President Trump's China trade deficit claim doesn't quite measure up to $500B

President Donald Trump fired up supporters April 27, 2019, in Green Bay with broadsides against Democrats and the media, as well as statements touting GOP health care plans, lower poverty rates and the American economy.

"We're now the No. 1 economy anywhere in the world and it's not even close," the president told the crowd of thousands at the Resch Center.

Trump later called the 1994 North American Free Trade Agreement "one of the worst trade deals ever signed in the history of our country" and said if you "look around Wisconsin you still see the scars."

Continuing on trade, the president said his administration is "very close to making a deal with China."

"We have been losing to China for many years, $500 billion a year," Trump said. "We have rebuilt China. We've given them so much."

Is President Trump right that the U.S. is losing $500 billion a year to China?

Not exactly.

Trade deficit with China

As PolitiFact National has noted, a country’s trade balance is simply the difference between the value of its imports and exports, and a trade deficit occurs when imports exceed exports.

The U.S. trade deficit in goods (i.e. products) with China in 2018 rose to $419.2 billion, up from from the previous record of $375.5 billion in 2017, according to a Commerce Department report.

In 2016, the deficit with China in goods was $347 billion. The U.S. Census Bureau, which is part of the Commerce Department, documents the U.S. trade deficit in goods with China dating back to 1985, when the deficit was $6 billion.  

Our colleagues at PolitiFact National have checked the president’s claim of a $500 billion trade deficit with China at least twice.

A 2018 fact-check, one of the most recent that addressed trade specifically with China, evaluated this claim from Trump: "Last year we lost $500 billion on trade with China."

In 2017, the year cited, the value of Chinese goods imported to the United States ($505 billion) exceeded American goods exports to China ($130 billion) by roughly $375 billion. So, at the time Trump's $500 billion figure was off by $125 billion.

PolitiFact National surmised Trump may have confused the Chinese trade deficit with the United States’ overall trade deficit, which was $566 billion in 2017, or it’s also possible Trump used the $500 billion figure as a matter of habit. In any case, the claim was rated Mostly False.

In his most recent claim, Trump is closer because the deficit has grown -- to $419 billion in 2018. But he is still well off the mark.

Foxconn connection

A footnote: Though Trump did not mention the planned Foxconn plant in Wisconsin, some analysts believe there is a connection between it and trade negotiations with China.

Taiwan-based Foxconn has promised that 13,000 jobs will be created in Racine County at its planned flat-screen manufacturing complex -- though those numbers have long been in doubt.

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In January 2019, there were reports Foxconn was reconsidering its investment. More recently, Gov. Tony Evers said Foxconn officials said they wanted to rewrite a contract that lays out what size investments Foxconn must make in Wisconsin in order to receive taxpayer subsidies.

And on April 30, 2019, Foxconn chairman and CEO Terry Gou visited the White House potentially to discuss the sprawling manufacturing facility the Taiwanese tech giant is building in southeastern Wisconsin.

In February, when Foxconn recommitted to the operation, Gou said he and Trump spoke about the big stakes of the U.S.-China trade war.

"U.S. President Trump shared with me yesterday on the phone that the negotiation progress between China and the U.S. is going well, and it is likely that they will come up with an agreement soon," Gou said, according to a report in the Nikkei Asian Review.

At the time, some trade analysts told the Milwaukee Journal Sentinel they thought Foxconn's promise to build a manufacturing complex in Wisconsin amounts to a bargaining chip in the economic conflict between Washington and Beijing.

"If you think foreign investment is one of the moving pieces (in the trade talks), it absolutely is," said Mary Lovely, an economist who specializes in international trade and investment at the Peterson Institute for International Economics in Washington, D.C. "It’s pawns on the chess board."

Our rating

At a rally in Green Bay, Trump said "We have been losing to China for many years, $500 billion a year."

While it’s true the U.S. has faced a trade deficit with China for many years, the president’s use of the $500 billion figure is an overreach. To be sure, Trump’s repeated use of the figure is getting closer -- mainly because the trade gap is growing.

But it’s still off.

We rate the claim Mostly False.