What Happened to the U.S. Deficit with China during the U.S.-China Trade Conflict?

Hunter Clark and Anna Wong

No 20210621b, Liberty Street Economics from Federal Reserve Bank of New York

Abstract: The United States’ trade deficit with China narrowed significantly following the imposition of additional tariffs on imports from China in multiple waves beginning in 2018—or at least it did based on U.S. trade data. Chinese data tell a much different story, with the bilateral deficit rising nearly to historical highs at the end of 2020. What’s going on here? We find that (as also discussed in a related note) much of the decline in the deficit recorded in U.S. data was driven by successful efforts to evade U.S. tariffs, with an estimated $10 billion loss in tariff revenues in 2020.

Keywords: China; tariff; trade (search for similar items in EconPapers)
JEL-codes: F0 (search for similar items in EconPapers)
Date: 2021-06-21
New Economics Papers: this item is included in nep-cna and nep-int
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