U.S. Trade Deficit Declines in 2019
China trade gap falls significantly due to tariffs
Washington. Federal data released this morning show that America’s enormous international trade deficit in goods and services fell in 2019 for the first time in six years. According to the U.S. Commerce Department, the trade deficit dropped 1.7 percent to $616.8 billion. And the bilateral trade deficit with China fell for the first time in four years, down 17.6 percent to $345.6 billion.
“This is excellent news for America’s manufacturers and agricultural producers,” said CPA Chair Dan DiMicco. “We are now seeing the tangible results of the Trump administration’s strong approach to trade. Tariffs work. Trade cases work. Washington must continue to hold firm—and support domestic manufacturers as they fight against subsidized and unfair trade.”
Michael Stumo, CEO of the CPA, said, “A shrinking trade deficit, combined with increased consumption, shows that US consumer demand is being successfully shifted to American-made products and services. Trade intervention to reduce the trade deficit increases growth and jobs.”
CPA supports a permanent, across-the-board 25 percent tariff on Chinese imports. A CPA study found that, when factoring in the impacts of China’s retaliation, USDA assistance for farmers, and federal reinvestment of tariff revenue, the overall stimulus to the U.S. economy from such action would result in a $167 billion boost to U.S. GDP, along with 1.05 million additional jobs, in 2024.
“It’s time to make the China tariffs permanent,” said Stumo. “Rebuilding U.S. manufacturing is the single most important step Washington can take to increase prosperity for America’s middle class. In addition to tariffs, Washington must also tackle the currency misalignment that hurts U.S. exports. Congress must pass the Baldwin-Hawley currency bill and send it to the president’s desk this year.”
Read more about currency misalignment and Baldwin-Hawley.