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U.S. trade deficit hits the highest level in nine years in 2017

U.S. trade deficit hits the highest level in nine years in 2017

Nevertheless, the goods trade deficit with Mexico increased to $71 billion, while that with China rose by $375 billion - the highest level on record.

The increased deficit will likely put pressure on the Trump administration to aggressively renegotiate trade deals and enact new policies, says the Post.

Others attribute the growth to a failure on the part of the administration to make major changes to America's trade policy. In the fourth quarter of 2017, a larger than expected trade deficit depressed economic growth by slightly more than a full percentage point, so that the economy grew at just a 2.6 percent rate.

The U.S. trade deficit widened to the biggest monthly and annual levels since the last recession, underscoring the inherent friction in President Donald Trump's goal of narrowing the gap while enjoying faster economic growth.

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The commodity trade with China increased by 8.1% past year to a record 375.2 billion United States dollars. According to the Commerce Department, the foreign-trade gap in goods and services increased 5.3% from the prior month to a seasonally adjusted $53.1 billion in December, the highest level since October 2008.

At the same time, the latest trade figures also reflect the rising value of commodity imports due to higher commodity prices. -China trade deficit increased 8.1 percent to a record $375.2 billion a year ago.

Imports from Mexico also hit a new record high. While improving overseas growth and a weaker dollar bode well for exports, Trump's efforts to seek more favorable terms with US trading partners remain a work in progress, and his tax-cut legislation may cause the deficit to widen further. Imports from China and Mexico hit record highs The year 2017 saw the USA importing more foreign-made cars, computers, cell phones and other consumer goods, much of which were produced in China. Tax reform, which is strengthening the economy already, may push the trade deficit even higher.

Exports rose 1.8 percent sequentially, stimulated by food and beverage products, industrial supplies and capital goods.