How Trump Improved the Balance of Trade With China

Mish

Two pictures explain a reduced goods trade deficit with China.

Trade War Shift Followed By Covid

Recessions tend to reduce trade deficits. Notice the impact of the Great Recession and again now. 

2019 is the key year. Notice that Trump reduced the trade deficit with China from $418.95 billion to $345.2 billion. That's an improvement of $73.75 billion.

However, the trade deficit from top partners rose from $848.52 billion to $864.24 billion. That's an overall worsening of $15.72 billion.

US Balance of Trade China Mexico Vietnam

US Balance of Trade China Mexico Vietnam 2020-10

2018 to 2019 Synopsis 

  • The trade deficit in goods with China improved from $418.95 billion to $345.2 billion. That's an improvement of $73.75 billion.
  • The trade deficit with Mexico, Taiwan, and Vietnam rose by $47.07 billion. 
  • The overall trade deficit (17 nation total including China) rose by $15.72 billion.

Chart data is from usatrade.census.gov. 

The data shows that all Trump managed to do is shift the trade deficit from China to other nations led by Mexico, Taiwan, and Vietnam.

The Covid recession further reduced the trade deficit pretty much across the board as recessions tend to do.

China Trade Surplus Hits Record High in November

Note that China Has a Record Trade Surplus in November as exports surged.

Data from the Census Department is through October and does not reflect China's record November surplus.

Trump's Failure

Trump tried to balance the trade deficit with tariffs. It was a fool's mission as explained in Balance of Trade vs Gold Window

Also consider Trump's Unwinnable Trade War: Gold Explains Why

Mish

Comments (16)
No. 1-8
fphowell
fphowell

"All Trump managed to do is shift the trade deficit from China to other nations led by Mexico, Taiwan, and Vietnam."

How much has this cost Americans via tariffs and what are the benefits?

Soft_coding
Soft_coding

Mish, I think The Street messed something up. Going directly to your link takes me to a error page on multiple devices.

njbr
njbr

...Mexico, Taiwan, and Vietnam...

Hmmm, one inquiring mind wants to know how much transhipment and relabeling is a part of this deal.

Another inquiring mind wants to know how much of the ownership of these third country buinesses tracks right back to China.

There are many incentives to deal with the same people but end up with a different "made-in" label.

njbr
njbr

Bill Kristol
@BillKristol
·
1h
"Trump administration officials passed when Pfizer offered in late summer to sell additional doses of its Covid-19 vaccine...Now Pfizer may not be able provide more of its vaccine to the U.S. until June because of its commitments to other countries..."

Johnson1
Johnson1

Everyone usually says Trump failed with China and the tariffs only hurt U.S. citizens. I have to say at least he tried? From what I can tell he is the only president that really gave it a try and tried to stop China's unfair trade tatics. I did read some U.S. companies diversified their supply chain to other countries....so China had to take a little hit. I cannot remember the person name was but when Trump started the trade war, he commented that China has been in a trade war with the U.S. for 20 years and we do not know it.

I guess the other option is to just give up and say we cannot beat China. Every president has lost the import/export game with China since they opened their border. They still steal designs, IP, software, etc. I have some friend who design logos for hats, t-shirts, pillows, and sell on Ebay, Amazon, and Etsy. Their designs get copied within a week and sold at lower prices with a shipping address in China. They are pretty much ready too give up.

70% of our GDP is services so I guess we do not need manufacturing? We can all be either Starbuck Baristas, Uber Drivers, etc.

I told a twenty something family member the best job to get long term is a government job....at least you will get paid more than the average public job and get a pension.

Felix_Mish
Felix_Mish

As an alternative to trans-shipment, there is always something like this:

Made in USA!

anxientok.mueir
anxientok.mueir

A


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