In May 2018, Trump alleged his predecessors for costing the United States (from Bush-I to present) 55,000 factories; 6-million manufacturing jobs; and accumulating trade deficits of more than $12 trillion.
He further said in then-tweet ‘Last year, we had a Trade Deficit of almost 800 Billion Dollars. Bad Policies & Leadership. Must WIN again!’But he LOST in his second year as well and that too by a widest margin.
In the first eleven months of 2018 (January to December), the US trade deficit rumbled to $800.1 billion – with an increase of $65.9 billion and $113.6 billion as compared to 2017 and 2016 respectively.
With December data is yet to be released – the US trade deficit is poised to comfortably transcend last year deficit of $807.5 billion. And terribly for Trump, the US trade deficit with China is more depressing.
Trump has been slating China for ripping the United States in trade and stealing thousands of US manufacturing jobs ever since it entered into the WTO – eventually slapping substantial tariffs on several products from East-Asian nation
In his hardnosed speeches, he frequently professed China as an economic boogeyman and currency manipulator who is competing unfairly with the US and other countries to upturn its exports at the cost of US manufacturing jobs.
He incessantly accused China, Mexico, and some other countries for ‘greatest jobs theft’ in the history of the America – proclaiming that US companies moved jobs to these countries and vowed to bring them back into the US.
BUT to date, the so-called Trump’s rhetoric and punitive actions toward China have produced nothing except sustaining US the-largest ever trade deficits for the two consecutive years of his tenure.
After framing a record trade deficit of $375.6 billion with China in 2017 – the US endured another overwhelming trade deficit of $383.3 billion with People’s Republic between January-November, according to the US Commerce Department.
Although the US imports from China fell by $1.6 billion in November as compared to the same month in the last year but at the same time, its exports to China have also been plummeted by $4.1 billion for November y-o-y.
With an average trade deficit of $34.8 billion per month, the US trade deficit with China is set to significantly exceed $400 billion mark. The mounting trade gaps echoes that against every $1 of goods exported to China, the US imported over $4.4 of goods from China – more than 2017 $1:$3.9 ratio.
Manufacturing jobs – the crux of Trump’s campaign – have however increased by 454,000 during the first two years of Trump administration. According to US Bureau of Labor Statistics, some 190,000 manufacturing jobs were added in 2017 and another record 264,000 jobs were created in 2018.
The United States heavily relies on manufacturing exports. According to IMF, the US manufactures exports accounted for about 80% of its total merchandize exports in 2006 however with the China’s rise, the US manufactures exports shrank to nearly 62% in 2016.
Albeit creation of thousands of manufacturing jobs, in the first eleven months of 2018 – the US imports of manufactured goods increased by $155.9 billion to $2,004.1 billion – partially offset by increase in manufacturers exports to $62.9 billion.
As the US trade deficit with China and its manufacturing exports keeps on mounting despite all bombastic psychological and administrative strokes – Trump might now be forced to soften his antagonistic stance toward China, seeking Chinese succor to earn him a consolation WIN in trade war.