If U.S. trade data tell a story, the Trump administration may be looking to change the narrative.
As the president aims to make good on campaign promises to "get tough" on U.S. trading partners, his administration is reportedly considering a major change in the way the U.S. reports its trade deficits.
The main idea being discussed, according to a report posted by The Wall Street Journal on Sunday, would involve dropping a category of the data known as "foreign exports" or "re-exports" from the overall tally of U.S. exports.
That category covers a wide variety of transactions that involve goods that are not made entirely in the U.S. and shipped for consumption overseas. As the global supply chain has gotten more complex — with goods made in multiple countries at various stages of production — that category has grown.
Reporting the overall trade deficit without that "re-export" category would swell the U.S. trade deficit, which would give Donald Trump added leverage as he tries to renegotiate new trade deals.
The White House did not immediately respond to a request for comment.
Here's how the trade data work:
What, exactly, is an "export"?
It sounds simple. But when it comes to trade data, nothing is simple.
The Census Department is the official keeper of the U.S. trade tally, but it relies on international standards to report the flow of thousands of categories of goods and services in and out of the country.
Exports include goods shipped out of the country that are 1) entirely made in the U.S. 2) produced in the U.S. with components made overseas, 3) goods that entered the U.S. for packaging or minor processing and 4) goods shipped here for sale by consignment, like artwork. Goods that are just passing through — like a Japanese car shipped to Long Beach, California, for a Canadian car dealer — don't make the count.
So what is a "re-export"?
The list of export categories also includes one paradoxical label "foreign exports," consisting of goods that are shipped to the U.S. and then re-shipped overseas with little or no change in condition. They could be goods that were marked up for resale or returned unsold to the country of origin. That's why they're also known as "re-exports."
Why does Trump want to exclude re-exports?
First, doing so would make the U.S. trade deficit look worse — in some cases, much worse.
Eliminating the "foreign exports" category, for example, would make the trade deficit with Mexico nearly twice as big.
Here's how the change would have affected the overall deficit numbers in 2014: