Falling exports to China have hurt US businesses and employment, while the loss of Chinese customers could leave lasting damage, according to a new report from the US-China Business Council.

The report, released on Monday, found that the United States' goods exports to China fell 26 percent, or $36.3 billion, last year, the steepest single-year decline in recent history. It attributed the downturn to tariffs, particularly those affecting agriculture and fossil fuels.

Exports to China supported about 148,000 fewer US jobs than a year earlier, with losses reaching across regions and industries. From coastal communities to rural areas, and from technology to agriculture, few "were spared from the economic pain", the report said.

Texas, California, Louisiana and Indiana recorded the largest declines in export value, each losing billions of dollars in sales to China.

Agriculture-dominated heartland states suffered the most severe percentage declines. Exports from Indiana fell 43.6 percent, while Illinois and Texas recorded declines of 37.7 percent and 32.9 percent, respectively.

Oilseed and grain exports fell 78.1 percent to their lowest value in a decade. Soybean growers lost $9.2 billion in sales to China but offset only $1.5 billion through exports to other destinations.

Meanwhile, China bought significantly more soybeans from Brazil and Argentina, reinforcing a pattern of declining US market share that began since the trade tensions in 2018, the report said.

China announced tariff reductions on agricultural imports from the US last month, but soybeans were excluded from the initial relief. The report said Chinese soybean purchases were unlikely to return to their 2016 peak.

The council warned that the consequences could outlast the tariffs as Chinese buyers establish relationships with other suppliers.

"Once markets are lost, they are hard to regain," the report said.

US energy exporters face a similar challenge, with oil and gas exports to China falling 66.9 percent last year, and the number of jobs they supported dropping by about two-thirds.

Even if the two countries reach an energy agreement, the report said, the trade tensions have accelerated China's efforts to diversify its energy sources and suppliers, potentially reducing long-term demand for US supplies.

Exporters also faced higher costs at home because of tariffs on Chinese goods. The council estimated that US companies and farmers paid an additional $86.6 billion in tariffs on imports from China, including critical inputs.

The report saw "bright spots" in some industries. Aerospace exports to China rose 37.3 percent to $15.9 billion, while semiconductor and component exports increased 8.4 percent to $11.4 billion.

Those gains, however, were insufficient to offset the losses associated with the broader export decline. "Moreover, there has not been a meaningful increase in manufacturing sector jobs since 2024, the original rationale for US tariffs," the report said.

Growth in semiconductor shipments also coexisted with pressure on advanced chip manufacturers from US export restrictions and China's drive for greater self-sufficiency.

Licensing procedures

A separate report by the US-China Business Council released in August examined how licensing procedures and export controls were affecting US exporters.

Based on a July survey of 31 companies, primarily in technology, manufacturing, energy and healthcare, it identified lengthy licensing reviews, unclear procedures and limited engagement with export control agencies.

The council said these delays were creating opportunities for competing suppliers. "Monthslong license delays are costing the United States billions in exports and eroding American market share globally," the report said.

Among respondents, 71 percent reported delays in obtaining licenses to export to China, while 82 percent said their pending applications covered products with comparable alternatives available from non-US suppliers, and this allowed their competitors to fill the gap.

Despite the overall downturn, China remained the third-largest US export market, said the October report, which covers goods exports and excludes services.

Citing the stakes for businesses, farmers and consumers, the council urged both countries to use trade negotiations to reduce barriers.

"American companies need lasting tariff relief from both governments," the report said.

Contact the writers at liazhu@chinadailyusa.com