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The US-China trade deal leaves a large American deficit and a permanent collision course

If we are to look at the value of trade done between the two largest economies of the world that are bitterly engulfed in a trade war at the moment we would see that the first round of trade deal between the two countries does not offer balance of their corresponding trade accounts.

The total volume of US goods that China has in surplus during the first 10 months of this year is $294.5 billion and the figure is close to 40% of the trade gap with America. During this period Beijing had reduced its exports to the US by 14.5% to $87.6 billion. But Chinese goods were selling on a much larger quantity in the US markets at $382.1 billion.

It’s only in the first trade deal that China has promised to buy more US goods mainly its agricultural products by $200 billion.

If that is only what Beijing is offering then the US authorities will have to look at the situation and do the basic math and they will find out that the buying of Chinese goods nearly needs to be halved if the US wants to keep its trade deficit account under control. Otherwise, the trade deficit for the US would keep increasing every year.

It is true that this was the first major breakthrough between the two countries that had been enmeshed with each other in trade war and the first round of trade talks between the two countries is more than welcome. In the next year, we should see some more rounds of trade talks between the two countries that would reduce the tariffs and increase the exports and imports between the two countries.

But as of now the US is lagging behind and seems to have committed more to China and if the present trend is to continue it’s not long before the US will realize their mistake.

John Wilson
Author Details
EDITOR-IN-CHIEF At Chemical News Reports

John Wilson is present in the Business sphere from the last 6 years. His MBA in Finance Degree has always helped him to understand the complex activities and hold a strong grasp of the Business world. While John is one of the major authorities at Chemical News Reports, he serves as the Head of the Business Department at our news portal from the last 4 Years. Moreover, his promising decision-making abilities have helped the organization to make and execute all major decisions of the Business Department efficiently. Moreover, as a part of his regular work, he is involved in the quality checks of all news pieces.

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