USA trade deficit hits 10-year high as Trump trade wars backfire

USA trade deficit hits 10-year high as Trump trade wars backfire

Going forward. For days, there have been reports of progress in the trade talks between the US and China and while negotiators will take notice of the deficit number, it's not clear exactly whose hand it strengthens in the ongoing talks.

"Billions of dollars, right now, are pouring into our Treasury", he told the Conservative Political Action Conference, adding that Chinese exporters are absorbing nearly the entire burden of the tariffs.

"Consensus can be reached in the trade war", Jiangsu province representative Fei Shaoyun said in an interview echoing much of what Lou said. It is, by and large, an accounting measure that often moves in directions inverse to the health of the United States economy.

That means that the United States is importing more in goods and services than it sells overseas - despite two years of Trump's "America First" policies. "It's not an accident".

The study by Goldberg, Pablo Fajgelbaum of UCLA, Patrick Kennedy of the University of California, Berkeley, and Amit Khandelwal of Columbia also found that consumers and USA companies were paying most of the costs of the tariffs.

President Donald Trump's "America First" policy led to new trade agreements with Canada and Mexico and has driven the administration to seek a more favorable deal with China.

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. Data from December 2018 was released Wednesday.

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.

That happened despite the new barriers to trade raised by the Trump administration. They also point to his renegotiation of Nafta as something that will help reduce the U.S. trade deficit in the long run.

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During a 2016 campaign speech, candidate Trump referred to the trade deficit as a "politician-made disaster", vowing to change it quickly if elected. The tariffs he threatened and then imposed on Chinese imports caused a rush by importers to get ahead of the new duties that fueled an increase in incoming traffic at West Coast ports a year ago.

That study also found 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.

The trade gap with China, which has received the brunt of the president's ire for its "unfair" trade practices, also reached a record high of $419 billion.

The dollar is now valued 19 per cent above its 10-year average against the currencies of major United States trading partners, according to Federal Reserve data.

The strength of the USA dollar has also not been helpful to the administration's aims, as it makes imports relatively cheaper while increasing the price of US products to the rest of the world.

But advocates of a stronger U.S. currency policy argue that Trump himself carries plenty of blame.

This is because increased income is likely to bring more consumption, which fuels the need for foreign goods, a fundamental of the trade deficit.

Some advisers argue that the tariffs should only be fully removed once China lives up to all of its pledges, which could take months or even years. In tandem, those two factors have increased the spending of various US purchasers, from consumers to corporations to government agencies.

"The widening trade balance in December is a blow to US trade policy". "There's a lot going on below the surface here, " he said.