Tracking the Trade War: US Car Sales to China Down, Parts From China Up

-edited

A pair of charts by Brad Setser highlight's Trump's difficulty in winning the trade war with China.

Trump says winning trade wars is easy.

Trade War Theory vs Practice

​What's supposed to have been "easy" has turned out quite differently.

Record Monthly Deficit

Full Year Trade Imbalance Hits New Record

Please note the US trade deficit with China grows to a record.

  • China’s trade surplus with the U.S. — closely watched amid the tariff war between the two countries — grew 17 percent from a year ago to hit $351.76 billion in 2018. [Note this was originally posted as $323.23 billion]
  • Exports to the U.S. rose 11.3 percent year on year in 2018, while imports from the U.S. to China rose 0.7 percent over the same period.
  • The deficit that the U.S. has with China is likely even bigger than these figures indicate since China calculates the numbers using different methods, sometimes excluding goods that end up in the U.S. via other countries.

Despite a massive global slowdown in autos, auto parts imports keep rising. Note that US Auto Overcapacity is 10 Plants with 20,000 direct jobs on the line.

Amid talk of the greatest trade deal ever, President Trump will likely sign a deal with China by March. It won't solve much, if anything.

Mike "Mish" Shedlock

Comments (7)
No. 1-6
channelstuffing
channelstuffing

Wow ,just what USSA needs,more cheap junk from China,best guess 1/3 works 2/3 don't even bother,just throw it out lol

gregggg
gregggg

Let's just wait and see what gets squeezed out as liquidity disappears from the markets.

thimk
thimk

china had a us car import tariff reduction on the table from 40 % to 15%. that might have reduced US overcapacity. But this Huawei thing;; well.

Sechel
Sechel

If Trump wants the balance of trade to change we need to do one of two things, neither of which is very attractive, reduce u.s. wages or depreciate the hell out of the u.s. dollar. either way Americans become poorer. If China wants to sell us cheap auto parts, we should buy them, that's just good business.

brow beating china to simply buy more american goods is probably not going to work very well. things like ending Chinese corporate espionage and forcing american companies to partner up with Chinese ones are enviable long term goals but unlikely to do much in the short term in my opinion

Aaaal
Aaaal

There is absolutely no way that this simpleton graduated Wharton.

everything
everything

As long as I keep seeing beautiful looking newer model cars being towed into the scrap yard with nary a scratch on them, then this is all good. Still, I tend to think quality of China manufacturing has improved, these guys are always upping their game.