Trade Deficit Falls & US, China Trade Talks Continue


money trade deficit U.S. China

Picture: Money! by Tracy O via flickr

The numbers are in from the U.S. Department of Commerce’s Bureau of Economic Analysis for March, revealing a drop in the U.S. trade deficit after six consecutive months of increase.

When Donald Trump was on the campaign trail to become president of the United States, he promised to turn around the U.S. trade deficit. He clearly wanted to increase U.S. production and exporting to the point of it exceeding U.S. importing.

Then presidential candidate Trump talked about outsourcing as something that is hurting, even destroying, American manufacturing.

Trump spoke of imposing tariffs to protect American jobs before becoming president, and over the last months, we’ve been watching the now president announce tariffs that have sparked fears of trade war around the world.

Of course, his goal is the same one he talked about before becoming president of doing away with the huge U.S. trade deficit.

While there is certainly a great deal of debate about whether or not a trade deficit is actually a bad thing for a country, there is no debating that President Trump thinks the deficit is a bad thing and is willing to impose whatever tariffs he thinks are necessary to turn it around. Or at least threaten whatever tariffs he thinks necessary to make other countries negotiate better trade deals with the U.S.

Therefore, there’s little doubt that the Trump administration is happy to hear the news that a dent was made in the deficit in March.

Hailey Desormeaux reported the numbers in American Shipper:

The U.S. trade deficit tumbled from $57.7 billion in February to $49 billion in March, fueled by an increase in exports amid a drop in imports, data from the U.S. Department of Commerce’s Bureau of Economic Analysis revealed.

U.S. exports reached $208.5 billion in March, ticking up 2 percent from February, while the nation’s imports totaled $257.5 billion, down 1.8 percent.

Of course, $49 billion is still a great deal of money, and it would take an awful lot to get rid of that deficit altogether.

However, as my workout program says in one of its taglines, “Progress is progress, no matter how small.”

And President Trump is sure to point to March’s numbers as progress in his fight against the deficit, and more specifically, the trade deficit with China.

A significant amount of the trade deficit decline in March was from a decrease in the trade deficit with China.

“The trade deficit with China during the month fell 11.6 percent from February to $25.9 billion,” Desormeaux wrote.

China is where much of President Trump’s focus has been when it comes to balancing trade. Tariff threats and moves between the two countries over the last few months have gotten intense, but also led to urgent negotiations happening between the countries right now.

Last week, a U.S. delegation was in China for trade negotiations.

There were no announcements of a breakthrough in the talks. Such a breakthrough is not to be easily come by as President Trump is seeking a $200 billion decrease in the U.S. deficit with China by 2020.

That $200 billion number makes the March drop of $8.7 billion (to the overall U.S. deficit, not just the one with China) look pretty small.

The talks between the U.S. and China will continue next week when Beijing’s top economic advisor, Liu He travels to Washington for round two of negotiations, as reported by Financial Times.

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