Why West Virginia Has a Big Trade Surplus with China (And That’s Not the Answer to Its Problems)

The U.S. had a $1.1 trillion trade deficit in 2021. With China alone its deficit was $355 billion. 

West Virginia, however, had a $1.1 billion surplus with China, according to Trade Data Monitor. (Full disclosure: I work for TDM.) The state’s total trade surplus with the 147 countries it did business with was even higher, $2.6 billion. In 2022, West Virginia is on pace to register an even higher trade surplus of $3.3 billion.

The reason, of course, was coal, its top export. West Virginia ramped up coal exports 86% to $2.6 billion in 2021 from $1.4 billion in 2020. The biggest coal customers were China, Ukraine and India. Part of the increase was due to rising prices. By quantity, coal exports rose 37% to 19.9 million tons from 14.5 million tons.

Pocahontas Coal Plant — in Eastgulf, Raleigh County, West Virginia.

After increasing during the first two years of the Trump administration, West Virginia coal exports actually declined under Trump, to 14.5 million tons in 2020 from 36.7 million tons in 2018. 

Although environmental policies have curbed the use of coal, it’s still plentiful and cheap enough to function as a swing supply source for power companies in Europe and China. And West Virginia still produces the high-grade coal that’s used to make the steel essential for cars and appliances. (That’s why China, Ukraine and India, all major steel producers, have been such good customers.)

West Virginia’s next biggest exports in 2021 were plastics ($1 billion), machine parts ($896.9 million), and organic chemicals ($247 million).

The surplus is, in large part, a consequence of industrial supply chains, and West Virginia is still part of many of them. Toyota, for example, has a factory in Buffalo, WV. West Virginia’s top imports were machinery and machine parts, car parts (mostly from Japan), organic chemicals, and cars.

The consumer goods imported from China and other Asian countries that West Virginians buy at Walmart, the state’s top employer, and other retailers, are imported into the U.S. via California and other states with ports, and are shipped by truck to West Virginia. They’re usually not counted as West Virginia imports. If they were, it’s possible West Virginia would not have a trade surplus.

In a press release last month, governor Jim Justice touted the trade surplus as part of a “rocket ship ride”. But, like other resource-rich economies, West Virginia’s trade surplus illustrates that trade strength alone is not a recipe for prosperity. Countries in Africa, for example, often have huge trade surpluses even if they’re poor.

Coal profits aren’t shared widely with people in West Virginia. Less than 15,000 West Virginians work in coal, in a state with a population of 1.8 million. Coal company shareholders live all over the world.

Our Moundsville film on PBS show how one town was rocked by factors outside its control, including global trade. But, as West Virginia’s trade surplus illustrates, this is a more complicated story than just listing winners and losers. What matters is looking at what’s actually happening to people.

The really good news for West Virginia was buried deep inside the governor’s press release last month: “From 2020 through 2021,” it said, “net migration is up in West Virginia for the first time in decades, with over 2,000 people moving into our state.”

John W. Miller

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s