How Trump’s First Trade War With China Gave Rise to New Targets
As Donald Trump unleashes round two of his trade wars, an analysis of the way global commerce has rewired since his first presidency shows how Vietnam, Mexico and Canada are exposed this time around as a new era of American protectionism unfolds.
The prime target of Trump’s 2018-19 trade war, China has dramatically cut its trade reliance on the US as it beefed up sales to Southeast Asian neighbors and Russia. Vietnam and Mexico, meantime, have led the way in deepening trade ties with the US, a Bloomberg News analysis of trade data shows.
The partial decoupling of the world’s two largest economies is reflected in the numbers. Between 2018 and 2024, China’s share of total US trade (measured as the sum of goods exports and imports) dropped from 15.7% to 10.9%, while the US’s share in China’s trade fell from 13.7% to 11.2%.
Shifting Trade Links
China’s trade surplus with the US — something Trump sees as a key imbalance that must be rectified — remains the world’s largest. But it’s been declining as the Biden administration maintained Trump’s tariffs and layered on various export controls designed to curb Beijing’s access to key technologies.
Mexico’s, Vietnam’s and Canada’s surpluses with the US have climbed since Trump’s first term. Some of that comes down to re-routing as Chinese companies set up shop in places like Mexico and Vietnam to skirt tariffs as they sold their wares to America. Trump officials are reviewing those and other practices, with reports due back to the president on April 1 — a date that may herald an escalation in tariff actions.
Changing Contributors to the US Trade Deficit
When the value of exports to the US is compared with a nation’s gross domestic product, Trade War I target China shows up as less vulnerable to US tariffs than Mexico, Vietnam and Canada. America’s continental neighbors have already been threatened with steep trade levies from Trump on the grounds they aren’t doing enough to stem the flow of illegal immigrants and fentanyl.
Close US Trade Ties Become a Vulnerability
Note: All data from the US Census Bureau represents total US import value in 2023. X-axis is on a log scale
Trade isn’t meant to be a zero-sum game, but in the era of US-China great power rivalry it is often viewed that way. The globe below shows the trade partners either the US or China have deepened trade links with. And in a sign that globalization is down but not out, it also highlights economies that both have grown mercantile links with.
China Diversifies Global Trade Links as it Reduces Ties With US
Note: Stable is defined as change between -0.1pp and +0.1pp with both the US and China