President Donald Trump on Thursday played down the prospect of successful trade talks with China and said the Asian economic powerhouse has become “very spoiled.”
Trump, in response to questions from reporters during his White House meeting with NATO’s secretary- general, said the United States has been losing $500 billion a year on trade with China.
Beijing and European countries, he said, have become “very spoiled,” and he said he cannot allow large trade deficits to continue.
The U.S. and China are holding talks aimed at avoiding a trade war between the world’s two biggest economies. “Will that be successful? I tend to doubt it,” the president said.
Trump was expected to meet with a top Chinese official who is in Washington for the trade talks.
When Trump cites the $500 billion figure, he is overstating the trade deficit with China by about $167 billion.
He counts Americans’ purchases of goods from China as a loss for the U.S., while ignoring what China buys from the U.S. He also ignores another big part of the equation — trade in services.
Last year, Americans bought about $505.6 billion in goods from China while China bought about $130.4 billion in goods from the U.S. So the actual trade deficit in goods was just over $375 billion.
Factor in trade in services and the actual U.S trade deficit with China was $337 billion.
The Trump administration has proposed tariffs on up to $150 billion in Chinese products to punish Beijing for forcing American companies to turn over technology in exchange for access to the Chinese market. China has counterpunched by targeting $50 billion in U.S. products.
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