Fact Check: The Facts Behind Biden's Claim the US Trade Deficit With China Is Smallest Since 2010
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Claim:
U.S. President Joe Biden accurately claimed in June 2024 that the U.S. trade deficit with China had reached its lowest level since 2010.
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U.S. President Joe Biden claimed during the June 27, 2024, debate against his Republican opponent Donald Trump that under Biden's administration, the U.S. trade deficit with China had dropped to its lowest level in 14 years:
Here is Biden's exact quote, pulled from a debate transcript:
We are [sic] the lowest trade deficit with China since 2010.
This claim has appeared on social media platforms, especially on X, since February 2024.
A country's trade surplus or deficit is the result of a simple subtraction: exported goods minus imported goods. A trade surplus means a country is selling more goods and services than it is buying from its trading partners. As the U.S. and China vie for power on the international scene, and as a fearful electorate often responds well to protectionism, politicians might use a surplus or a smaller deficit as a campaign argument to defend their record, using it as a measure of their ability to reduce their country's dependence on other nations.
Biden's claim is true. Based on government data, we created the following chart tracking the U.S. trade deficit with China from 2010 (under President Barack Obama) to 2023. In 2010, the U.S. had bought $273 billion worth of goods more than it sold to China — the world's manufacturing leader. This trade deficit soared under Trump at $418 million. While it rose in 2021 and 2022 as the world caught up on trade after the COVID-19 pandemic, it dropped again in 2023 to $279 billion:
(Census.gov)
The question of whether a trade deficit matters is up for debate, however. While some economists believe it to be a problem, many disagree, arguing instead that a high trade deficit can be a sign of a strong economy and urge world leaders not to make it a flashpoint of political strife (archived).
These economists believe that the money a country spends on goods from other nations will often return to its shores, often via financial markets. These "capital flows" in the form of foreign investments into the country, they believe, can help sustain the domestic economy. And in fact, net foreign ownership of U.S. capital has grown steadily from $2.5 trillion in 2010 to $21.3 trillion in the first quarter of 2024, according to the St. Louis Federal Reserve.
This logic has borne true under Biden, as the U.S. economy has largely outpaced the economies of the West since 2021.
Sources:
Bureau, US Census. International Trade. https://www.census.gov/foreign-trade/balance/c5700.html. Accessed 1 July 2024.
Curran, Enda. 'US Trade Deficit With China Narrows to Lowest Since 2010'. Bloomberg, 7 Feb. 2024, https://www.bloomberg.com/news/articles/2024-02-07/us-trade-deficit-with-china-narrows-to-lowest-level-since-2010. https://archive.is/09vUO.
Mankiw, N. Gregory. 'Want to Rev Up the Economy? Don't Worry About the Trade Deficit'. The New York Times, 2 Dec. 2016. NYTimes.com, https://www.nytimes.com/2016/12/02/upshot/want-to-rev-up-the-economy-dont-worry-about-the-trade-deficit.html.
The U.S. Trade Deficit: How Much Does It Matter? | Council on Foreign Relations. https://www.cfr.org/backgrounder/us-trade-deficit-how-much-does-it-matter. Accessed 1 July 2024.
U.S. Net International Investment Position. 26 June 2024, https://fred.stlouisfed.org/series/IIPUSNETIQ.
Why US Economy Is Powering Ahead of Europe's. 13 Feb. 2024. www.bbc.com, https://www.bbc.com/news/world-us-canada-68203820.