A new study shows that the US has a net trade deficit with China, and that this gap has increased since Donald Trump became president.
A new analysis by the Center for International Economics (CIE) at the University of Chicago shows that since the president took office in January, US trade with China has grown by $15.5bn, an increase of $1.4bn in just two months.
It shows that in February, China had a net loss of $2.7bn, a slight increase from the previous month.
However, that increase was offset by a $5.5m gain for the US, which was offset somewhat by a drop in imports from China.
“The net gain in trade was offset largely by the US offsetting a loss of imports from the same country,” the report says.
“This has caused the trade deficit to be $11.3bn in March, which is a small but significant net gain.”
The net loss in trade, however, is dwarfed by the $5bn gain from China over the same period.
In March, China’s trade surplus with the US was $10.4 billion, an even bigger surplus than the $4.5 billion surplus in March 2016.
But the US trade deficit, according to the report, has increased by $1bn in the same two months, bringing the current deficit to $15bn.
The report said China was likely to continue to benefit from the increased trade deficit as it sought to export more of its manufactured goods to the US.
“As China seeks to increase its domestic manufacturing capacity and exports more of the products that it needs to compete globally, the trade gap is likely to widen as China expands exports,” the authors of the report said.
It noted that a recent report by the United Nations Conference on Trade and Development (UNCTAD) estimated that the trade imbalance with China could reach $30bn by the end of 2019.
It said the net gains in the US were driven by “lower import tariffs, lower US exports, and higher imports from non-US countries, including Mexico, Brazil and India”.
“The US trade gap with China is now a net negative, so the US must address it to reverse the trend of increasing trade deficits,” the researchers wrote.
“The US should increase its imports from Canada and Mexico, to offset the decline in imports to China.”CIE is the centre for research on global economic development and policy, and is a member of the US Council on Foreign Relations.