America’s total goods trade with China was estimated at $582.4 billion in 2024. US goods exports to China in 2024 were $143.5 billion, down 2.9 per cent ($4.2 billion) from 2023 while US goods imports from China in 2024 totaled $438.9 billion, up 2.8 per cent ($12.1 billion) from 2023. That left the US running a trade deficit with China – the difference between what it imports and exports – of around $295bn last year, which is a considerable trade deficit amounting to nearly 1 per cent of the US economy, but far less than the $1trillion figure that Trump has repeatedly claimed this week.
So far, neither China nor the US are backing down on their respective tariff actions. China has said it will “fight to the end” rather than capitulate to what it sees as US coercion, and has hiked its own trade barriers against the US in response to American tariff increases.
In the short term, there is a likelihood that these tariffs will go through because Washington DC is prioritising negotiations with Japan, South Korea and others in China’s vicinity, before it may sit down with Beijing.
The tariffs on China have been progressively mounting, with Trump imposing a 10 per cent tariff on all Chinese goods in February, which was doubled to 20 per cent in March last week, and then he announced another 34 per cent to take effect on April 9. Trump then threatened an additional 50 per cent levy if China did not pull back reciprocal tariffs of its own, bringing total US taxes on Chinese imports to a whopping 104 per cent from April 9. With a cumulative 104 per cent tariffs, two things could happen. One, these taxes could make a lot of things too expensive, and it will be prohibitive to import a lot of items from China into the US. Two, there are many things that the US only imports from China. These tariffs, if they stay, would mean Washington DC will either have to develop alternative sourcing options or make do without these items, which include critical drug ingredients, key rare earth elements used in military hardware and avionics, and high-end consumer items.
For the US, in this problem of fair trade with China, tariffs have historically not been the biggest bugbear. The more serious issues have been the constant currency manipulations by Beijing, of pegging the renminbi lower than what its intrinsic value ought to be, to incentivise its exports. The other issue includes a raft of non tariff barriers – barriers to trade imposed by Beijing on foreign companies in sectors such as consumer banking and high-end manufacturing.
