OPINION:
Since President Trump’s first term, one of his top priorities has been rebalancing the U.S. trade deficit.
Such an objective is particularly important now that the United States is importing a record amount of goods.
In 2019, after one year of trade war, the first Trump administration reached a deal with China to export $200 billion in American goods annually. The deal was crucial to rebalance the U.S. trade deficit, which has been affecting the American economy since the 1970s.
However, in the following years, such a target was missed, and Chinese imports fell short of the agreed amounts.
Last year, the Trump administration imposed sweeping tariffs on Chinese goods, in addition to previous import duties. Because China has a large trade surplus with the United States, it has more to lose from American tariffs.
To offset the loss of revenue from the U.S. market, China rerouted its exports to other countries, such as Latin American and African nations, ending 2025 with a global trade surplus.
China has not been able to replace U.S. direct investments and cannot sustain its economic growth without it. In fact, because of the trade war, foreign investment in China has collapsed in recent months.
U.S. companies have cut their investments in China to a record low, and this downward trend could jeopardize the country’s long-term economic growth.
So far, the Trump administration’s China policy has produced some positive results. In fact, since Mr. Trump was elected president, China has cut the export of fentanyl precursors, reduced restrictions to American investors and increased the import of American commodities.
After one year of economic standoff, Mr. Trump will meet with Chinese President Xi Jinping from a strong negotiating position. If he reaches a deal that significantly reduces the American trade deficit, then he will be the clear winner of the trade war with China.
FRANCESCO STIPO
President, Houston Energy Club
Miami, Florida
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