The US merchandise trade deficit increased by $83.8 billion, or 10.4 percent, to $891.3 billion in the past year, the Commerce Department said.
Trade gaps with China, Mexico and the European Union also reached all-time highs, despite the USA slapping tariffs on hundreds of billions in imports from its largest trading partners.
China retaliated, and the simmering trade war inflamed financial markets a year ago. He said trade talks were "moving along nicely". Trump has now threatened to end the preferential trade treatment that allows India to export $5.6 billion of goods duty-free to the U.S. He also wants to strip Turkey of its GSP status. They also said American consumers continue to patronize imported smartphones, laptops and computer accessories, most of which are made in China. It was the tariff created to get China's attention. As exports from the United States to China grew, imports moving the other way fell significantly.
A deteriorating balance in the country's trade in goods was the chief reason behind the worsening trade picture, as Americans continued to buy foreign-made computers and their accessories but sales of capital goods, including those of civilian aircraft, dropped.
Media outlets and political pundits are having a field day criticizing Trump's protectionist trade policies for backfiring and hurting the USA economy, but not those of the countries it was directed against.
When adjusted for inflation, the goods trade deficit surged 10.0 billion US dollars to a record 91.6 billion USA dollars in December. That increase occurred despite the Trump administration's decision to impose several rounds of new tariffs a year ago on imported steel, aluminum, and thousands of Chinese-made goods, all with the intention of reducing how much America imports. The previous trade deficit recrod, of $838.3 billion, was in 2006, under President George W. Bush, as the housing bubble peaked. The goods shortfall topped the 2006 record of US$838.3 billion, set as the housing bubble was peaking, and marked the third consecutive year of rising deficits.
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The "Tariff Man", who has described tariffs as "the greatest negotiating tool in the history of our country" and has said that "trade wars are good, and easy to win", created a benchmark for the success, or failure, of his trade policies. This is because increased income is likely to bring more consumption, which fuels the need for foreign goods, a fundamental of the trade deficit.
McDaniel served on President George W. Bush's Council of Economic Advisors and says she often needed to convince White House officials not to see the trade deficit as the measure of good trade policy. He claims that the USA is being "ripped off" by other nations.
"The trade deficit is grossly misunderstood". Former San Antonio mayor Jullian Castro, whose state is the fifth most reliant on trade knows the risk of trade wars.
The annual deficit in goods and services increased by $68.8bn, or 12.5 per cent, Commerce Department data showed Wednesday. And that, Cohn explained to the president, is a good thing, as folks buying less expensive goods with a stronger dollar have more money to spend on services, which make up more than 80 percent of our gross domestic product.
Trump had pledged both faster growth and lower trade deficits. Which could mean a boost to auto and auto-parts imports, which would contribute to. you guessed it. a wider trade deficit.
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