USA trade deficit jumps to 10-year high in 2018

USA trade deficit jumps to 10-year high in 2018

USA trade deficit jumps to 10-year high in 2018

Turning back to goods trade, vehicles are another major weakness with monthly exports at $12.3 billion for a second month and the lowest since September 2017 with imports of $32.1 billion at a record high.

What does the data say?

The deficit in goods and services during December also hit a near 10-year high of almost 60 billion dollars.

'The trade deficit exploded previous year despite the Trump administration efforts to make America great again, and the trend is unlikely to get any better in 2019, ' said Chris Rupkey chief economist at MUFG in NY.

"A bilateral balance doesn't really tell you anything about what the economy is doing", Scott Lincicome, an adjunct fellow at the libertarian Cato Institute, told The New York Times a year ago, "just like my bilateral deficit with my grocery store doesn't tell you anything about whether I'm in debt".

When adjusted for inflation, the goods trade deficit surged $10.0 billion to a record $91.6 billion in December.

Data for 2019 is not yet available. Economists from the University of California, Los Angeles; Yale University; and the University of California, Berkeley released the latest draft of an economic study this week that showed that Americans footed the entire tariff bill in 2018. The jump in the so-called real goods trade deficit suggests that trade was probably a bigger drag on fourth-quarter gross domestic product than initially estimated by the government.

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Trump rejects conventional economic views of trade, which hold that deficits are not always a negative for the economy as they can allow cheaper goods and services be made available to more people while promoting job creation. He watched US and Asian stocks rise on his decision to delay an increase in tariffs on Chinese goods scheduled for March 1, one of the people said. "Additional trade barriers will only make things worse", Beth Anne Mumford, state director of the Koch Network-backed Americans for Prosperity PA, said in a statement.

The gap worsened because Americans bought more household appliances, cell phones and computer products from overseas, while foreign demand for civilian aircraft and oil products declined, dragging down US exports.

Exports of industrial supplies and materials fell by 2.1 billion USA dollars, with shipments of petroleum products dropping 0.9 billion US dollars and crude oil decreasing 0.5 billion US dollars. This led to USA exports of soybeans to drop off by 97 percent during the first seven weeks of the 2018-19 marketing year, compared to what they had been the year before. Simultaneously, U.S. exports fell 1.9 per cent as foreign demand for civilian aircraft and oil products declined.

Robert Scott, senior economist at the left-leaning Economic Policy Institute, said Trump's failure to tackle what he sees as a global misalignment in currencies that requires a depreciation of the dollar has been the main cause of a rising trade deficit.

The trade deficit has deteriorated despite the White House's protectionist trade policy, which President Donald Trump said is needed to shield US manufacturers from what he says is unfair foreign competition. We can't have that. "We have to do what we have to do". The United States had record imports from 60 countries in 2018, led by China, Mexico and Germany.

"The risk could be more to the downside, but on the other hand this would take away some certainty and that is good for companies looking to invest", said Sebastien Page, head of global multi-asset strategy at T. Rowe Price in Baltimore.

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