US Politics: US trade deficit jumps to 10-year high

Trump dealt blow as US trade deficit jumps

Trump dealt blow as US trade deficit jumps

Mr Trump hit roughly half of Chinese imports with taxes previous year, a move created to kick-start trade negotiations with the goal of increasing exports to that country and stopping the forced turnover of United States technology and theft of intellectual property.

A 1.9 percent drop in exports of goods and services drove the trade deficit in December to $59.8 billion, the largest since October 2008.

The US Commerce Department was quoted as saying on Wednesday that a 12.4 percent jump in the goods deficit in December had contributed to a record US$891.3 billion merchandise trade shortfall for the full year.

While Trump frequently cites the deficit as evidence of the failure of his predecessors' trade policies - even though most economists don't dwell on the indicator - the gap has increased by US$119 billion during his two years as president.

What's more, the tariffs Trump imposed on steel, aluminum and hundreds of billions' worth of Chinese goods likely contributed to the trend: During 2018, American companies that import goods from China appeared to accelerate their spending on them to avoid Trump's future import taxes. Moreover, Trump pulled the US out of the longstanding trilateral North American Free Trade Agreement, which came into force in 1994 to unify the US, Canada, and Mexico.

Today, the US economy is healthy, with economic growth relatively robust.

It remains to be seen whether Trump will agree to a removal of tariffs on Chinese goods, something Beijing is seeking in exchange for large purchases of US products, including soybeans and liquefied natural gas. However he apprised probers to anticipate the president to raise his stakes in a proposal to deflect consciousness from the declining trade situation.

US House Democrats Seek Criminal Probe of Jared Kushner Over Security Clearance
Cobb, who left the White House past year , made the glowing statements amid reports Mueller's report could soon be released . The Judiciary Committee is investigating possible obstruction of justice, corruption and abuse of power.

The rift between the merchandise USA companies sell to China and Chinese imports expanded to a record $419bn while the aggregate deficit in merchandize with all countries hopped to $891bn. They forecast Trump might now redouble his efforts to impose more and heavier tariffs on trading partners such as Germany and the European Union, for instance.

Trump's obsession with the trade deficit is a different story, and he's latched onto the deficit itself as a root cause of economic problems. Yet numerous president's critics do not blame him for this, saying some fluctuations in the trade deficit are largely beyond his control.

And even as Washington and Beijing have exchanged punitive tariffs on more than $360bn in two-way trade, the United States deficit with China expanded to an even larger $419.2bn, a new record.

But soybean exports, a crucial crop across vast expanses of the country, fell 18 percent for the year to $18.2 billion amid a Chinese boycott sparked by Trump's trade war. That typically means Americans buy more from other nations.

At the open, the Dow lost 15 points after Bloomberg reported that Donald Trump was pressuring U.S. negotiators to make a deal with China soon in the hopes of prompting a market rally.

As growth slowed in much of the world, the dollar was on the rise and exports from the United States started to become less competitive in other countries. All told, the USA tariffs covered roughly half of what the US buys from China. It increased by 18.8 percent in December to nearly $60 billion, larger than economists' predictions, as exports fell by 1.9 percent and imports increased by 2.1 percent.

Even as a silly Trump obsession with trade deficits, which don't matter much, contorts US economic policy, inattention to the USA federal deficit, which matters much more, is having serious consequences. With the USA economy doing well while other economies are faltering, and the Federal Reserve raising rates, the dollar has strengthened, making foreign products look cheaper and making our exports more expensive (i.e., less competitive) in other countries.

Recommended News

We are pleased to provide this opportunity to share information, experiences and observations about what's in the news.
Some of the comments may be reprinted elsewhere in the site or in the newspaper.
Thank you for taking the time to offer your thoughts.