US Trade Deficit Surged to 10-Year High In December

March 6, 2019 by Dan McCue
From left, Treasury Secretary Steven Mnuchin, Commerce Secretary Wilbur Ross, U.S. Trade Representative Robert Lighthizer and White House National Trade Council Director Peter Navarro attend a signing ceremony of the Section 232 Proclamations on Steel and Aluminum Imports at the White House Thursday, March 8, 2018 in Washington, D.C. (Olivier Douliery/Abaca Press/TNS)

The United States’ trade deficit surged to a 10-year high in December, reaching $59.8 billion despite the Trump administration’s efforts to end and renegotiate trade deals the president claims place the nation at an economic disadvantage.

Figures released by the Commerce Department Wednesday also show that for all of 2018 the trade deficit was $621 billion, up from $552.2 billion in 2017.

Since taking office the administration has insisted reining in the trade imbalance between the U.S. and other major world economies would help revive American manufacturing and related sectors and lead to a prolonged period of robust economic growth.

But with each successive report during Trump’s presidency, the trade deficit has only continued to grow.

On an annual basis, the trade gap in 2018 reached the largest total since 2008, when it was $708.7 billion, the Commerce Department said.

The $59.8 billion jump in December was the widest monthly gap in trade reported since October 2008. It represented a $9.5 billion increase over the $50.3 billion in November.

The widening of the trade deficit was due to a 2.1 percent increase in imports to $264.9 billion and a 1.9 percent decrease in exports, to $205.1 billion the Commerce Department said Wednesday.

The numbers are a sign that slowing growth in Europe and China was reducing demand for U.S.-made aircraft and petroleum products at exactly the same time that a stronger dollar was inspiring Americans to buy more household goods and computers and cell phones produced overseas.

Wednesday’s report will likely be most frustrating to the White House when it comes to China. In September, the Trump administration imposed tariffs on over $250 billion worth of Chinese goods to pressure Beijing to reduce the trade deficit between the two countries and to stop the theft of intellectual property.

China retaliated by imposing tariffs on $60 billion of U.S. goods.

The face-off actually contributed to a widening of the gap as U.S. companies sought to import more goods from China ahead of Trump’s initial plan to raise duties on $200 billion of Chinese products from 10 percent to 25 percent on Jan. 1.

Trump delayed the planned tariff increase to March 2 and recently postponed it indefinitely, asserting that ongoing talks with China had made substantial progress towards a deal.

But how the talks were shaking out was very much an unknown in December, and buying in the face of uncertainty pushed the trade deficit between the two countries to $38.7 billion in December and $419.2 billion for the year – an all-time record.

The trade deficit with China was also the largest of any nation.

The next highest deficit was between the U.S. and the European Union (at $15.8 billion), following by that between the U.S. and Mexico ($8.8 billion).

The United States ran a record surplus last year with South and Central America.

While it is just one indicator, economists tend to view a rising trade deficit as a drag on sustained future growth.

The dampening effect of Wednesday’s trade numbers will likely show up when the government issues its final calculations of the nation’s gross domestic product in the fourth quarter of last year. The initial estimate suggested the economy expanded by 2.6 percent during that three-month period.

Trade

ASEAN, China, Other Partners Sign World's Biggest Trade Pact
Trade
ASEAN, China, Other Partners Sign World's Biggest Trade Pact

China and 14 other countries agreed Sunday to set up the world’s largest trading bloc, encompassing nearly a third of all economic activity, in a deal many in Asia are hoping will help hasten a recovery from the shocks of the pandemic. The Regional Comprehensive Economic... Read More

Spike In Phony PPEs at Peak of COVID-19 Crisis Shines Spotlight on Issue of Illicit Trade
Trade
Spike In Phony PPEs at Peak of COVID-19 Crisis Shines Spotlight on Issue of Illicit Trade
September 11, 2020
by Dan McCue

WASHINGTON - It wasn't unexpected. Counterfeits and knockoffs are all around us, from sneakers to handbags and even cures for the common cold. But a surge in demand for personal protection equipment, not to mention tobacco, alcohol and cleaning products, at the peak of the coronavirus... Read More

Wine Sellers Brace for Second Round of Tariffs
Business
Wine Sellers Brace for Second Round of Tariffs
August 7, 2020
by Dan McCue

WASHINGTON - As if a global health crisis wasn't enough to have on their plate, wine sellers are bracing for the imposition of another round of tariffs that could raise the price of imported European wines and other products by as much as 100%. Though no... Read More

UK’s Truss in Washington to Press for Post-Brexit Trade Deal
Trade
UK’s Truss in Washington to Press for Post-Brexit Trade Deal

U.K. International Trade Secretary Liz Truss will meet with her U.S. counterpart Robert Lighthizer in Washington on Monday as part of the third round of talks to reach a trade deal between the two countries. Prime Minister Boris Johnson put an agreement with the U.S. at... Read More

Senate Confronts China Threat to Beat Out U.S. Economy
Geopolitics
Senate Confronts China Threat to Beat Out U.S. Economy
July 23, 2020
by Tom Ramstack

WASHINGTON - The U.S. Senate tried to figure out a response Wednesday to a trade war with China that is taking on new urgency during the coronavirus pandemic. Republican and Democratic senators identified Chinese computer hackers and patent thieves as threats to the U.S. economy that... Read More

López Obrador Heading to Washington to Meet Trump Amid Controversy
Trade
López Obrador Heading to Washington to Meet Trump Amid Controversy

MEXICO CITY — Donald Trump notoriously kicked off his presidential bid in 2015 by disparaging Mexican immigrants as drug dealers, criminals and “rapists,” adding: “And some, I assume, are good people.” During his own campaign two years later, future Mexican President Andrés Manuel López Obrador assailed... Read More

News From The Well
scroll top