False: We have a higher deficit with China now, in 2020, than we did before

By: Kristina Gildejeva
September 30 2020

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The US had a lower trade deficit with China in 2019 when compared to 2018 or since the beginning of the Trump administration. During the 2016 presidential election, one of President Trump’s central planks was to boost the U.S. manufacturing sector and bring down the trade deficit, especially with China. On being elected president, Trump resorted to a tariff war with China in 2018 to achieve his campaign promise. Despite the tariff hike on Chinese imports, the U.S. goods trade deficit with China continued to grow in 2018: it increased from $347 billion in 2016 to $375.2 billion in 2017. It reached a record of $419.2 billion in 2018. By 2019, the trade deficit had reduced to $345 billion, roughly the same level as 2016, largely due to reduced trade flows. In 2018, the biggest trade deficits were recorded with China, Mexico, Germany, Japan, Ireland, Vietnam, and Italy, according to Trading Economics. A report published by the Brookings Institution highlighted that while the annual U.S. trade deficit with China decreased in 2019, its overall trade deficit did not. “Trump’s unilateral tariffs on China diverted trade flows from China, causing the U.S. trade deficit with Europe, Mexico, Japan, South Korea, and Taiwan to increase as a result,” it stated. So far this year, the trade deficit in goods with China is less than last year’s levels, as per data from the U.S. Census Bureau. Still, the overall trade deficit has gone up due to rising deficits with other countries. The Associated Press reported that the U.S. trade deficit surged in July to $63.6 billion, the highest level in 12 years, as imports jumped by a record amount. “The July deficit was 18.9% higher than the June deficit of $53.5 billion. It was the largest monthly deficit since July 2008 during the 2007-2009 recession. Despite several high-profile trade battles and a renegotiation of the North American Free Trade Agreement with Canada and Mexico, America’s trade deficits have remained stubbornly high. For July, China's deficit in goods totaled $31.6 billion, an 11.5% increase from the June imbalance. The goods deficit with Mexico hit a record high of $10.6 in July billion,” it said.