Trump pledged to narrow the US trade deficit with China, which Washington put at $375.2 billion last year, a record for any country.
U.S. goods and services trade with China totaled an estimated $648.5 billion in 2016. Exports were $169.8 billion; imports were $478.8 billion. The U.S. goods and services trade deficit with China was $385 billion in 2016.
China is currently our largest goods trading partner with $578.2 billion in total (two way) goods trade during 2016. Goods exports totaled $115.6 billion; goods imports totaled $462.6 billion. The U.S. goods trade deficit with China was $347.0 billion in 2016.
Given the trade deficit with China, it seems logical that the United States has much more to lose in a trade war with China. Even a 6th grader would recognize that if the United States imposes sanctions on imports from China, the Chineese would do the same on imports from the United States. That means higher prices in China on US goods, and thus American goods would be less desirable in China. If the US imposes higher tariffs on Chineese goods, Americans are surely going to have to pay higher prices for many goods. If American goods have not been competitively priced in the past, the imposition of tariffs by Trump simply ensures that Americans will now have to pay more for the same goods. How is that making America great again?
The worst part of a trade war is that Trump doesn’t understand it. Just last month he tweeted that trade wars are “good” and “easy to win.”
“When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win. Example, when we are down $100 billion with a certain country and they get cute, don’t trade anymore-we win big. It’s easy!”