Monthly goods deficit with China falls to lowest level in five years
Washington. This morning’s latest report from the Department of Commerce shows that the monthly US goods deficit with China fell to just $20.7 billion in March. That’s the smallest monthly deficit with China since March 2014. The Coalition for a Prosperous America (CPA) sees this as a clear indication that the Trump administration’s tariffs on Chinese imports are having a substantial impact on US trade flows.
“In the face of continuing pressure from multinational interests and the import lobby, President Trump has stayed the course on China tariffs,” said CPA Chairman Dan DiMicco. “To the president’s credit, the tariffs are working. America’s manufacturers and workers are now seeing gains as manufacturing employment rises and China’s hold on the US market shrinks.”
CPA Chief Economist Jeff Ferry examined the new Commerce Department data and found an improvement in the China goods deficit has come largely through a reduction in imports. While US exports to China were $10.4 billion in March—a figure $1.9 billion lower than in March 2018—total imports reached only $31.2 billion, a full $7 billion less than the March total for 2018. As Ferry noted, this is the lowest monthly China import level in five years. Ferry added that, while 2018 imports from China averaged $44.9 billion a month, so far in 2019 they’re averaging just $35 billion—and falling each month.
“The administration’s China strategy is working,” said Michael Stumo, CEO of the CPA. “This is exactly what we were hoping to see when the president applied tariffs on important industries that have been facing heavily subsidized competition from China’s state-owned enterprises. We expect the next round of tariffs to have a positive effect to improve the US economy and address Beijing’s continuing economic aggression.”
CPA publishes an interactive database of US and global trade flows that continues to chart both ongoing trade balances and dollar exchange rate data.