The U.S. Commerce Department reported Wednesday that in December, the country's deficit in its trade in goods and services rose 19 per cent from November and for the year as a whole was a record US$621 billion.
And the trade gaps with China, Mexico and the European Union also reached at all-time highs even though Washington slapped tariffs on hundreds of billions in imports from its largest trading partners. The second study referenced above also showed that "workers in Republican-leaning counties, especially in farm states, suffered the greatest losses from tariffs that USA trading partners imposed in retaliation for the president's actions".
China retaliated, and the simmering trade war inflamed financial markets past year. So there has been less demand for USA exports.
The tariffs he threatened and then imposed on Chinese imports caused a rush by importers to get ahead of the new duties that fuelled an increase in incoming traffic at West Coast ports previous year.
The monthly US trade deficit ballooned to a record $59.8 billion last December, according to new data released Wednesday.
"Exports increased $148.9 billion, or 6.3 percent". No matter how many times Merkel points to German plants in the USA producing cars and employing Americans, Trump doesn't get it.
Wednesday's figures illustrated how the trade war boosted the trade deficit with China: merchandise exports to the Asian nation fell $9.6 billion past year, while imports rose $34 billion.More news: R. Kelly's 'girlfriends' come to his defense in CBS interview
"History shows that in times of USA economic growth we tend to run higher deficits just because USA consumers and businesses import a lot of their consumption".
The trade deficit has deteriorated despite the White House's protectionist trade policy, which President Donald Trump said is needed to shield USA manufacturers from what he says is unfair foreign competition.
"The costs of the trade war are quite large relative to optimistic estimates of any gains that are likely to be achieved", wrote the trio of economists.
Trump's supporters insist he's tackling that via his trade negotiations with China and other United States trading partners. It was the tariff created to get China's attention.
The trade deficit is the difference between how much goods and services the USA imports from other countries and how much it exports.
After eliminating the influence of prices, which renders the numbers used to calculate gross domestic product, the goods-trade deficit widened to $US1.01 trillion in 2018 from $US935.3 billion in 2017. Oddly Trump, ever the sucker for a dictator, hasn't done anything on that front, perhaps because his "friend" President Xi rolled out the red carpet and complimented Trump. "If President Trump really is focused on economic growth, he should be welcoming these big trade deficits". The result has been more imports than exports. A trade deficit reducing tariff would have to be much higher, perhaps even exceeding the 25 percent that was supposed to apply two months ago. A higher-valued dollar, compared with other nations' currencies, makes the goods that Americans import relatively more affordable and our exports comparatively more expensive overseas. Tariffs lead to higher prices paid by consumers, so when the president and administration officials cite an influx of tariff-related funds to the US government, USA consumers are largely the ones footing the bill. While the United States and China are poised to negotiate a deal to end their trade dispute, the proposed deal amounts "much ado about nothing much", as Paul Krugman puts it. In sum, his entire trade policy has failed and in fact been counterproductive.