Data Shows U.S. Trade Gap With China Widened During Month Of June President Trump promoted his trade agenda in Wisconsin on Friday, as new data shows a widening trade deficit with China.
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Data Shows U.S. Trade Gap With China Widened During Month Of June

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Data Shows U.S. Trade Gap With China Widened During Month Of June

Data Shows U.S. Trade Gap With China Widened During Month Of June

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President Trump's trade war is having an impact on the nation's trade deficit, but it's not the one the president advertised. The U.S. trade gap with China actually widened last month. The trade war depressed both imports and exports, but U.S. exports to China took the bigger hit. The administration is urging Americans to be patient during what could be a drawn-out tariff battle. NPR's Scott Horsley reports.

SCOTT HORSLEY, BYLINE: President Trump promoted his trade agenda in Wisconsin today while also raising money for his reelection campaign. Speaking at an aerospace company in Milwaukee, Trump said the 25% tariffs he slapped on hundreds of billions of dollars in imports from China are paying off.

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PRESIDENT DONALD TRUMP: A lot of companies are leaving China now because they want to go to a non-tariffed country. And some of those companies are coming here. It's been incredible. We're taking in billions and billions of dollars.

HORSLEY: Customs data from the Chinese government confirms Americans bought 8% less stuff from China last month than they did a year ago. But U.S. sales to China plunged more than 30%. Economist Mary Lovely of Syracuse University says U.S. exporters are paying a heavy price for the president's trade war.

MARY LOVELY: I think whatever jobs are created by President Trump's war on global supply chains are going to be dwarfed by losses in the U.S. export sectors.

HORSLEY: Trump boasted on Twitter this morning that tariffs are a great negotiating tool and a powerful way to get companies to build products in the United States. Lovely acknowledges some companies are shifting production away from China to avoid Trump's tariffs, but she says they're generally not opening factories in the U.S. Instead, they're building plants in places like Vietnam, South Korea, Singapore and Hong Kong.

LOVELY: We see increasing evidence of the supply chain moving but clearly not to the U.S. And unfortunately, the evidence is mounting that this is not good for the U.S., that we need to take a different approach, work this out. But these guys have dug in.

HORSLEY: Two weeks ago, Trump met with Chinese President Xi Jingping, and the leaders agreed to restart trade talks. But Trump complained on Twitter this week China has not followed through with additional purchases of U.S. farm goods. Hopefully they will start soon, the president said. White House trade adviser Peter Navarro told CNBC this morning the U.S. trade representative, Robert Lighthizer, will soon be traveling to Beijing for talks. Navarro cautioned it could be a lengthy discussion.

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PETER NAVARRO: My advice for investors is to be patient with this process. Don't believe anything you read in either the Chinese or the U.S. press about these negotiations unless it comes from the mouths of either the president or Ambassador Lighthizer.

HORSLEY: Professor Lovely says patience just means more pain as tariffs mount. The advocacy group Tariffs Hurt the Heartland has been keeping a running tally of tariffs that Americans are paying. Those totaled $5 1/2 billion in May - 2.4 billion of that was on goods from China. Lovely says U.S. producers might absorb the cost of those tariffs for a little while, but eventually, they'll pass it on in their prices.

LOVELY: I think U.S. producers have been reluctant to do that, especially if they feel that these tariffs are short-lived. But if they believe that these tariffs are here to stay, they'll be forced to pass those along to consumers.

HORSLEY: China and other countries are fighting back with their own tariffs on U.S. exports. Those tariffs jump to $1.3 billion in May, even as the value of American exports fell. Scott Horsley, NPR News, Washington.

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