(Bloomberg) -- American planes, soybeans and automobiles would be prime targets in an all-out trade war with China, if export data are any indication.
The U.S. ran a $375 billion merchandise trade deficit with China in 2017, more than three times the size of the bilateral shortfall 15 years earlier. President Donald Trump has seized on the ballooning deficit figures to push Beijing to level the playing field for American businesses.
But his proposal to levy tariffs on as much as $150 billion in Chinese imports has disturbed the business community and rattled financial markets. The International Monetary Fund has warned that escalating trade tensions could undermine the broadest global upswing in years.
China has threatened to respond with its own tariffs. Hoping to break the impasse, the president this week dispatched top economic advisers including Treasury Secretary Steven Mnuchin for talks with Chinese officials in Beijing.
The data for trade in goods suggest China’s ability to retaliate is limited, because it imports far less from U.S. producers than it exports. That doesn’t mean Beijing won’t pursue other means of retaliation that could prove damaging to America’s companies and economy.
The value of U.S. merchandise shipped to China totaled $130.4 billion last year. Commercial aircraft was the biggest export at $16.3 billion, followed by soybeans at $12.4 billion and passenger cars at $10.5 billion. Semiconductors and industrial machines rounded out the top five.
The top five categories of U.S. exports to China represented almost 40 percent of the value of American shipments to the world’s second-largest economy in 2017. Over the last five years, the largest percentage increases in shipments from those sectors were in aircraft and auto manufacturing, indicating those industries would suffer the most if Beijing decides to drop the hammer.
Taking aim at America’s biggest exports risks causing political pain for the president. Aircraft maker Boeing Co. has operations across the U.S., including production facilities in South Carolina, a state Trump won in the last election. Soybeans are a major crop in states the president will be looking to hold or swing in 2020, including Minnesota, Iowa and Indiana. Trump rode to power partly due to his popularity in auto-industry states such as Ohio and Michigan.
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