Current Events > Trump has INCREASED our trade deficit with China .

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(Jan. 13) U.S. President Donald Trump famously tweeted that trade wars are good, and easy to win in 2018 as he began to impose tariffs on about $360 billion of imports from China. Turns out he was wrong on both counts. Even before the coronavirus infected millions of Americans and sparked the steepest economic downturn since the Great Depression, China was withstanding Trumps tariff salvos, according to the very metrics he used to justify them. Once China got the virus under control, demand for medical equipment and work-from-home gear expanded its trade surplus with the U.S. despite the levies.

While trade tensions between the worlds two biggest economic powers didnt start under Trump, he broadened the fight with the unprecedented tariffs and sanctions on technology companies. The tougher approach, according to the scorecard that follows, didnt go as he hoped. But hes leaving his successor Joe Biden a blueprint of what worked and what didnt. China is too big and too important to the world economy to think that you can cut it out like a paper doll said Mary Lovely, an economics professor at Syracuse University. The Trump administration had a wake-up call.

The U.S. Trade Deficit Grew
Trump vowed in his 2016 election year to very quickly start reversing the U.S. goods trade deficit with China, ignoring mainstream economists who downplay the importance of bilateral deficits. However, the deficit with China increased since then, hitting $287 billion in the 11 months to November last year, according to Chinese data. The deficit did fall year-on-year in 2019, as U.S. companies switched to imports from countries like Vietnam, but it remained higher than the $254 billion gap in 2016. That was partly because Beijings imposition of retaliatory tariffs on about $110 billion in goods reduced its imports of American products, and these only started recovering in the last few months of 2020.

As part of the phase-one trade deal signed a year ago, Beijing made an ambitious vow to import $172 billion worth of U.S. goods in specific categories in 2020, but through the end of November it had bought just 51% of that goal. The slump in energy prices amid the pandemic and the problems with Boeing Co.s planes played a part in that failure. The persistent deficit demonstrated how reliant companies are on Chinas vast manufacturing capacity, which was highlighted again by the pandemic. China was the only country capable of increasing output on a big enough scale to meet surging demand for goods such as work-from-home computers and medical equipment. President Xi Jinping expressed his confidence in Chinas rise Monday, telling officials that time and the situation are in our favor. The Chinese leader said that he saw opportunities in general outweighing challenges, a marked shift from his sometimes dire-sounding warnings of recent months.

Chinas Export Machine Rolls On
Trump repeatedly said that Chinas accession to the World Trade Organization in 2001 caused its economy to take off like a rocket ship, a result he viewed as unfair. As it turned out, Trumps trade war with China coincided with another expansion in Chinese exports. After shrinking for two straight years in 2015 and 2016, Chinas total shipments grew each year after Trump took office, including in 2019 when exports to the U.S. fell.

A group of 10 Southeast Asian nations replaced the U.S. as Chinas second-largest trading partner in 2019. The shift to Asia is likely to continue as Southeast Asian economies are projected to grow faster than developed countries over the next decade. Those trade links will be further cemented by the Regional Comprehensive Economic Partnership pact signed late last year, which will see 15 regional economies gradually drop some tariffs on each others goods.

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ironically the tpp probably would have done more to reduce the trade deficit with china than an explicit tariff-driven trade war

not that i advocate it though; just a thought

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ImAMarvel posted...

Source, OP? I'm not surprised. Trump is a TERRIBLE businessman.

https://www.bloomberg.com/news/articles/2020-01-15/the-u-s-china-war-over-trade-and-tariffs-explained-quicktake

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But I was told that trade wars were easy to win!

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He's such a shitty businessman lol
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Beijing Don!

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Trump lied about literally every single thing, this shouldn't be too surprising

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I'm... I'm tired of winning.

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wtf did he do anything good?

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nfearurspecimn posted...

wtf did he do anything good?

Not at all

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I totally forgot about the trade war once COVID hit, I guess that's one way to affect an economy

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