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In this April 3, 2018, photo, President Donald Trump
speaks during a news conference in the East Room of the White House in
Washington. For more than a year, Wall Street has largely ignored the
unpredictability and chaos that has plagued Trump’s administration,
confident that the businessman-turned-president’s policies would juice
the economy and that a team of mainstream advisers would keep more
controversial proposals at bay. Now the financial markets are showing
that their patience with Trump has its limits. (AP Photo/Susan Walsh)
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By CALVIN WOODWARD, AP
WASHINGTON
President Donald Trump is off, way off, on the U.S. trade deficit with China.
He repeatedly uses an inflated number for the trade gap as the world’s two largest economies escalate their dispute over imports and exports.
His tweets on the subject Wednesday:
[post_ads]TRUMP: “We are not in a trade war with China, that war was lost many years ago by the foolish, or incompetent, people who represented the U.S. Now we have a Trade Deficit of $500 Billion a year, with Intellectual Property Theft of another $300 Billion. We cannot let this continue!”
TRUMP: “When you’re already $500 Billion DOWN, you can’t lose!”
THE FACTS: He overstates the trade deficit by $163 billion.
He does this by counting Americans’ purchases of goods from China as a loss for the U.S., while ignoring what China buys from the U.S. He also ignores another big part of the equation — trade in services.
Last year, Americans bought about $505.6 billion in goods from China while China bought about $130.4 billion in goods from the U.S. So the actual trade deficit in goods was just over $375 billion.
Factor in trade in services and the actual U.S trade deficit with China was $337 billion.
As for intellectual property theft, it’s not clear where Trump gets his figure of $300 billion, though it may be a plausible estimate.
Illicit activities such as counterfeit goods, pirated software, theft of trade secrets and copyright and trademark infringement cannot be precisely measured. An independent bipartisan U.S. commission estimated that U.S. interests lost $300 billion from global intellectual property theft in 2013, with China the main culprit. The commission, in a 2017 update, gave a wide-ranging estimate, $225 billion to $600 billion, with thefts led by “thousands of Chinese actors.”
The Trump administration this week announced planned tariffs on $50 billion in Chinese imports; Beijing responded with plans to penalize imports from the U.S. by the same amount. This followed an opening salvo of U.S. penalties on steel and aluminum imports from overseas, including China, and Beijing’s retaliatory taxes on $3 billion of U.S. products.
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2017 U.S. trade statistics: https://www.census.gov/foreign-trade/Press-Release/current_press_release/exh20.pdf
Intellectual property theft report: http://www.ipcommission.org/report/IP_Commission_Report_Update_2017.pdf
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Associated Press writers Christopher Rugaber and Josh Boak contributed to this report.
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Find AP Fact Checks at http://apne.ws/2kbx8bd
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