US Trade Deficit in Goods With China Spikes 30% Despite Trump Tariffs

US Trade Deficit in Goods With China Spikes 30% Despite Trump Tariffs

The United States trade deficit in goods with China spiked nearly 30% in April despite President Trump’s claim that tariffs on the country would decrease the deficit.

Trump repeatedly complained about the US trade deficit, which simply shows the gap between products imported and those that are exported. He bragged that his tariffs would reduce the trade deficit.

According to data released by the Commerce Department on Thursday, the trade deficit in goods with China spiked by nearly 30%, or about $26.9 billion, in April even as the overall trade deficit -- which includes trade with other countries and also includes services -- narrowed by about 2%.

The numbers are from just before Trump escalated his trade war on China in May. He has since threatened to impose even more tariffs on China, as well as Mexico.

Exports, imports both tumble:

The data shows that both American exports and imports fell in the first quarter of this year.

“Exports fell the most in three years, partially reflecting lower demand for civilian aircraft following the worldwide grounding of Boeing Co.’s 737 Max model, though the decline in shipments abroad was broad-based. A narrower deficit overall will add to economic growth and allow Trump to claim some victory on pledges to reduce the gap, though it’s come at a cost to American companies that have lost export business or are paying higher prices,” Bloomberg reported.

Trump tariffs cause uncertainty:

Brett Ryan, a senior U.S. economist at Deutsche Bank AG, pointed to the uncertainty around trade policy as a big reason for the fall of imports and exports.

“The shifting policies are really making it difficult for businesses to try to plan ahead and try to get their supply chains in order, and it’s most evident in these big fluctuations that you’re seeing in imports and exports on a monthly basis,” he told Bloomberg.

When trade drops on both sides, he added, “everybody loses.”

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