Judging from its relentless monthly trade deficits, the United States is losing its trade war with China, which President Donald Trump on March 2, 2018, ignorantly said: "are good and easy to win." The U.S. is also losing its trade war against Mexico.
This mindless phrase has come back to haunt Trump almost every month since then as the combined U.S. merchandise and services trade deficit with China (or the total trade deficit) continues to widen and not contract as Trump falsely claimed it would because of his series of punitive tariffs.
The U.S. merchandise trade deficit alone versus China in 2018 came to a staggering $419.5 billion -- the largest on record and proof that by Trump's own mercantilist standards, he is losing the trade war against China he began 20 months ago. It was a mammoth 21% larger than the $346.8 billion trade deficit in former president Barack Obama's last full-year as president in 2016.
Experts now confidently predict this already mammoth merchandise deficit will post another embarrassing record in 2019. From January to September this year, the overall trade deficit at $481.3 billion is already larger than 2018's total trade deficit. The January to September total is also $24.8 billion larger than the same period in 2018.
Trump is again losing in terms of the total trade deficit. In 2018, the total deficit skyrocketed to $627.7 billion, an increase of $124.7 billion. This deficit is on track to jump even higher for the full-year 2019. In contrast under Obama in 2016, America the total trade deficit in goods and services amounted to $502.9 billion.
Experts said the continuing reduction in the volume of trade since the start of Trump's trade war versus China now means fewer jobs for Americans. Some 11 million Americans owe their jobs to trade with China, according to data from the U.S. Department of Commerce.
The U.S. trade deficit with Mexico is also rising. Mexico is the second-largest source of cars from America's car makers. Some two million American brand cars were assembled in Mexico in 2018 and sold in the U.S.
In 2016, Obama's last year in office, the U.S. trade deficit in goods with Mexico came to $63.3 billion. Under Trump, this deficit jumped 27% to $80.7 billion in 2018. From January to September of this year, our Mexico goods deficit stands at $76.1 billion, meaning this deficit will set a new annual record.
Trump's tariffs have effectively slowed down U.S. economic growth and over time will mean 512,000 fewer jobs than if the tariffs had never been imposed, according to the Tax Foundation, an 82-year-old think tank based in Washington, D.C. that collects data and publishes research studies on U.S. tax policies at both the federal and state levels.
By no stretch of the imagination is the U.S. winning Trump's tariff war against China and mobile phones are a case in point. On the other hand, the "biggest winners from tariffs" are manufacturers "in Korea and Vietnam (which) would see annual export revenues grow by about $1.8 billion and $1.2 billion, respectively," said Trade Partnership Worldwide LLC, international trade and economic consulting firm based in Washington, D.C. "American consumers, on the other hand, would pay over $8.1 billion more for cell phones."
Trade Partnership also predicted a 35% drop in laptop purchases. There is virtually no laptop manufacturing in the U.S.
"American consumers would pay $785 in new out of pocket expenses for each $1 in new revenue for American manufacturers," said Trade Partnership.
