Trump’s Actions Lead to a Surge in Imports From China

JM Ashby
Written by JM Ashby

Trump increased his tariffs on over $200 billion in Chinese goods from 10 to 25 percent in May and, as a result, our trade deficit with China also exploded in May.

According to a report released by the Department of Commerce this morning, our overall trade deficit with all countries climbed to a five-month high in May and slightly more than economists predicted. Our trade deficit with China specifically also surged by over 12 percent and imports increased by nearly 13 percent; an excessive amount.

Our trade deficit for the previous month was also revised upward.

From Reuters:

The trade deficit surged 8.4% to $55.5 billion. Data for April was revised higher to show the trade gap widening to $51.2 billion instead of the previously reported $50.8 billion. Economists polled by Reuters had forecast the trade gap widening to $54.0 billion in May.

The goods trade deficit with China, a focus of President Donald Trump’s “America First” agenda, increased 12.2% to $30.2 billion, with imports rising 12.8%. Trump imposed additional import tariffs on Chinese goods, after a breakdown in negotiations, prompting Beijing to retaliate.

Our trade deficit with China surged in May as American companies raced to import as many goods as they could before Trump increased his tariffs from 10 to 25 percent.

So, it would be accurate to say that Trump's actions directly led to a surge in sales for Chinese manufacturers.

When the Commerce Department releases a report covering the month of June, I expect we will see our trade deficit with China jump by a similar if not greater amount as companies raced to import more goods ahead of Trump's decision to impose tariffs on an additional $300 billion in Chinese goods.

Trump ultimately decided to delay his tariffs on more Chinese goods, but we didn't know that was going to happen until the last minute. Corporations also didn't know that was going to happen and they've come to understand just as we have that Trump is a loose cannon who could have imposed more tariffs just as easily as he called them off. It was their responsibility to prepare for the worst case.

In a way, Trump has forced American businesses to buy more Chinese goods, not fewer.

  • muselet

    Say what you will about the man, but Trump has been good for business.

    Chinese business, true, but business.


    • muselet

      Somewhat off-topic, but bear with me: In the 1980s, members of the Conservative Party—who seemed to loathe her more than did the opposition Labour Party—went after Prime Minister Margaret Thatcher, accusing her of, quote, “Government by hot flush.” Michael Heseltine, then Minister of Defense, resigned from Thatcher’s government, saying, “No one has finished a sentence in Cabinet for the past three years.”

      Both were unfair potshots at Thatcher (I say that as someone who was emphatically not a fan), but both could be said about Donald Trump with somewhat more accuracy.