Once again, President Donald Trump is making headlines over trade: Over Easter weekend and on Monday, he took shots at Mexico on Twitter, making incorrect statements about DACA, and threatening NAFTA negotiations.
“Mexico is making a fortune on NAFTA…They have very strong border laws – ours are pathetic,” Trump tweeted on Monday. “With all of the money they make from the U.S., hopefully they will stop people from coming through their country and into ours, at least until Congress changes our immigration laws!”
The North American Free Trade Agreement, or NAFTA, has been one of Trump’s targets since the campaign trail: he has called it a “disaster” and “the worst trade deal in the history of this country.” The Trump administration is currently working with Canada and Mexico to renegotiate the deal, with a focus on trade deficits — which Trump wants to lower.
Meanwhile, on Monday, the Chinese government announced it would “immediately impose tariffs on 128 U.S. products, including pork and certain fruits, a direct response to President Trump’s recent moves to pursue numerous trade restrictions against Beijing,” according to the Washington Post. Tariffs will be placed on U.S. exports of “apples, oranges, almonds, pineapples, grapes, watermelons, cranberries, strawberries, raspberries, cherries,” according to the Post along with pork, scrap aluminum, and potentially other items.
The top U.S. exports to China in 2016 were “miscellaneous grain, seeds, fruit (i.e., soybeans) ($15 billion), aircraft ($15 billion), electrical machinery ($12 billion), machinery ($11 billion) and vehicles ($11 billion).” The top imports from China in 2016 were, “electrical machinery ($129 billion), machinery ($97 billion), furniture and bedding ($29 billion), toys and sports equipment ($24 billion) and footwear ($15 billion),” according to the U.S. Trade Representative.
China has long been Trump’s target in comments about trade. In late March, Trump made remarks and signed a memorandum that instructs U.S. Trade Representative Robert E. Lighthizer to, among other things, “publish a proposed list of products and any intended tariff increases within 15 days of the date of this memorandum,” and after a public comment period, publish a final list and implement any tariffs.
The tariffs could impact “about $50 billion” or “about $60 billion” worth of Chinese goods, according to White House aides and the President respectively. The tariffs will likely be aimed at industries that “benefited from improper access to U.S. technology,” along with those that want to invest in American technology, according to the Washington Post.
The stock market responded to these steps by the Trump administration with a sharp drop. Some critics worry about a trade war with China, while others worry that the financial burden will be passed off to the American consumer.
In 2015, China surpassed Canada as the biggest U.S. trading partner. In 2017, China was third on the list of countries the U.S. exports goods to ($130.4 billion worth); that same year (2017) the U.S. imported $505.6 billion in goods from China, according to the U.S. Census Bureau.
In March 2018, Trump tweeted that he asked the Chinese government to reduce the trade deficit between China and the U.S. by $100 billion.
It’s true that the U.S. runs a large trade deficit every year. In 2017, the overall (not just China) U.S. trade deficit for goods and services was $568 billion, according to the U.S. Census Bureau. That is, the U.S. exported $2.3 trillion worth of goods and services and imported $2.9 trillion worth of goods and services, according to seasonally adjusted figures.
In January of 2018, the U.S. trade deficit reached its highest monthly level in a decade — $56.6 billion — according to Commerce Department data.
Here’s a primer on the basics of U.S. trade – who America trades with, what products the U.S. imports and exports, and which countries the U.S. has the biggest trade deficits with:
These are the biggest U.S. trade partners
The U.S. Census Bureau tracks U.S. imports and exports on a month-to-month basis. These are America’s top trading partners for 2017, ranked by total exchange of goods:
- China – $636 billion
- Canada – $582.4 billion
- Mexico – $557 billion
- Japan – $204.2 billion
- Germany – $171.2 billion
- South Korea – $119.4 billion
- United Kingdom – $109.4 billion
- France – $82.5 billion
- India – $74.3 billion
- Italy – $68.3 billion
- Taiwan – $68.2 billion
- Brazil – $66.5 billion
- Netherlands – $60 billion
- Ireland – $59.6 billion
- Switzerland – $57.7 billion
In 2017, China, Canada and Mexico were the top trading partners with the U.S.; these figures only count goods – products – that cross international boundaries. They do not include the exchange of services, like tourism and financial services.
Mexico is the United States’ third largest trading partner doing a total of $557 billion in goods in 2017, according to the U.S. Census Bureau. The U.S. imported $314 billion in goods from Mexico in 2017 (second only to China in terms of imports). And while, the U.S. had a $71.1 billion trade deficit with Mexico in 2017, the country also imported more goods from the U.S. than any country except Canada: Mexico imported $243 billion in goods (not including services) from the United States last year.
In terms of goods and services, the office of the U.S. Trade Representatives reported that in 2017, “U.S. goods and services trade with Mexico totaled an estimated $616.6 billion.” Total trade with China in goods and services was about $711 billion in 2017; it totaled $681 billion with Canada.
Additionally, the European Union, if taken as a whole, would be the biggest U.S. trading partner – by far. Total trade in goods and services with the EU topped more than $1.1 trillion in 2016, according to the U.S. Trade Representative.
What country does the US have the largest trade deficit with?
Here are the U.S. Census Bureau’s 2017 figures for the countries that the U.S. has the biggest trade deficits with (countries that export more to the U.S. than the U.S. exports to them). These figures include goods only.
- China – $375.2 billion
- Mexico – $71.1 billion
- Japan – $68.8 billion
- Germany – $64.3 billion
- Vietnam – $38.3 billion
- Ireland – $38.1 billion
- Italy – $31.6 billion
- Malaysia – $24.6 billion
- India – $22.9 billion
- South Korea – $22.9 billion
It’s no wonder that the president’s focus has been on China in his speeches and tweets. In early March, he tweeted, “China has been asked to develop a plan for the year of a One Billion Dollar reduction in their massive Trade Deficit with the United States. Our relationship with China has been a very good one, and we look forward to seeing what ideas they come back with. We must act soon!” (It later emerged he meant $100 billion.)
But it’s not just China that has a large trade imbalance with the U.S. Key allies and partners, including Mexico, Japan, Germany, Ireland, Italy and South Korea all top the list of countries with whom the U.S. has the biggest trade deficits.
The top countries on this list also include some of America’s biggest export partners – Mexico, China and Japan are Nos. 2, 3, 4 on the list of countries that buy the most American products.
What countries does the U.S. have the biggest trade surplus with?
Here are the countries with whom the U.S. has the biggest trade surplus. The figures, from the U.S. Census Bureau, include only trade in goods for 2017.
- Hong Kong – $32.5 billion
- Netherlands – $24.5 billion
- United Arab Emirates – $15.7 billion
- Belgium – $14.8 billion
- Australia – $14.6 billion
- Singapore – $10.4 billion
- Brazil – $7.6 billion
- Panama – $6 billion
- Argentina – $4.7 billion
- United Kingdom – $3.3 billion
What are the major imports and exports of the U.S.?
The U.S. Census Bureau reports that the top exports for the U.S. (by category) in 2017 were:
- Capital Goods (i.e. computers, electronics, office machines) – $533 billion
- Industrial Supplies (including oil, chemicals, and petroleum products) – $463 billion
- Consumer Goods (i.e. automobiles, clothing, furniture, toys) – $198 billion
An analysis of U.S. Census Bureau data done by WorldCity and published on Forbes shows the top 2017 exports as: aircraft, gasoline, motor vehicles, auto parts, computer chips, “low-value shipments,” cell phones, medical instruments, computers, and petroleum.
This partially overlaps with CNN Money’s list of the U.S. top exports in 2017, which it took from the U.S. Commerce Department: Food, beverages, feed ($133 billion), crude oil, fuel, other petroleum products ($109 billion), civilian aircraft, aircraft engines ($99 billion), auto parts, engines, car tires ($86 billion), industrial machines ($57 billion), automobiles ($53 billion), pharmaceuticals ($51 billion).
According to CNN Money, the top services exported include: transportation, travel ($236 billion), insurance, finance ($76 billion), intellectual property ($49 billion).
The U.S. Census Bureau reports that the top imports for the U.S. (by category) in 2017 were:
- Capital Goods (i.e. computers, electronics, office machines) – $640 billion
- Consumer Goods (i.e. automobiles, clothing, furniture, toys) – $602 billion
- Industrial Supplies (i.e. oil, chemicals, and petroleum products) – $507 billion
The top goods imported by the U.S., according to a similar WorldCity analysis published on Forbes were: automobiles, oil, cellphones, computers, “exports returned without change,” pharmaceuticals, gasoline, computer chips and commercial vehicles.
The MIT Media Lab’s Observatory of Economic Complexity has a fascinating tool to explore U.S. exports and exports for 2016: