For the first time, China has taken Canada's place as the US's largest trading partner. This is related to the energy crisis that reduced the value of Canadian oil. On the other hand, trade turnover between the US and Russia fell by a third over the past year.
US Department of Commerce data for the first three quarters of 2015 indicate that China surpassed Canada and became the largest trading partner of the United States since the DOC started keeping tracks in 1985. From January to September, the US/China trade volume reached $441.56 billion, while American trade with its northern neighbor only gained $438.1 billion for the same period.
Compared to the same 9 months of last year, the trade turnover between the United States and Canada declined by almost 12% (or $57.5 billion), and alternatively it grew by 4% (or $ 15.7 billion) between the US and China. As a result, 15.5% of the total foreign trade of the United States is accounted for by China, and 15.3% by Canada.
China has become the biggest trade partner of America, according to US's Department of Commerce https://t.co/xpcMrieP93— CCTVNEWS (@cctvnews) November 9, 2015
Mexico, the southern neighbor of the US, secures the third place. First nine months of last year the trade volume between two countries amounted to $398.1 billion, in the same period of this year, it slightly fell to $397.5 billion.
US exports to China are still much lower than its imports: only $84 billion against $357.5 billion. Thus American trade deficit went up to $273.5 billion (against $252.3 billion last year).
From North to South
Analysts draw parallels between the drop of Canadian position as a US trading partner with falling oil prices. The country is the fifth largest world oil producer, and the great part of it is exported to the US via pipelines or railroad tank cars. For example, according to the National Energy Board (NEB), state Canadian Energy Agency, in 2014 the country extracted around 600,000 cubic meters of oil (3.75 million barrels) per day. 2014 export figures totaled 453,660 cubic meters (2.85 million barrels) per day, where American share amounted to approximately 2.77 million barrels of oil daily, or 97% of the total oil exports.
Canada's crude oil exports reached a record high in January: 3.11 million barrels per day. According to the US Energy Information Administration (EIA), the volume of the export has been growing steadily since 1981 and at the end of 2015 it remains around a historic high — more than 3 million barrels of oil per day.
Canada managed to maintain its supply package, but falling oil prices pull down its export earnings. According to NEB calculations, although from January to May 2014 revenue from export sales of crude oil reached $39 billion, it fell to $24 billion over the same period in 2015.
"It's completely an oil story," told Bloomberg Jacob Oubina, senior US economist at RBC Capital Markets LLC in New York. “In nominal terms, yes, the trade with China overtakes Canada, but in real terms, it’s very different. It’s not economic activity or output. It’s a price story all the way.”
David Watt, analyst with HSBC Canada is less optimistic. He said in an interview with the Canadian Globe and Mail: " It's necessary to realize our capabilities when thinking about US market. We are not a dominant trade country, as before. The market share we lost to China, won't be regained. Perhaps losing to Mexico can't be regained as well. "
Long distance partner
The 2015 trade turnover between the US and Russia has declined significantly. From January to September last year, the United States delivered to Russian goods and services for the sum of $8.2 billion, and purchased for $18.9 billion ($27.1 billion turnover). Over the same period this year, the volume of US exports to Russia totaled $5.3 billion, while imports from Russia — $13.4 billion. The total turnover for the first nine months was $18.7 billion, one third (31%) lower than last year. It is less than 1% of the total US trade, which amounted $2.85 trillion over 9 months this year.
Only in September 2015, US exports to Russia amounted to $471 million, while imports from Russia — $1.15 billion. The previous year the figures were $712 million and $1.83 billion respectively. In mid September 2014, the US imposed extended sectoral sanctions against Russia, restricting our bilateral cooperation in the banking, oil and military sectors.