United States trade deficit surges to 10-year high in 2018

United States trade deficit surges to 10-year high in 2018

United States trade deficit surges to 10-year high in 2018

Early comments by economists and other observers on social media included remarks such as this one by commenter Catherine Rampell, who tweeted: "Trump is obsessed with trade deficits, (incorrectly) believing them a measure of who's winning and who's losing".

The trade deficit in December was driven by 1.9 percent drop in exports of goods and services to a 10-month low of 205.1 billion US dollars. 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.

On the China front, reports continue to be published that Trump is pushing for a deal, in order to be able to announce victory and boost his 2020 campaign for the USA presidency.

The jump in the so-called real goods trade deficit suggests that the drag from trade on fourth-quarter gross domestic product growth was probably bigger than the 0.22 percentage point estimated by the government last week.

"We do have concerns about certain aspects of the trade policy pursued by the current USA administration", Malmstrom said in a statement last week before the meeting, according to CNBC.

"This is a major reason why economists say, 'You really don't want this as your scorecard, "' said Phil Levy, a former senior economist for trade with president George W. Bush's council of economic advisers.

Reducing the gap is a key plank of president Donald Trump's policies. And by themselves, they don't typically produce any meaningful change in the trade deficit. They reflect broader trends in the economy, including savings and investment rates. But even if the purchases amount to hundreds of billions of dollars over some years, that still wouldn't guarantee a major impact on the USA trade balance. We were at the tail end of the Great Recession then, and, because the economy was bad, Americans bought less stuff from overseas. Democrats, if they play this smart, have a chance to make the case Trump is too ignorant and gullible to protect the well-being of USA consumers, workers and producers. To the extent that it provided a boost to the economy, it led to increased demand for consumer goods-many of them imported-and increased demand from businesses.

The US, he said, was "booming like never before", while other countries were "doing very poorly and that makes it even harder for us to be successful".

So in some ways then, Trump's preferred metric of "winning" is a victim of his own fiscally driven economic success.

The reality is that trade friction could remain a fixture of American policy.

He has picked trade wars the world over, with friends and foes alike. "A competitive dollar is the most important tool we have to spur economic growth and job creation in the USA economy", said Michael Stumo, chief executive of the Coalition for a Prosperous America. Imports of goods and services increased 2.1 percent to US$264.9 billion in December.

Imports of goods ($2.6-trillion) and services ($557.9bn) reached new all-time highs, the report showed. That imbalance fell in the aftermath of that year's financial crisis as the United States and other nations plunged into severe recessions.

A ship loaded with containers is pictured at Yusen Terminals (YTI) on Terminal Island at the Port of Los Angeles in Los Angeles, California, U.S., January 30, 2019. The U.S.is also pushing China to open its markets in services and other sectors.

Trump has pledged that once his brilliantly negotiated deals go through - the new North American Free Trade Agreement gets ratified by Congress, China fully capitulates to all his wildest demands, the European Union and Japan suddenly decide to buy more of our cars, etc. - our balance of trade will turn around.

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