Trump’s China tariffs massively backfire as trade deficit smashes record high
President Donald Trump regularly cites the United States’ massive trade deficit with China as a primary justification for his decision to implement tariffs.
However, the Washington Post reports that the United States’ trade deficit with China has only widened since the implementation of tariffs and hit a record-high $34.1 billion, according to Chinese statistics released this week.
“It’s obvious that the immediate effects of the trade war are the exact opposite of what the Trump administration had been planning,” Andrew Polk of Beijing-based research firm Trivium China tells the Post. “We expect the dynamic to change once we get a bit deeper into this, but for now China is trying to outrun the next round of tariffs.”
Julian Evans-Pritchard, an economist at Capital Economics, tells the Post that one reason that China has been able to beat Trump’s tariffs so far is that its currency value has depreciated by more than eight percent since June, which has helped make its products even cheaper abroad, while also reducing domestic demand for U.S. imports.
And Huo Jianguo, a trade expert at the Center for China and Globalization in Beijing, tells the Post that Trump might want to rethink his trade strategy when he sees that the trade deficit with China has only widened under his watch.
“He won’t be happy with these figures but it proves that tariffs don’t help curb exports,” he said.