billion, and the most politically sensitive. This category includes semiconductors — the advanced chips designed by Nvidia, Qualcomm, and Intel that power everything from Chinese smartphones to data centers. It includes civilian aircraft — Boeing has historically delivered 100–150 jets per year to Chinese airlines, though the relationship has strained since 2019. And it includes industrial machinery, medical equipment, and telecommunications gear.

Capital goods exports peaked at $53 billion in 2018 — the year before export controls began tightening. The Commerce Department’s “Entity List” restrictions, which block specific Chinese firms from purchasing American technology, have since narrowed the pipeline. Huawei was added to the list in May 2019, effectively cutting off its access to American chips and software. The October 2022 semiconductor export controls went further, banning the sale of advanced AI chips and chipmaking equipment to China. Nvidia’s A100 and H100 GPUs — the processors driving the AI revolution — became contraband.

Yet capital goods exports remained at $49 billion in 2024, just 8% below their peak. The reason: China still needs enormous quantities of non-restricted semiconductors — the mature-node chips used in cars, appliances, and industrial equipment — plus aircraft parts, medical devices, and industrial machinery that remain outside the export control regime. The restrictions target the technological frontier, not the broad middle of the product range.

Boeing’s story illustrates the tension. In 2017, the company delivered 202 aircraft to Chinese airlines, making China its largest single-country customer. By 2020, amid political tensions and the 737 MAX grounding, deliveries had plummeted. China’s state-backed airline purchasing shifted toward Airbus, and COMAC’s domestically built C919 entered service in 2023 on Chinese domestic routes. Boeing’s Chinese order book, once worth tens of billions, has become a question mark.

Industrial supplies and materials — the workhorse category — contributed $49 billion in 2024. This is the least glamorous and most revealing part of the export basket. It includes chemicals (polymers, pharmaceuticals precursors, specialty compounds), plastics in primary forms (polyethylene, polypropylene), waste and scrap metals (recycled aluminum, copper, steel), cotton (from Texas and Mississippi), and oil seeds other than soybeans.

What makes this category significant is that it’s the only one near balance. In 2024, America exported $49 billion in industrial supplies to China and imported $43 billion — a gap of just $6 billion. Compare that with consumer goods, where the deficit was $199 billion. Industrial supplies represent the one area where the two economies trade as approximate equals.

The growth trajectory has been remarkable: from $4 billion in 1999 to $49 billion in 2024, a twelvefold increase. The shale oil revolution added a new dimension after 2015, as American natural gas liquids and petrochemicals became competitive globally. The United States went from importing Chinese-made plastics to exporting American-made feedstock for Chinese plastics factories. In 2023, industrial supplies briefly overtook capital goods as the largest export category at $54 billion, before capital goods recovered slightly in 2024.

One politically charged sub-category: scrap and waste. America ships millions of tons of recyclable materials to China every year — old aluminum cans, copper wire, cardboard, steel. China’s 2018 “National Sword” policy, which restricted imports of contaminated recyclables, disrupted American municipal recycling programs almost overnight. Cities from Philadelphia to Sacramento suddenly had nowhere to send their sorted recyclables. The metals trade continued, but the broader lesson was clear: even in waste, the two economies were deeply intertwined.

The food export story is the most dramatic arc in the entire U.S.-China trade relationship. In 1999, American food exports to China totaled $800 million — barely a rounding error. By 2012, they had reached $21 billion. The driver was a single crop: soybeans.

China’s economic transformation in the 2000s brought 400 million people into the middle class, and the middle class wanted meat. Pork consumption — the backbone of Chinese cuisine — roughly doubled between 2000 and 2015. Feeding hundreds of millions of pigs required vast quantities of protein-rich feed, and the most efficient source of animal feed protein on Earth was the American soybean. Iowa, Illinois, Indiana, and Minnesota planted millions of additional acres, redirecting their harvests toward Chinese crushers who extracted soybean meal for pig feed and soybean oil for cooking.

By 2017, China was purchasing roughly 60% of America’s entire soybean export crop. Soybean farmers in the Midwest had, in effect, a single customer for more than half their output. It was an extraordinary dependence — and an extraordinary vulnerability.

When China retaliated against American tariffs in July 2018 with a 25% tariff on soybeans, the impact was instant. American food exports to China crashed from $18 billion in 2017 to $8 billion in 2018 — a $10 billion decline in a single year. Soybean prices at the Chicago Board of Trade fell from $10.50 per bushel to $8.50. The Trump administration responded with $28 billion in emergency farm subsidies over two years — more than double the annual value of the lost soybean trade — to compensate Midwestern farmers. We’ll examine the soybean war in detail in Episode 7.

The recovery, when it came, exceeded anything the pre-tariff era had produced. Under the Phase One trade deal (January 2020), China committed to purchasing $32 billion per year in agricultural goods. It didn’t hit the exact target, but it came close enough: food exports surged to $25 billion in 2020, $31 billion in 2021, and peaked at $35 billion in 2022 — nearly double the pre-tariff high. The 2022 figure was inflated by record commodity prices (soybeans touched $17 per bushel) and a drought in Brazil that temporarily reduced China’s alternative supply. By 2024, exports had settled back to $23 billion as Brazilian production recovered and commodity prices normalized.

The clearest way to understand the trade relationship is to look at the balance in each category. Where does America win, and where does it lose?

Two categories produce surpluses: food (+$18 billion) and industrial supplies (+$6 billion). Three produce deficits: consumer goods (−$199 billion), capital goods (−$96 billion), and automotive (−$15 billion). The surpluses add to $24 billion. The deficits add to $310 billion. The consumer goods deficit alone is larger than America’s entire export total.

This scorecard reveals the structural nature of the imbalance. Even if America doubled its food and industrial exports to China — an unrealistic scenario — it would reduce the deficit by just $72 billion, leaving a $223 billion gap. The deficit exists because America imports enormous quantities of finished consumer products and electronics that it simply does not export in comparable volumes. The fix, if there is one, lies not in selling more soybeans but in either importing fewer iPhones — or having China buy more American services, as Episode 5 explores.

There is one thing America makes better than any country on Earth that barely appears in the goods export data: intellectual property. Software, pharmaceutical formulas, entertainment content, financial technology, engineering designs — these are the products of America’s most globally competitive industries. But they don’t ship in containers. They transmit as digital files, licensed under contracts, and show up in the services trade data rather than the goods data.

In 2024, American IP exports to China (classified as “charges for the use of intellectual property”) reached an estimated $8 billion. Add financial services, business consulting, cloud computing, and education, and the services surplus with China totaled $33 billion — a story for Episode 5. The point here is simpler: the goods deficit overstates the imbalance because it measures containers and ignores code.

But it only overstates by so much. Even adding the $33 billion services surplus, the overall current account deficit with China was −$298 billion in 2024. The services advantage is real but modest. The goods gap is simply too large for services to bridge.