Here’s the results from the U.S. trade war with China:
The US industry deficit with China has shrunk by around 15%.
The U. S. deficit with the world is larger, about 60%, or 4 times more.
It’s like a terribly bad game of Whac-A-Mole. A little like that.
While I looked at the impact of 25% tariffs on Mexico and Canada after Trump promised them before taking office and yesterday promised they would go in place on Feb. 1, this is a closer look at China.
China has been subject to heavy price lists since 2018, imposed during Trump’s first term and maintained during former President Joe Biden. One explanation was to assume the industry’s deficit. Another solution was to penalize China for its lack of fair play.
As mentioned, before the industrial war, the United States’ deficit with China was over 15%. Here’s a look at the deficit with other major trading partners:
Mexico, up more than 160%;
Canada, more than 500%;
South Korea, up more than 120%;
Taiwan, more than 400%;
Vietnam, up more than 275%;
Ireland, 150% more.
The U.S. deficit with India is up about 80%, with Italy, 53%, Germany, a relatively modest 29%.
Before we take a closer look at the 10 most sensible U. S. imports from China and what has happened to them since the start of Trump’s first term, a quick note:
While I don’t fault Trump or anyone else for disrupting the status quo or trying new solutions to old problems, it’s not entirely clear how his new proposed Foreign Revenue Service, as he is calling it, will change anything.
Revenue from customs tasks would continue to be returned to the US Treasury, as has been the case recently. The only question is where in the source chain the prices are paid, not who will ultimately foot the U. S. tax bill. Most economists would posit that it is the ultimate consumer, you and me, i. e. those with the lowest disposable income.
So, again, the U.S. trade deficit with China has fallen since 2016, the last full year of data before Trump entered the White House, from $346.83 million to what I expect to be slightly less than $300 million when annual statistics are released in early February.
However, the U. S. deficit with the world rose from $735. 33 trillion to just $1. 2 trillion, which would be a record and the fourth consecutive year above $1 trillion.
And, of course, it’s not just about Trump. The era in question includes the tenure of former President Joe Biden, who kept the price lists in place.
Now that the political class is in lockstep that tariffs deliver for the American people, who are still reeling from nasty inflation, likely caused by excessive Covid-19 spending but not helped by the tariffs, a closer look at the top 10 U.S. imports from China in 2017, before the beginning of the trade war.
I note that the top 10 imports that year accounted for 40. 38% of all imports from China that year, a year in which China imported in over 1,100 categories (at the four-digit level, for the industry professionals). industry). strong sampling.
It’s also worth noting that once you take a look at the information below, you probably strongly suspect, like many others, that there are games with “rules of origin” labels for those imports, or at least that the totals They refer to a limited final meeting in some of those countries, especially in Asia. The adjustments are quite dramatic.
Given the graph on the right, I’ll focus on where those U. S. imports from China are going and how few of them actually moved into Mexico, what’s called “quasi-shoring. “
To compare apples to apples, I will now rely on the accumulated knowledge of the first 11 months of each year mentioned, since this is the maximum recent knowledge that will be had by 2024.
Vietnam has gained the most in the category that includes cell phones as China’s market share has … [+] dropped from 63%. Thailand and India have also seen gains. Mexico’s market share decreased slightly.
So, in the end, the tariffs in place, supply chains were seemingly disrupted. Although, for the most part, China’s losses in market share were swooped up by Vietnam most often but also Taiwan, Cambodia and others.