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Oct. 25, 2020, 5:12 p.m. EDT

Trade war with China didn’t boost U.S. manufacturing

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By Josh Zumbrun and Bob Davis

WASHINGTON—President Donald Trump’s trade war against China didn’t achieve the central objective of reversing a U.S. decline in manufacturing, economic data show, despite tariffs on hundreds of billions of dollars of Chinese goods to discourage imports.

The tariffs did succeed in reducing the trade deficit with China in 2019, but the overall U.S. trade imbalance was bigger than ever that year and has continued climbing, soaring to a record $84 billion in August as U.S. importers shifted to cheaper sources of goods from Vietnam, Mexico and other countries. The trade deficit with China also has risen amid the pandemic, and is back to where it was at the start of the Trump administration.

Another goal—reshoring of U.S. factory production— hasn’t happened either . Job growth in manufacturing started to slow in July 2018, and manufacturing production peaked in December 2018.

Trump’s trade advisers nonetheless say the tariffs succeeded in forcing China to agree to a  phase one trade deal in January , in which Beijing agreed to buy more U.S. goods, enforce intellectual property protections, remove regulatory barriers to agricultural trade and financial services and to not manipulate its currency.

They also say the tariffs—which  remain on about $370 billion in Chinese goods  annually—will over time force China to end unfair practices and help rebuild the U.S. manufacturing base.

An expanded version of this report appears on WSJ.com.

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