US-Asia Trade Deficit Hits $70.8B Despite Trump's Tariff Push

$70.8 billion—that's how much the U.S. trade deficit with Asia grew to in November, even as the Trump administration doubles down on tariffs to rebalance trade. The number reveals a fundamental truth about global commerce: plug one hole, and the water finds another way through.

New Commerce Department data shows that while imports from China did fall, the victory was pyrrhic. Southeast Asian nations stepped into the breach, with higher inflows from the region more than offsetting any gains from reduced Chinese imports. It's economic whack-a-mole on a trillion-dollar scale.

The Great Trade Shuffle

Trump's China-focused tariff strategy is working exactly as designed—and that's precisely the problem. Chinese imports are down, bilateral deficits have shrunk, and Beijing is feeling the pressure. But American consumers and businesses still need the same products they've always needed.

Enter Vietnam, Thailand, and Malaysia. These Southeast Asian economies have become the new darlings of American importers seeking to dodge tariff bullets. Vietnamese furniture makers are already expanding beyond traditional markets, seeking "tariff shelter" in the Middle East and India while simultaneously ramping up U.S. exports.

The result? America's overall Asian trade deficit expanded rather than contracted. It's a textbook example of trade diversion—economic activity doesn't disappear, it just finds new pathways through the global supply chain maze.

Winners, Losers, and the Supply Chain Scramble

This reshuffling creates clear winners and losers. Southeast Asian manufacturers are experiencing an unexpected windfall, with factories working overtime to meet redirected demand. Countries like Vietnam have seen their trade relationships with the U.S. strengthen dramatically.

American companies, meanwhile, face a costly adjustment period. Switching suppliers isn't like changing your coffee brand—it requires rebuilding relationships, ensuring quality standards, and often accepting higher costs during the transition. The Port of Los Angeles reports that while China volume dropped, total trade volume actually grew as new Asian partners filled the gap.

For consumers, the math is simple but painful: tariffs don't eliminate the need for imported goods, they just make them more expensive. Whether the product comes from Shenzhen or Saigon, Americans are still paying premium prices.

The $621 Billion Question

The Trump administration has threatened to expand its tariff regime to cover $621 billion worth of Asian trade, framing it as a national security imperative. But November's data raises uncomfortable questions about this approach's effectiveness.

If tariffs on China simply redirect trade flows rather than reducing overall deficits, what happens when you apply the same logic to all of Asia? Economic theory suggests the trade would shift to other regions—Latin America, Africa, or Europe—rather than disappearing entirely.

This dynamic is already playing out globally. While the U.S. and China engage in their trade standoff, India and the EU just finalized a landmark trade deal, creating new partnerships that bypass American influence entirely. The world isn't waiting for Washington to figure out its trade strategy.

Beyond the Tariff Toolbox

The persistent deficit growth despite aggressive tariff deployment suggests that America's trade challenges run deeper than any single policy tool can address. Trade deficits reflect fundamental economic realities: savings rates, consumption patterns, and industrial competitiveness.

Some economists argue that instead of focusing on where America buys its goods, policymakers should concentrate on what America sells. South Korea is already moving to pass a U.S. investment bill as Trump threatens tariff increases—a reminder that trade relationships work both ways.

The data also highlights the interconnected nature of modern supply chains. When Japan's exports to the U.S. fell for the first time in five years in 2025, it wasn't just about bilateral trade—it reflected broader shifts in global manufacturing networks that transcend any two-country relationship.