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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.

Read: Former Vice President Walter Mondale's last message

Photo courtesy of Mondale.

Former Vice President Walter Mondale wrote a farewell letter to his staff, sent upon his death on Monday, thanking them for years working together.

Dear Team,

Well my time has come. I am eager to rejoin Joan and Eleanor. Before I Go I wanted to let you know how much you mean to me. Never has a public servant had a better group of people working at their side!

Together we have accomplished so much and I know you will keep up the good fight.

Joe in the White House certainly helps.

I always knew it would be okay if I arrived some place and was greeted by one of you!

My best to all of you!

Fritz

Former Vice President Walter Mondale dies at 93

Walter Mondale, left, with former President Jimmy Carter in Jan. 2018 at the McNamara Alumni Center on the University of Minnesota's campus in Minneapolis. Photo: Anthony Souffle/Star Tribune via Getty Images

Walter Mondale, who transformed the role of U.S. vice president while serving under Jimmy Carter and was the Democratic nominee for president in 1984, died Monday at 93, according to a family spokesperson.

The big picture: President Biden, who was mentored by Mondale through the years, said in 2015 that the former vice president gave him a "roadmap" to successfully take on the job.