Trump Hates Trade Deficits,
But Which Ones Really Matter?

By Thomas Black and Dave Merrill
February 16, 2017

President Donald Trump is fixated on deficits as measures of how the U.S. gets the short end of the stick in trade deals. He’s had Mexico in his Twitter crosshairs for selling $63 billion more in goods to the U.S. than it buys, blaming “one-sided” Nafta for a “massive” imbalance—one he's promised to fix by renogotiating the terms of the agreement.

U.S. trade with Mexico in 2016
$525.2B total trade $231BU.S. exports $294.2BU.S. imports 56% | 44%
$525.2B total trade $231BU.S. exports $294.2BU.S. imports 56% | 44% 51% | 49% Canada $544.9B 80% | 20% China $578.6B 68% | 32% Japan $195.5B 70% | 30% Germany $163.6B 60% | 40% France $77.7B 68% | 32% India $67.7B 60% | 40% Taiwan $65.3B 73% | 27% Italy $62B 62% | 38% Switzerland $59.1B 29% | 71% Netherlands $56.6B 46% | 54% Brazil $56.5B 83% | 17% Ireland $55.1B 56% | 44% Mexico $525.2B 62% | 38% South Korea $112.2B 49% | 51% U.K. $109.7B $3.64T total trade $1.45TU.S. exports $2.19T U.S. imports 60% | 40% Percentage point trade gap U.S. trade surplus U.S. trade deficit 2% 60% 35% 40% 25% 20% 36% 20% 46% 23% 43% 7% 65% 12% 1% * Top 15 trade partners shown Canada China Japan Germany South Korea France India Taiwan Italy Switzerland Netherlands Brazil Ireland Mexico U.K.

That $63 billion deficit represents a 12 percentage-point import-export gap, considering that U.S. imports from Mexico are 56 percent of total trade between the two and exports to Mexico are 44 percent. While the size of a gap helps determine if a trade deal is a dud, Mexico is hardly America's biggest problem. The U.S. runs deficits with most of its more than 75 trading partners. The U.S. trade deficit totaled $743 billion in 2016—a 20 percentage-point import-export disparity.

U.S. worldwide trade in 2016
$3.64T total trade $1.45TU.S. exports $2.19T U.S. imports 60% | 40%
$525.2B total trade $231BU.S. exports $294.2BU.S. imports 56% | 44% 51% | 49% Canada $544.9B 80% | 20% China $578.6B 68% | 32% Japan $195.5B 70% | 30% Germany $163.6B 60% | 40% France $77.7B 68% | 32% India $67.7B 60% | 40% Taiwan $65.3B 73% | 27% Italy $62B 62% | 38% Switzerland $59.1B 29% | 71% Netherlands $56.6B 46% | 54% Brazil $56.5B 83% | 17% Ireland $55.1B 56% | 44% Mexico $525.2B 62% | 38% South Korea $112.2B 49% | 51% U.K. $109.7B $3.64T total trade $1.45TU.S. exports $2.19T U.S. imports 60% | 40% Percentage point trade gap U.S. trade surplus U.S. trade deficit 2% 60% 35% 40% 25% 20% 36% 20% 46% 23% 43% 7% 65% 12% 1% * Top 15 trade partners shown Canada China Japan Germany South Korea France India Taiwan Italy Switzerland Netherlands Brazil Ireland Mexico U.K.

When you consider the size of the gaps the U.S. has with some of its biggest trade partners, U.S deficits with Nafta partners Canada and Mexico are relatively minimal. A 65 percentage-point import-export difference favors Ireland in the largest trade deficit of America's 15 top trading partners. A 60 point gap favors China. The U.S. has big imbalances with Japan, Germany and India, too. The U.S. came out on the other side of the split with the Netherlands, the U.K. and Brazil; each bought more from the U.S. than it sold back in 2016.

Import-export imbalance
The 65-point gap between the share of goods exported to Ireland versus the share imported from Ireland is the largest among the top 15 U.S. trade partners.
Percentage point trade gap
U.S. trade deficit
U.S. trade surplus
2pts. 60pts. 35pts. 40pts. 25pts. 20pts. 36pts. 20pts. 46pts. 23pts. 43pts. 7pts. 65pts. 12pts. 1pt. Canada China Japan Germany South Korea France India Taiwan Italy Switzerland Netherlands Brazil Ireland Mexico U.K.
2pts. Canada 60pts. China 35pts. Japan 40pts. Germany 25pts. South Korea 20pts. France 36pts. India 20pts. Taiwan 46pts. Italy 23pts. Switzer- land 43pts. Nether- lands 7pts. Brazil 65pts. Ireland 12pts. Mexico 1pt. U.K.

In sheer dollars, China tops the lopsided list. The U.S. does more trade with China than any other country. In 2016, the U.S. bought $347 billion more from the Chinese than it sold to them—an 80-20 split.

Total trade with the top 15 U.S. trading partners
U.S. imports|U.S. exports
51% | 49% Canada $544.9B 80% | 20% China $578.6B 68% | 32% Japan $195.5B 70% | 30% Germany $163.6B 60% | 40% France $77.7B 68% | 32% India $67.7B 60% | 40% Taiwan $65.3B 73% | 27% Italy $62B 62% | 38% Switzerland $59.1B 29% | 71% Netherlands $56.6B 46% | 54% Brazil $56.5B 83% | 17% Ireland $55.1B 56% | 44% Mexico $525.2B 62% | 38% South Korea $112.2B 49% | 51% U.K. $109.7B
51% | 49% Canada $544.9B 80% | 20% China $578.6B 60% | 40% Taiwan $65.3B 62% | 38% Switzerland $59.1B 29% | 71% Netherlands $56.6B 46% | 54% Brazil $56.5B 83% | 17% Ireland $55.1B 73% | 27% Italy $62B 70% | 30% Germany $163.6B 62% | 38% South Korea $112.2B 60% | 40% France $77.7B 68% | 32% India $67.7B 49% | 51% U.K. $109.7B 68% | 32% Japan $195.5B 56% | 44% Mexico $525.2B

Trump's fixation with renegotiating Nafta is understandable when you consider that trade with Canada and Mexico exceeded $1 trillion last year. But massive trade gaps with China and other countries show that changing Nafta won't get the U.S. much closer to global trade parity.