Submitted by Taps Coogan on the 6th of September 2017 to The Sounding Line.
With the US in the process of renegotiating NAFTA with Canada and Mexico, and seriously contemplating imposing tariffs on China, the issue of America’s trade agreements and persistent trade deficits is now more important than ever. As the following chart from Statista shows, these three countries alone (Canada, Mexico, and China) account for over 45% of US foreign trade, dwarfing trade with other countries such as Japan and Germany. The outcome, good or bad, of trade negations with these three countries will have a seismic impact on the US and global economy.
You will find more statistics at Statista
As can been seen in the chart below, the US trade deficit with China is larger than the US trade deficit with all other countries combined. If the US somehow managed to balance its trade deficits with Canada, Mexico, and every other country in the world except China, the US would still have an enormous trade deficit.
Of the two trade ‘renegotiations’ (NAFTA and China), NAFTA offers a modest opportunity to reduce the US trade deficit but puts over a quarter of US exports at risk. Changing trade relations with China offers the potential to massively reduce the US trade deficit and only puts about 7% of US exports at risk. If you believe in picking your battles, that’s the one to pick.
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