The U.S. trade deficit with China is on track to fall to its lowest in a decade. This looks, at first glance, like a decoupling of the two economies thanks to the steep tariffs President Donald Trump slapped on Chinese imports in 2018.
Trump is spoiling to finish the job, floating a 60%, or higher, tariff on all Chinese imports if he’s re-elected this fall.
The U.S., though, hasn’t kicked the Chinese import habit as much as the data suggest. Chinese and Western manufacturers have found numerous ways around tariffs; they are likely to redouble those efforts if the levies go higher.Last year, the overall U.S. trade deficit shrank to $1.1 trillion from $1.2 trillion in 2022, according to preliminary data from the Commerce Department.
As a share of gross domestic product, it fell to 4%, the lowest in a decade.
Setser predicts that China, to make up for lost exports to the U.S., would drive down its currency to boost exports to countries that haven’t raised tariffs—expanding Chinese companies’ presence in those economies.
Of course, the U.S. could try to keep those imports out by hitting other trading partners with tariffs. Trump has proposed a 10% levy on all imports, not just from China.
This, though, is a recipe for the decoupling of the U.S. not just from China, but the whole world.
We should place 600% tariffs on Chinese goods until China comes clean about the disease from Wuhan. Anyone doubting where it came from should read Nicholas Wade's recent (1/26/24) article in the City Journal (also available via RealClearPolitics).
@Patriot-#1776Constitution3mos3MO
No, this will raise prices of many commodities that Americans purchase significantly, further causing economic turmoil that already exists under Biden and making life worse for millions of Americans, who will have to spend more to get the same items. And if they are spending more for the same items, they have that much less money to invest in gold, stocks, real estate, etc, buy houses, buy cars, and employers will have less money to hire people, create jobs, dream up new products, and expand their businesses. By hurting China through tariffs we hurt ourselves – and on top of that tariff… Read more
@FreedomChoughRepublican3mos3MO
The best way to bring home more manufacturing jobs back to US and to reduce federal deficit is to impose a 10% customs duty on all imports. But it is just another way of taxing American. Low income households will bear a disproportional impact.
@WeaverJoeGreen3mos3MO
What Americans can do in general is quit being over-consumers of cheap Chinese goods that quickly end up in our landfills.
@TautC0nstituti0nDemocrat3mos3MO
I’ve implemented my own tariff on China by deciding not to buy Chinese products when possible. Yes it costs me a little more and I realize my meager effort has little Impact on the CCP but if this approach caught on in the US it would increase our leverage without requiring government action.
@Bip4rtisanClaraLibertarian3mos3MO
So China is our enemy and threatening us? I don’t see China with 400 military bases surrounding my country with its ships and planes running up and down my coast with offensive and nuclear weapons?
During the last 23 years, the US has invaded 9 Muslim countries and murdered 11 million Muslim and we say China is racist against the Muslims?
@9JRBDM6Independent3mos3MO
The US being racist against Muslims does not mean China is not also racist against Muslims - especially given they have committed genocide against Muslim populations in their country https://en.wikipedia.org/wiki/Uyghur_genocide.
@Patriot-#1776Constitution3mos3MO
How can you be racist against a religion? Religion has nothing to do with race.
@9JS2LSQ3mos3MO
I don't really listen to the news
@9JRRB833mos3MO
I think that it’s just very unlucky for them having to go through all the bad and freezing weather
@9JR4DCL 3mos3MO
it gives fake and news you want to hear
@9JR8BJZ3mos3MO
The US should be controlling china and not the other way around.
@NurturingOtterRepublican3mos3MO
We have strangled our manufacturing sector with rules and regulations that makes it very expensive to make it here. The story of US Steel is a prime example of this idiocy. Now this premier manufacturing company is being sold to the Japanese. Unless Washington reinvents itself this will continue and we will have to buy everything from somewhere else.
@9JRB4K43mos3MO
low rate of U.S. domestic savings by households, firms, and the government relative to its investment needs.
@9JR6P663mos3MO
Seems like its important and can cause something unwanted to happen.
A lot of words spent of saying trade with China is not reduced. The data shows otherwise.
Do we really believe that items manufactured in Vietnam, India, Indonesia, and Mexico are really from China?
We citizens do need to continue to examine where products are made and choose products that are not made in China. I do with every purchase.
@ISIDEWITH3mos3MO
Given the trade deficit decline, how do you feel about the potential of more 'Made in USA' products, which might cost more but could support local jobs?
@Patriot-#1776Constitution3mos3MO
It wouldn't support local jobs if it cost more, because all the extra money we'd be paying for the products would be money that could have been otherwise used to expand employment and business – it's a dangerous myth that tariffs benefit employment, they, like all taxes, hurt it.
@9JR8HH53mos3MO
That would be fantastic!
@ISIDEWITH3mos3MO
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