Rethinking the China-U.S. Trade balance from 2001–2020 based on emergy perspective

Abstract

In the year 2018, escalating trade imbalances between China and the United States led to a trade war over tariffs and trade policies that garnered global attention. While trade deficits are primarily reflected in currency terms, trade involves a broader exchange of different resources. Hence, this study employs Emergy Accounting approach (EMA), an environmental quality-oriented assessment method, to collect official statistical data from both countries and consider differences in statistical data weight. Utilizing the NEAD V2.0 database, this research calculates and discusses the total emergy flow, trade imbalances, and structures in China-U.S. trade from 2001 to 2020. Additionally, it computes and analyzes emergy indicators, delving into the dynamic changes in the emergy values of various categories of goods. The results indicate a gradual balance in the emergy trade deficit between China and the United States, with both countries benefiting from the trade. Specifically, China benefits from importing raw materials from the United States, while the U.S. gains from importing inexpensive embodied labor from China. Considering differences in data statistical calibers and applying the EMA contribute to a more accurate understanding of the trade situation and the correction or prevention of errors. The Emergy theory provides a new perspective for a comprehensive assessment of trade relationships. China and the United States have the potential to establish a fairer, more balanced, collaborative, and sustainable trade relationship, contributing to global sustainable development.