Monday, May 5, 2025

MY CONTENTION THAT THE PROFIT MADE BY U.S. COMPANIES ON MERCHANDISE PURCHASED FROM CHINA COVERS THE "TRADE DEFICIT" SEVERAL TIMES OVER

In 2024 the United States purchased $439B in goods from China while selling $144B to China.  The $295B "trade deficit" is horrifying to Donald Trump, but that's certainly not the entire story.

While I couldn't find an exact, overall percentage, most of what America buys from China is resold.  So buyers add overhead and profit to the original cost to reach the actual selling price.

60 to 80% of what Walmart sells, 71% of what Amazon sells, 80-95% of what Apple sells, was bought from China.  So, most of what the U.S. buys from China is for resale and I'd be very surprised if the profit from these sales doesn't cover the "trade deficit" several times over.


This pack of flexible, plastic straws retails for $1.98 in Walmart.  The price from the factory may be .30 or lower.  Overhead, including transportation, warehousing and stocking(labor) is added, along with profit.  A small amount of shrink, possibly around 1% will cover theft or damage.  This seems likely to be a very profitable item, with a large markup and the actual profit may be close to $1.00.    

If Donald Trump, for example, decided the U.S. would no longer trade with China because of what he sees as an unfair "trade deficit," profit that's likely several times that so-called deficit would be wiped out resulting in a huge reduction of our GNP.  

1 comment:

  1. China stuff is fun. Flowers, decorations, coloring books, puzzles, summer stuff etc The USA is destroying our happiness when we shop.

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