Global exports to China fell over 5 percent in July, but American exports to China are in free fall as China's trade relationship with the rest of the world remains strong or at least stable.
Exports of American goods to China are falling much faster than Chinese exports to America according to Chinese customs data.
From the Associated Press:
Imports of U.S. goods fell 19% from a year earlier to $10.9 billion, customs data showed Thursday, though that was an improvement over June’s 31.4% fall. Exports to the United States declined 6.5% to $38.8 billion.
Beijing has retaliated for U.S. tariff hikes in a dispute over trade and technology by imposing its own punitive duties and suspending purchases of American soybeans and other goods. [...]
Imports of U.S. goods were down 28.3% in the first seven months of 2019 compared with a year earlier, according to the General Administration of Customs of China.
While shipments to the United States declined, shipments to other parts of the world increased.
July exports rose 3.3% from a year earlier, the fastest since March and more than the most optimistic estimate in a Reuters poll, customs data showed on Thursday. Analysts had expected a 2.0% drop after June's 1.3% fall. [...]
While China's exports to the U.S. continued to shrink in July in the face of stiffer tariffs, shipments picked up to Europe, South Korea, Taiwan and, most noticeably, Southeast Asia (ASEAN).
"It could suggest that some exporters are trying to diversify their export regions, it could also be due to manufacturers' relocations to ASEAN (from China)," said Betty Wang, a senior China economist at ANZ.
These numbers predate Trump's announcement that he will impose tariffs on all remaining Chinese goods beginning on September 1st so exports to the United States could fall further in the months ahead, but these numbers also predate China's decision to completely cut off purchases of American agriculture.
Given that China's decision to stop buying American farm goods will take effect immediately, I think we can expect to see our trade deficit explode during the current month as American companies race to import as much as they can before Trump's next tariffs hit the books. Data for the month of August will not be available until the first or second week of September.
Overall, our trade deficit for the entire year will likely be at or near a record high because consumer spending on foreign goods is still strong but there's no corresponding demand in other nations for American-made goods.
One thing Trump will never be able to reverse no matter what he does is our trade deficit. Even if Trump engineers a recession, that would only reduce our trade deficit, not eliminate it.