If US President Donald Trump is assessing how his import tariffs on billions of dollars worth of Chinese goods have impacted the US trade balance with China, he can look to data from both nations’ statistics bureaus that definitively show the US trade deficit with its largest trading partner has grown wider than ever over the past 23.5 months.
The value of Chinese goods and services purchased by Americans was $323.3 billion greater than the value of American goods and services bought by Chinese in 2018, according to the Chinese Customs Administration and National Bureau of Statistics of China. That’s a surge of 17 percent in 2018, the International Business Times reported Wednesday. According to the US Census Bureau and US Bureau of Economic Analysis, the US ran a $344 billion trade deficit with China in 2018, though data from December has yet to be published.
While a trade surplus has favored Beijing since 1985, the US annual trade deficit as measured by China’s exports to the US minus the value of American goods imported to China is now growing faster than ever, the IBT report noted.
On January 4, the Office of the US Trade Representative (USTR) announced that six senior officials from the Department of Agriculture, Department of Energy, Department of Treasury, Department of Commerce and the USTR itself had formed an official delegation to discuss trade with their Chinese counterparts starting January 7.
Higher interest rates in the United States as compared to interest rates globally are pushing the US dollar exchange rate higher, and “this is why we may get a larger trade deficit,” former Federal Reserve Chair Janet Yellen said at a conference in Beijing in November. A stronger dollar tends to make US exports more expensive for other countries to purchase and ultimately leads them to buy less of those exports.
Yellen was chair of the Board of Governors of the Federal Reserve System from 2014 until 2018, when Trump appointee Jerome Powell took the reins.
“I do not see unfair trade practices in China, or anywhere in the world, as what is responsible for the US trade deficit,” Yellen said through video link, Bloomberg reported. “The US trade deficit reflects the fact that Americans spend more than we produce, and we import excess goods and services from the rest of the world to satisfy that demand,” she said.
Simultaneously, the People’s Bank of China has been a “homegrown factor” pushing the Chinese yuan exchange rate downward, the former US central bank chair said.