The U.S.-China Trade Deficit is Growing

The trade war between China and the U.S. has been dragging on for over a year now. In the beginning of August, U.S. President Donald Trump announced he would put a levy on all Chinese imports in the future. The date now being given for this last round of tariffs is Dec 15, even though some of the new tariffs will kick in by Sept 1, as originally announced.

The first wave of duties mostly affected aerospace, IT and medical equipment. The second wave included many metals and chemicals as well as some everyday consumer goods and food products like meat and fish, while the third round of tariffs rounded up all remaining types of merchandise.

Meanwhile investors and economists are worried this escalating trade war will profoundly impact the global economy while politicians are watching Sino-U.S. relations undergo a profound readjustment.

Tensions between the U.S. and China are definitely running high. But how has Donald Trump's confrontational attitude affected trade with China? For many years, China has sold more to the U.S than vice versa, resulting in a U.S. trade deficit with China. In fact, that trade deficit has been growing larger despite the sanctions (and retaliatory measures that were taken). The H1 2019 balance is already at US$-222 billion in favor of China opposed to US$-375 billion for the full year of 2018, with the holiday quarter still ahead.