The U.S. trade deficit with China fell last year to its lowest in over a decade. This looks, at first glance, like a decoupling of the two economies thanks to the steep tariffs President Donald Trump slapped on Chinese imports in 2018.
Trump is spoiling to finish the job, floating a 60%, or higher, tariff on all Chinese imports if he’s re-elected this fall.
The U.S., though, hasn’t kicked the Chinese import habit as much as the data suggest. Chinese and Western manufacturers have found numerous ways around tariffs; they are likely to redouble those efforts if the levies go higher.
Last year, the overall U.S. trade deficit in goods shrank to $1.1 trillion from $1.2 trillion in 2022, the Commerce Department said Wednesday. As a share of gross domestic product, it fell to 3.9%, the lowest in over a decade.
Most of the reduction came via the gap with China. This dropped by more than $100 billion to $281 billion last year, the lowest since 2010.
The Wall Street Journal
