“the deficit in exports versus imports from China shrank to $345.6 billion, down about 18 percent from a record high level of $419.5 billion in 2018.
But the U.S. trade deficit in manufactured goods with all countries was relatively unchanged in 2019 at close to $1.048 trillion because importers turned to other nations after Trump hit China with tariffs ranging from 10 percent to 25 percent.
Some of the beneficiaries of that shift included Mexico, Vietnam, Taiwan, South Korea, Japan and members of the EU.
The trade deficit with the EU hit a record $177.9 billion in 2019, while the gap with Mexico was a record $101.8 billion”
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“tariffs Trump has imposed on approximately $370 billion worth of Chinese goods have increased costs for U.S. manufacturers”
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“That helps explain both the slowdown in U.S. manufacturing output and slight decline in the manufactured goods trade deficit in 2019”
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“The U.S. usually runs a surplus in agricultural trade. However, that surplus shrank to $23 billion in 2019, from $26.5 billion in 2018, at least partly because of the retaliation that China and other countries on American exports imposed in response to Trump’s tariffs.”
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“One bright spot in the trade report is the sharp drop in the oil and gas trade deficit, which fell to $29 billion in 2019, from $69.5 billion in 2018, because of increased U.S. production and exports.
The oil and gas trade deficit reached as high as $317 billion in 2008, but has fallen steadily over the past decade because of new production techniques.”
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“Trump still is mistaken to believe that the trade deficit is driven primarily by unfair foreign trade practices or bad trade deals, economists point out. Instead, other factors, such as the size of the U.S. budget deficit and the strength of the U.S. economy play a much bigger role in dictating trade flows.
“The irony is the stronger the U.S. economy is compared to our major trading partners, like the European Union and China, the more likely it is the trade deficit will go up because we will have stronger demand,” Griswold said. “The vast majority of economists would say that’s perfectly fine, but it does put this administration in an awkward spot.””