At this point, it is not news that the President of the United States is a fan of tariffs. He has gone so far as to (sarcastically or not) christen himself “Tariff Man,” in a tweet earlier this month. What is also not new is that President Trump seems to fundamentally misunderstand how international trade works. The president thinks that a trade deficit — even a bilateral trade deficit with a single country — necessarily has a negative impact on the US economy. He is wrong on this, to be sure, but even on his own terms the president’s attempts at alleviating the bilateral trade deficit with China have failed. In fact, the president’s tariffs have, predictably, had the opposite effect: the month-to-month trade deficit with the rest of the world is higher in 2018 than it was in 2017, and by all accounts the total bilateral trade deficit between the United States and China for 2018 will easily surpass the 2017 number.
President Trump’s tariffs on steel and aluminum were announced in March of 2018. At that time, the US trade deficit with the rest of the world stood at $68.5 billion. As of this July, that number had increased to $72 billion. The most recent number, from October of this year, shows the trade deficit increasing to $76.98 billion.
The same is true for the bilateral trade deficit with China. In January 2018, the US had a $35.9 billion trade deficit with the Chinese. As of October, the bilateral trade deficit with the Chinese had grown to $43.102 billion.
Note that all these numbers are sum totals for that specific month. If the overall trade deficit with the Chinese had only increased by $8 billion over the course of 2018, then perhaps the President would have a case to make that his tariffs did not increase the trade balance to a greater extent than that number would have appreciated anyway in their absence. This, however, is not what happened. The monthly trade deficit with China increased by $8 billion from January through October. The annual trade deficit, following this trend and aggregating each monthly increase, is on pace to increase far more dramatically over the $718 billion figure from 2017.