As President-elect Donald Trump, looks ahead, he will inherit a different U.S. trade environment … [+]
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U.S. trade with the world today is vastly different in many respects from the world Donald Trump encountered when he entered the White House as president for the first time, in 2017.
Let’s start with the obvious: NAFTA is gone, replaced by USMCA.
Let’s go a wee bit in the weeds: In 2017, the World Trade Organization, and its predecessors, which had attempted to assert a tariff-limiting global trade policy since the end of World War II, had only recently lost a quorum on its panel of appellate judges.
Today, since neither Trump nor his successor and predecessor President Biden, replaced those judges — and since he is unlikely to do so in this term — the WTO is largely de-fanged.
GOP and Labor
And how about this: In 2017, a Democrat, Barrack Obama, was leaving the White House, with labor still firmly in the pocket of the party.
Today, the Republican Party, which passed the Taft-Hartley Act in 1947 to allow presidents to order striking workers back on the job, has a president who is siding with the International Longshoremen in the ILA’s battle to suppress technological advances and enhance efficiency. The ILA members will vote on whether to approve the agreement in the coming weeks.
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Today, the Republican Party, which passed the Taft-Hartley Act in 1947 to allow presidents to order striking workers back on the job, has a president who is siding with the International Longshoremen in the ILA’s battle to suppress technological advances and enhance efficiency. The ILA members will vote on whether to approve the agreement in the coming weeks.
Tariff king
And then there’s tariffs. In his first term, Trump proudly declared himself the “Tariff King.”
Today, the tariffs raised during Biden’s term make him the tariff king, since Trump’s trade war only began midway through his first term.
Even if Trump’s threats of 25% tariffs on Canada and Mexico, 60% tariffs on China, and 10% tariffs on the rest of the world don’t come to fruition, he will certainly regain bragging rights.
Through it all, U.S. trade grew, from $3.64 trillion in 2016 to more than $4 trillion for the third consecutive year when 2024 figures are released.
Let the data speak
Now, on to the data.
Today, Mexico will be the United States’ top trade partner for the second year in a row, the annual data will show when released next month.
In 2016, China had been the nation’s top trade partner for the second year in a row — on its way to its third and fourth consecutive years. Until then, those were the only years it had ranked first.
In 2024, China will rank as the nation’s third-ranked trade partner, also trailing Canada.
In 2016, China had accounted for more than 21% of all U.S. imports by value, and would do so again for Trump’s first two years in office, before his wide-reaching tariffs on China would take full effect.
In 2024, the import percentage for China will be about 13.50%, perhaps a little higher when the statistics are released. Mexico will rank first for imports into the United States for the second year in a row, with both years above 15% of the total.
Deficits
In 2017, the U.S. deficit with China was $551.37 billion — the first deficit with a single nation to even top one-half trillion dollars — and five times that of the second-largest U.S. deficit, with Mexico.
In 2024, it will probably be slightly south of $300 billion, a staggering decline as many imports previously labeled as originating in China shifted to Vietnam, Japan, Taiwan, Cambodia and Mexico.
The U.S. deficit will be less than twice as great as the deficit with Mexico, which has ballooned from $63.27 billion to somewhere about $170 billion.
The U.S. trade deficit with Vietnam has risen sharply as well, from $31.99 billion to a record of about $120 billion, its third consecutive year above $100 billion. The U.S. deficit with Canada will have risen from less than $11 billion to more than $60 billion. The deficit with Taiwan has increased more than 440%, with South Korea more than 120%.
The decline in the U.S. deficit with China is about 15%, given the larger numbers.
In 2016, the U.S. trade deficit was $735.33 billion.
In 2024, after a steady climb, it will top $1 trillion for the fourth year in a row.
As President-elect Trump enters the White House for his second term, much, but not all has changed.