Which President Best On China? From Bush To Obama To Trump To Biden

Which U.S. president – Donald Trump, Joe Biden, Barack Obama or George W. Bush – has been the best of China and export-import trade results?

With increasing tension between the world’s two largest economies – over rare earth minerals, over Chinese students at U.S. universities – it worth taking a look at some data points, some obvious, some less so.

Let’s start with an obvious one. Which of the four U.S. presidents reduced the U.S. trade deficit with China the most in a single term?

Donald Trump.

Maybe you guessed that one. Some less obvious ones are coming.

During Trump’s first term deficit declined $38.86 billion. Using U.S. Census Bureau data, I calculated the difference from the last full year of President Barack Obama’s term, 2016 – a “ground zero” or starting point for Trump – and the last full year of his first term, 2020. That decline was from $346.83 billion when Obama left office in 2016 to $207.97 billion to 2020, Trump’s last full year during his first term.

Looking solely at this measure – and too many people do – Trump could fairly be described as the most successful U.S. president in handling the trade relationship with the world’s second-largest economy since China’s ascension into the World Trade Organization at the turn of the century.

And while Covid-19 played a factor in lowering the deficit, since it briefly shuttered the U.S. and global economies, the main factor was the tariffs Trump placed on almost all imports from China, tariffs largely kept in place by his successor, Biden, who also decreased the U.S deficit with China during his term.

These two presidents succeeded a long line of presidents that could, by today’s standards, be called “globalists,” a term used today as a disparagement by some. (Not me.)

But let us not forget that the U.S. trade deficit with the world has increased six of the last eight years – three under Biden and three under Trump, even as the deficit with China has declined.

When I looked past that one measure, when I looked past the deficit with China, I saw the hand all U.S. presidents had in shaping the course of U.S. trade policy toward the Asian nation. All had their own measures of success – and failure.

Second question

So, here’s the second question: Which president hurt the ratio between U.S. exports and U.S. imports from China the most during a single term?

That would also be Donald Trump.

How so? When Obama left office in January of 2017, the percentage of U.S. trade with China that was a U.S. export during his second term averaged 20.47%. In other words, for every $100 of trade between the world’s two largest economies, $20.47 was a U.S export.

Four years later, when Trump left office, despite lowering the deficit, the ratio had slipped slightly to 20.06%.

That’s in large part because, after Trump initiated the U.S. tariffs, Chinese President Xi Jinping retaliated. China imposed tariffs on soybeans, passenger vehicles, jets, oil and other commodities – many of which have not returned to pre-Trump levels. I wrote about them in a post a week ago about the top 10 U.S. exports.

That change might not seem like much, and it’s not, but it stands out for another reason: It was the only decline in any four-year term since Bush left office. While the U.S. average with the world has generally hovered around 40% U.S. exports over the last two decades, China had been moving in the right direction.

It matters because China is the third-largest market for U.S. exports after Canada and Mexico. While Canada and Mexico are relatively mature export markets, with exports that grew 84% and 202% over the last two decades, respectively, China’s grew 317%. That is more than 50% faster than Mexico’s and almost four times as fast as Canada’s.

Third question

Time for the third question: Which president improved the ratio between exports and imports the most?

That would be Obama.

After Obama’s first term, he had increased the ratio from Bush’s second term average of 15.92% to 20.10%.

Part of that jump during Obama’s first term was what happened during Bush’s time as president. Bush served at the onset of China’s ascension to the World Trade Organization, which helped unleash the manufacturing juggernaut on the global economy. Another factor was that Obama came into office during a tough recession. Recessions tend to suppress imports since businesses and individuals have less money to spend. The 15.92% average export percentage under Bush is the lowest of the presidents in question.

Fourth question

So, let’s look at another measure: Which U.S. president increased U.S. exports to China the fastest?

Bush.

U.S. exports to China more than doubled during Bush’s second term, starting from the last year of his first term to the last year of his second. Why? As China sold to the United States and the world, more of China’s people were lifted out of poverty more quickly than at any time in human history. And guess what? They wanted to buy things – from the United States and the world. Which leads to …

Fifth question

Which U.S. president was in office when U.S. imports grew the fastest?

That would be Bush again. I foreshadowed this one above, with the reference to the “manufacturing juggernaut.” During Bush’s second term, U.S. imports from China increased 71.74% from his first term.

Sixth question

Is that gap 30.81-point gap between growth in exports over imports the largest among these presidents?

No. That would be Obama during his first term, when exports jumped 58.49% and imports 26.01%, a difference of 32.48 points. Why? Well, as referenced above, the United States was coming out of a nasty recession tied to the crisis in the mortgage market. Imports fell, the deficit actually fell, trade fell.

Seventh question

Is there a president who both reduced the U.S. trade deficit with China and increased the ratio of U.S. exports to imports from China?

That would be Biden.

As mentioned, the only time that ratio dipped this century was during Trump’s first term. It increased from 20.06%, the average for Trump, to 23.94% under Biden, the highest total since China’s ascension to the WTO and perhaps ever. It almost eclipsed the improvement Obama made from Bush’s second term.

So, which president was in the White House when things went the best with China?

First, a few asterisks.

• I could not look at Bush’s first term because the government data only goes back to 2003.
• In addition, because of that, I could not calculate the change in Bush’s export ratio. I could calculate, however, the change in total trade, exports and imports as well as the deficit, since those could be calculated using 2004 data, the last full year of Bush’s first term.
• Obama is the only president with available data to serve two consecutive terms. To prevent comparing eight years of data with four for the others, I split his terms. However, it also provided an extra set of “chances” to rank best or worst.
• Presidents are more likely to be forced to respond to events rather than have the opportunity to create them. This can have a limiting effect on their impact on annual trade statistics. That’s because some of those events affect trade directly or affect the economy, which then can affect trade.
• In a similar vein, although President Trump, particularly in his second term, is exerting a great deal of power in the area of international trade, he is an outlier in that regard.

But back to the question of which president was in office when things were going best with U.S.-China trade.

This chart, though devoid of the intangibles, might help you make the case.

Here’s what I see:

Bush grew trade most rapidly. No other president was within 40 points on total trade or total exports. Imports rose substantially as well, and the deficit began its climb northward in earnest.

Obama, in his first term, registered big gains in exports, particularly when compared to imports, thought the deficit jumped considerably. His attempt to patch together allies to hem in China, the Trans-Pacific Partnership might have helped but he failed to get it across the finish line and Trump tossed it aside immediately upon taking office.

As mentioned, these two, I would call by the standards of today, globalists.

Trump reduced the U.S. merchandise trade deficit with China but at a cost – the only president to lower overall trade with China and to break the trend of an increasing ratio of exports to imports. (He also failed to appoint appellate judges to the World Trade Organization, leaving it without any teeth to resolve disputed. His results also were entangled with Covid-19, which damaged the economy.)

Biden was able to continue to reduce the trade deficit with China, which had started under Trump, and get the ratio of exports to imports back up, a decline that started under Trump. Those are pluses. (He also failed to appoint appellate judge to the WTO and was the first president since Jimmy Carter not to negotiate a free trade agreement.)

Before Trump or Biden too much credit for reducing the U.S. trade deficit with China, it’s important to remember, as I noted earlier, that the deficit with the world has increased six of the last eight years – three under Biden and three under Trump – even as the deficit with China has gone down.

So, maybe that’s not so important after all – reducing the U.S. deficit with China – and maybe it explains Trump’s desire to place tariffs on the rest of the world. This overlooks, of course, the fact that the United States has trade surpluses with more countries than those with which it has a deficit.

Finally, every president since Bush (and even before) has understood that China offered opportunities for U.S. exports but also posed a threat through its manufacturing prowess. Trump, of course, has been the most vocal about it and lashed out the most but it’s not clear his approach will bear fruit any more than his predecessors.