If you went by the media’s reports on the U.S. trade deficit, you might think that the U.S. economy was in a bad position because it imported a record amount more than it exported in December 2017.

The U.S. trade deficit widened more than expected in December to its highest level since 2008, as robust domestic demand pushed imports to a record high, adding to the stiff headwinds faced by the Trump administration’s “America First” trade policies.

The import-driven surge in the trade gap reported by the Commerce Department on Tuesday also suggests 3 percent annual economic growth may be hard to achieve. Imports, which subtract from gross domestic product, could get a further boost from a $1.5 trillion tax cut package that became effective in January.

But surprisingly, China didn’t appears to be a major culprit, even though the U.S.-China trade deficit “jumped to a record $375.2 billion” overall in 2017.

Imports from China fell 7.6 percent in December….

Exports to China surged 7.5 percent to a record high in December. As a result, the U.S.-China trade deficit declined 13 percent in December.

What does that look like in terms of the year over year growth rate of the value of trade between the U.S. and China? The following chart shows the answer (along with 383 additional months of historic U.S.-China trade data!):

We find that the year over year growth rate of U.S. exports to China jumped upward in December 2017 after having dipped in the previous two months to near-zero growth levels. That dip is somewhat misleading, because it is largely attributable to a year-over-year decline in America’s soybean exports to China that typically peak in the months of October through December each year, where these months in 2016 had seen all-time record levels of U.S. soybeans go to China.

Looking back at the year over year growth rates, we see that the magnitude of the rebound in the growth rate of U.S. exports to China in December 2017 nearly matches the year-over-year increase in the U.S.’ imports of goods from China, which confirms a strong close to 2017 for both China and the U.S. At the same time, we see that 2017 was good for both nations.