The trade war is kind of working
Illustration: Lazaro Gamio/Axios
U.S. manufacturers and small businesses have been hit hard by the trade war, but recent data shows that China is really suffering.
Driving the news: China's total exports fell for the 12th straight month in November, dropping 1.1% from a year ago, and exports to the U.S. have fallen more than 20%, according to China’s customs administration.
- Economists had expected shipments to rise 1%, as retailers and companies stock up for Christmas, per Reuters.
What's happening: The U.S. trade deficit declined 7.6% in October to $47.2 billion, the smallest since May 2018, as both imports and exports of goods fell. It was the second straight month the trade deficit has fallen and the largest drop since January.
- The goods trade deficit — a key benchmark of the Trump administration — is at its lowest since September 2017.
- China’s trade surplus fell to $38.73 billion in November, about $8 billion below what it was expected to be.
By the numbers:
- 27.4% drop in the goods trade deficit in October.
- 23.1% year-over-year decline of U.S. imports from China.
- 2.8% year-over-year decline in U.S. exports to China.
What they're saying: "There’s little reason for the Trump administration to back away from tariffs as the pressure on China is working," analysts from S&P Global Market Intelligence note.
But, but, but: The goods trade deficit with the EU increased 20% during the month, with U.S. imports from the EU surging to a record high, so American business owners aren't necessarily reaping the benefits.
- The Commerce Department also reported that factory orders increased 0.3% in October, but shipments were unchanged and unfilled orders were flat, indicating the recession in the U.S. manufacturing sector could continue for some time, Reuters notes.