The US lowers the trading gap with China while imports decrease

The U.S government is working on slowing down imports and advancing exports to China in recent years. The strategy succeeded as the U.S records exports raising and reaching the top level in 2018, while imports are record-breaking lowest since 2016. Promoting US products internationally has many benefits for the country.

Limiting the import of foreign products has also a big impact on the economy of the US. It is best for one country when customers buy products designed and manufactured in their home country. As the merchandise gap with China lowered to $28.3 billion in March while having a deficit in products and services of $50 billion.

All U.S exports in this year are so valuable that they added a full point to GDP (gross domestic product) in the first quarter. Companies in the U.S have limited their imports from Chine due to regulations and tariffs that were forced by the U.S government over the Chinese trade war. China came up with the decreased result of exports to the United States by 13.1% which was the biggest drop since 2009. China experienced a global export decrease, falling down 2.7%, although imports have risen 4%.

This fact proves that China might be losing the top supplier position in the world. There are more companies which like to force and work with products from their country of origin. Some governments even made law regulations which will support the local production.

If before China was largely leading this horse race, as the country with more merchandise exports, now the gap to its competitors is getting smaller. Experts say that if this trend continues, the giant export country China will lose its title companies will start to work with goods from their country and import only unique goods.

Due to regulations and supporting the growth of the national economy, we can see the narrower gap in trade with China. In the first quarter, the U.S recorded a drop in imports from Asian countries by 13.6% leaving with $118.9 billion, as well as exports dropped by 17.6% to $27.2 billion.

Since the U.S government announced a trade war against China and they replied back, the companies in these two countries did not see any improvements. After the Chinese introduced special tariffs for importing U.S products, the country recorded loss of around $40 billion in exports.

Meanwhile, the U.S introduced tariffs as well for may imported product from Asia, which resulted in slower shipment and loss of interest due to minimized profit. Just because of the Trade war between these two countries, Mexico saw the light in the tunnel. Exported goods from Mexico to the United States have risen by 10%, topping up almost $350 billion last year, which is the fastest growth recorded for in more than 6 years.

This year, the U.S has improved productivity which accelerated more than expected by 3.6%. This proves that companies in the country are on a steady path by manufacturing goods as well as placing them in home and foreign markets. This is a huge improvement in productivity and will have a big positive hit on the economy.

Imports and Exports to Asian countries are expected to rise in the next part of the year, but the U.S will remain to implement regulations by forcing home manufacturing. When we take into consideration that the merchandise trade deficit with Europe, Mexico, and Canada also narrowed the China situation might not be that impactful to the economy.

Both sides want to have economic peace after the exhausting 8-month trade war. Officials are currently negotiating on the terms of a trade deal for the future. U.S government theory might back-fire as they try to lower the deficit which might slow the entire global growth of the country. These are sensitive problems which want more permanent solutions.