Donald Trump demands $1 trillion trade deficit with China be fixed before any deal

US President Donald Trump ruled out any trade agreement with China unless the US trade deficit with the country — which he claims exceeds $1 trillion — is resolved.

“We have a $1 trillion trade deficit with China,” Trump told reporters aboard Air Force One. “Hundreds of billions of dollars a year we lose to China, and unless we solve that problem, I’m not going to make a deal.”

He added, “I’m willing to make a deal with China, but they have to solve this surplus. We have a tremendous deficit problem with China… I want that solved.”

Tariffs driving US investment, says Trump

Trump defended his sweeping new tariff regime, stating that it has led to unprecedented domestic investment in key industries.

“Because of the tariffs, we now have $7 trillion of committed investments in automotive manufacturing plants, chip companies, and other types of businesses — at levels that we’ve never seen before,” Trump said.

Deficits are 'a loss'

Trump said his administration has spoken with leaders across Europe and Asia, many of whom are eager to negotiate trade agreements — but he won’t proceed while deficits remain.

“A deficit is a loss,” he said. “We’re going to have surpluses, or we’re, at worst, going to be breaking even.”

He emphasised that China is “the worst in the group because the deficit is so big, and it’s not sustainable.”

“I was elected on this,” he added, referencing his long-standing stance on trade imbalances.

New tariff breakdown: China, Canada, Mexico targeted

Under Trump’s latest policy, a 10% baseline tariff now applies to all imported goods entering the United States. Countries with larger trade surpluses face even harsher penalties.

China, already subject to a 20% tariff earlier this year, will now face an additional 34% reciprocal tariff, totaling 44% in duties.

Canada and Mexico are exempt from reciprocal tariffs but will still be subject to a 25% import tariff on general goods. Also, Canada will face a 10% tariff on energy exports to the US.