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Data: U.S. Bureau of Economic Analysis; Chart: Axios Visuals

The Trump administration's trade war with China and the coronavirus pandemic have crippled U.S. exports this year and could worsen as the administration reportedly is considering export restrictions on China’s most advanced manufacturer of semiconductors.

Where it stands: The U.S. trade deficit has risen to its highest since July 2008 and U.S. exports of goods and services as a percentage of GDP shrank to the lowest level since 2003 in the second quarter.

Why it matters: While exports aren't a major contributor to U.S. GDP, adding such restrictions on sales to a trading partner as large as China’s Semiconductor Manufacturing International Corp. risks doing real harm to U.S. growth as companies try to bounce back from the pandemic.

Between the lines: China's economy is recovering more quickly than other countries but Beijing remains well behind in its commitments to purchase increased U.S. goods and services.

  • The U.S. already has placed similar restrictions on Chinese telecom giant Huawei, another major buyer of American-made tech products.
  • Chinese officials say the export restrictions have simply accelerated development of domestically produced equipment to replace the U.S. products.

The big picture: Exports as a percentage of GDP represented 12.4% of U.S. GDP as recently as the second quarter of 2018, and had remained above 12% until Q2 2019, but have fallen precipitously since.

  • Trump looks to be doubling down, threatening to punish American companies that create jobs overseas and to deny those that do business in China federal contracts, in a White House news conference Monday.

Go deeper

Dec 16, 2020 - Politics & Policy

The Fed's last word on 2020

Jerome Powell. Photo: Pool/Getty Images

Federal Reserve Chairman Jay Powell holds his final news conference of the year Wednesday — and Congress may get an earful.

What we’re hearing: Powell is likely to plead with Congress to pass more fiscal support for an economy riven by a global pandemic, and to suggest there are limits to what the Fed can do with monetary policy.

Caitlin Owens, author of Vitals
4 hours ago - Health

Biden taps ex-FDA chief to lead Operation Warp Speed amid rollout of COVID plan

Photo: Alex Wong/Getty Images

President-elect Joe Biden has picked former FDA chief David Kessler to lead Operation Warp Speed, a day after unveiling a nearly $2 trillion pandemic relief plan that includes $400 billion for directly combatting the virus.

Why it matters: Biden's transition team said Kessler has been advising the president-elect since the beginning of the pandemic, and hopes his involvement will help accelerate vaccination, the New York Times reports. Operation Warp Speed's current director, Moncef Slaoui, will stay on as a consultant.

The case of the missing relief money

Illustration: Sarah Grillo/Axios

A chunk of stimulus payments is missing in action, thanks to a mix up that put as many as 13 million checks into invalid bank accounts.

Why it matters: The IRS (by law) was supposed to get all payments out by Friday. Now the onus could shift to Americans to claim the money on their tax refund — further delaying relief to struggling, lower-income Americans.