US trade deficit with China has dropped since Donald Trump launched trade war
- The trade in goods deficit with China fell to US$310.8 billion in 2020, down from US$419.5 billion in 2018, when the tit-for-tat trade action started
- China speeds up purchases of American soybeans and other agricultural goods
The 26 per cent drop in the bilateral trade gap over two years compares with a more modest 10 per cent decline since 2016, when Trump was campaigning for the White House with a pledge to reverse US deficits with China and the rest of the country’s major trading partners with aggressive policies.
America’s overall trade deficit in goods rose 3.8 per cent since 2018 to US$904.9 billion, and by nearly a quarter since Trump took office as the European Union, Canada and other trading partners fought back against the US leader with countermeasures, including punitive tariffs on US aluminium, steel and other commodities.
The coronavirus pandemic accounted for some of the increase in the overall deficit over the past year. For example, US civilian aircraft exports dropped by nearly two thirds, to US$16 billion in 2020 from US$44 billion in 2019.
China’s agricultural purchases made “foods, feeds and beverages” the only category in Friday’s US Census Bureau report to show an improvement in overall trade in 2020 on an annual basis, with exports rising 6.6 per cent to US$140 billion. All other categories in the report fell against 2019 by as much as 16 per cent.