Trump’s Trade Tariffs Backfire ‘Bigly’ As Trade Deficit With China Breaks Record

Screengrab/Shipping TV/YouTube

China's year-to-date trade surplus with the U.S. stands at $225.8 billion.

President Donald Trump’s tariffs on Chinese goods were meant cut back the trade imbalance between the U.S. and China, but at least for now, his tactic isn’t working: China posted a record trade surplus last month.

From The Washington Post:

> Although economists expect the American tariffs to eventually have an impact, the trade statistics reinforce the widely held notion here that there will be no quick end to the trade war between Washington and Beijing.

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> “It’s obvious that the immediate effects of the trade war are the exact opposite of what the Trump administration had been planning,” said Andrew Polk of Trivium China, a Beijing-based economics research firm.

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> “We expect the dynamic to change once we get a bit deeper into this, but for now China is trying to outrun the next round of tariffs,” he said.

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> After imposing tariffs on $50 billion in Chinese goods over the summer, the Trump administration last month added a 10 percent tariffs to another $200 billion of Chinese products, encompassing everything from household items like furniture and toys to industrial equipment. The tariffs are set to rise to 25 percent in January if the trade dispute is not resolved by then, and Trump has vowed to impose tariffs on the remaining $267 billion of Chinese imports.

China’s year-to-date surplus with the U.S. is $225.8 billion, according to data released by the country on Friday — significantly higher than the number at this point last year, which was $196 billion.

> Trump should take notice of the statistics, said Huo Jianguo, a trade expert at the Center for China and Globalization in Beijing.

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> “He won’t be happy with these figures but it proves that tariffs don’t help curb exports,” Huo said. “Both sides need to find a way to talk and make some other arrangements.”

The president, however, has shown no interest in reversing course.

Trump and Chinese President Xi Jinping are slated to meet at the G-20 summit in Buenos Aires next month, which will be the first direct talks since August.

> Trump said Thursday that his tariff strategy was working. “It’s had a big impact,” Trump said in an interview with “Fox & Friends.” “Their economy has gone down very substantially and I have a lot more to do if I want to do it.”

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> But China has been standing firm, repeatedly saying that the only solution was through negotiation and compromise on both sides.

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> Trump’s strategy amounted to “bullying,” said Yu Xiang, director of the division of American economic studies at the China Institutes of Contemporary International Relations.

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> “Bullying might be effective for small economic entities, but it will not be effective against a big economic power,” Yu wrote in a column published Friday in the state-run China Daily. “The fight won't end in the blink of an eye, considering it is between the world’s two biggest economies.”

Read the full report here.

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