Biden’s Bloodbath: The $1 Trillion Trade Deficit With The World Has Never Been Worse

Former President Donald Trump at a campaign stop in Dayton, Ohio on March 16 warned of an economic “bloodbath” if China is allowed to dump cars into U.S. markets via Mexican manufacturing plants. Trump promised to put a 100 percent tariff on any Chinese cars: “We're going to put a 100 percent tariff on every single car that comes across the line, and you're not going to be able to sell those guys, if I get elected!” In fact, the U.S. trade in goods deficit with the world has never been greater according to U.S. Census data, ballooning to $1.07 trillion in 2021, $1.18 trillion in 2022 and $1.063 trillion in 2023. In 2023, imports from Mexico hit a record of $475 billion. Naturally, President Joe Biden seized on his opponent’s colorful language rather than talk about trade policy, with Biden campaign spokesperson James Singer stating the trade commentary had something to do with “political violence”. Are we even having the same conversation in this country anymore? When Ross Perot warned of a “giant sucking sound” from Mexico in 1992, he did not mean that there was a physical, giant vacuum cleaner being set up on the border by Mexico, he was talking about jobs being exported to Mexico, which Trump is warning can happen again.

By Robert Romano

“Now, if I don't get elected, it's going be a bloodbath for the whole — that's going to bet the least of it — it's going be a bloodbath for the country. That'll be the least of it.”

That was former President Donald Trump at a campaign stop in Dayton, Ohio on March 16, describing the impact of Chinese dumping cars into U.S. markets via Mexican manufacturing plants.

Trump said he would not allow China to enter the U.S. auto industry and to attempt to take advantage of the U.S., Mexico and Canada (USMCA) trade agreement, “They think that they're going to sell those cars into the United States with no tax at the border. Let me tell you something to China. If you're listening President Xi, and you and I are friends, but he understands the way I deal: Those big monster car manufacturing plants that you're building in Mexico right now, and you think you're going to get that, you're going to not hire Americans and you're going to sell the cars to us — no.”

Instead, Trump promised to put a 100 percent tariff on any Chinese cars: “We're going to put a 100 percent tariff on every single car that comes across the line, and you're not going to be able to sell those guys, if I get elected!”

Trump then warned that if he wasn’t elected, it would be a “bloodbath” on trade. He’s not wrong.

In fact, the U.S. trade in goods deficit with the world has never been greater according to U.S. Census data, ballooning to $1.07 trillion in 2021, $1.18 trillion in 2022 and $1.063 trillion in 2023, much of which can be attributed to the higher rates of inflation experienced after close to $7 trillion was printed, borrowed and spent into existence during and after the 2020 Covid pandemic.

As a result, the cost of everything including cars, apparel, oil and other goods and commodities imported has increased, widening the trade gap even as U.S. exports similarly increased in prices. And it came even as the trade deficit with China sank to $279 billion in 2023 after big spikes to $352.8 billion in 2021 and $382.3 billion in 2022 amid slower growth there and an overall drop in exports by China worldwide in 2023.

For comparison, the trade deficit with the world was $792.4 billion in 2017, $870.4 billion in 2018, $845.8. billion in 2019 and $901.5 billion in 2020. And with China it was $375.2 billion in 2017, $418.2 billion 2018, $342.6 billion in 2019 and $307.96 billion in 2020.

While in office, Trump had raised the tariff level on imports from China to 30 percent for goods and 15 percent for the other basket of goods, levels that Biden has not reduced, more or less leaving the Trump trade policy with China in effect. Now, Trump warns China is trying to get around those tariffs by manufacturing in Mexico instead.

In fact, Mexico is one of the main drivers of the trade deficit increasing in recent years according to U.S. Census data, going from $105 billion in 2021, to $130.5 billion in 2022, to $152.3 billion in 2023. For comparison, it was $69 billion in 2017, $77.7 billion in 2018, $99.4 billion in 2019 and $110.9 billion in 2020.

Overall, imports from Mexico have increased from $312 billion in 2017 to $475 billion 2023, a record.

And he warns it could be a “bloodbath” economically if Chinese capital into Mexico is not averted. Naturally, Biden seized on his opponent’s colorful language rather than talk about trade policy, with Biden campaign spokesperson James Singer stating the trade commentary had something to do with “political violence”: “This is who Donald Trump is: a loser who gets beat by over 7 million votes and then instead of appealing to a wider mainstream audience doubles down on his threats of political violence.”

Are we even having the same conversation in this country anymore? When Ross Perot warned of a “giant sucking sound” from Mexico in 1992, he did not mean that there was a physical, giant vacuum cleaner being set up on the border by Mexico. He was talking figuratively about jobs that would go to Mexico in the wake of the then-North American Free Trade Agreement (NAFTA) that was being proposed.

Something that Trump is warning will get worse if China is allowed to set up manufacturing within the USMCA trade zone, noting that additional tariffs will be needed as China adapts to the stronger trade posture the U.S. set up after Trump was elected in the first place in 2016, promising to get tough on trade.

It might suit Trump just fine for Biden to ignore the trade issue, as Democrats did in 2016 as they pushed the Trans-Pacific Partnership that Trump rejected, with the only figurative bloodbath that might occur being at the polls when the American people vote in November.

Robert Romano is the Vice President of Public Policy at Americans for Limited Government Foundation. 

To view online: https://dailytorch.com/2024/03/bidens-bloodbath-the-1-trillion-trade-deficit-with-the-world-has-never-been-worse/