How US-China Trade Changed Under Trump and Biden

Donald Trump's first term reshaped the bilateral trade landscape between China and the United States. The US trade deficit with China stopped shrinking during the pandemic -- but as our chart shows, this proved to be a temporary phenomenon over the longer term.

We've visualized US exports and imports since 2017 with indices measuring total bilateral trade: one for China and one for the rest of the world.

The trend lines start to diverge in mid-2018. We've used June of that year, when Trump's trade representative announced a 25% tariff on some Chinese goods, as the neutral "100" value for our trade indices. Two more rounds of tariffs were implemented in August and September of 2018; an additional tariff was increased at the start of 2019.

As the US trade deficit with China narrowed, trade of goods with other countries remained largely stable. (Our trade index for China shrank to 79 from 100; the rest-of-world index rose to 105.)

In absolute USD terms, from June 2018 to March 2020, US imports from China (expressed as a 12-month rolling sum) decreased from $505 billion to $418.9 billion, US exports to China decreased from $135.2 billion to $102.6 billion, and the US trade deficit with China narrowed from $390.7 billion to $319 billion. In terms of market share, the share of US imports from China over that period decreased from 21.5% to 17%, as our second chart shows; the share of US exports to China decreased from 8.3% to 6.3.

The pandemic period is notable: China's trade surplus rose substantially, with the IMF linking this phenomenon to exports of medical equipment and a trend by global consumers to spend more on imported goods versus local services during lockdowns. However, by late 2021 and early 2022, supply chains were experiencing significant disruption.

The Biden administration kept many of the Trump tariffs in place, and has since added more levies on goods such as electric vehicles. Our bilateral trade index for China shrank from a peak of about 109 in mid-2022 to about 89 today, while the US trade deficit with China narrowed to $283.3 billion as of August 2024.

Since the initial drama of Trump's trade conflict in 2018, both China and the US have strengthened cooperation with other trading partners, as our final chart shows; the US trade deficit with other regions and China's trade surplus with other regions have expanded simultaneously. "Decoupling" in bilateral trade could be interpreted as "trade diversion" as export patterns were reorganized.

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