Trump frustrated: USA trade deficit soars to a 10-year high

Trump frustrated: USA trade deficit soars to a 10-year high

China has offered to buy $1.2 trillion in additional US products over the next six years in exchange for removing tariffs on both sides.

Chances are the USA may push to retain some tariffs to force China to stick to concessions. Trump asked China to abolish tariffs on United States agricultural products earlier this month. The official insisted on anonymity to discuss private conversations. While stock futures registered small gains in the hours after the news, USA equities have been down in the three days since.

WATCH: Who holds the power in potential U.S.

Over the past year, even as he imposed tariffs on foreign-made solar panels, washing machines, steel, aluminum and assorted goods from China, imports roared ahead of exports.

With the trade deficit rising and US businesses increasingly complaining about the pain from tariffs, Trump is under pressure to strike a long-term truce with China.

However, the central bank said the manufacturing sector cited concerns about the trade tensions, including "weakening global demand, higher costs due to tariffs, and ongoing trade policy uncertainty".

December's trade imbalance worsened because USA imports rose 2.1 per cent as Americans bought more household appliances, cellphones and computer products from overseas. They also said American consumers continue to patronize imported smartphones, laptops and computer accessories, most of which are made in China. By contrast, in 2018, after years of economic expansion, the gap in goods had swollen to a record $878.7 billion.

The deficit, which is the difference between the goods and services the USA buys from other countries and those it sells to them, rose to a seasonally adjusted $59.8 billion in December - an increase of nearly 19 percent.

The gap between what the United States sells and what it buys from other countries rose to $59.8 billion in December from $50.3 billion in November, the Commerce Department said.

2018 was the first year since 2007 in which not a single month had a smaller trade deficit with China than the same month in the year prior.

Trump suspended the additional tariff hikes.

But Trump's trade policy also contributed materially to the growth of the trade deficit in 2018.

Although the strengthening dollar and slowing economic growth in some regions contribute to the widening deficits, the record number may also partly be the president's own making- thanks to the trade tension he started with major trading partners including China and the Tax Cuts and Jobs Act passed in 2017.

China's ceremonial legislature was poised this week to back a law that would discourage officials in the country from pressuring US companies to hand over technology. 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.

But it's unclear whether China would actually enforce this commitment - a concern that could potentially prevent a meaningful trade agreement.

Exports also rose, but not enough to chip away at the imbalance.

Trump has said he happens to be a tariff person because he's "a smart person", but seeing trade in the narrow and binary fashion of the administration isn't smart and hasn't been regarded as smart since the 1930s. Yet Beijing would likely regard such a mechanism as infringing on its sovereignty.

"I think everybody's completely overestimating this, and there's a long way to go on that", former Rep. Peter Roskam, R-Ill., said at Monday's University of Chicago event. In sum, his entire trade policy has failed and in fact been counterproductive. And instead of pulling back on support for technology development, Premier Li Keqiang, in his report to the national legislature on 2019 government goals, promised even more such support.

Related Articles

  • R. Kelly's Girlfriends Defend Him Following Explosive Gayle King Interview

    R. Kelly's Girlfriends Defend Him Following Explosive Gayle King Interview

    She said during a visit to his Atlanta home, they engaged in sex and she says that's when she contracted the incurable disease. The latest charges against the singer span from 1998 to 2010, according to Cook County, Illinois, State's Attorney Kim Foxx.
    Tiger out of Arnold Palmer with neck strain

    Tiger out of Arnold Palmer with neck strain

    Woods' eight victories at the PGA Tour event at Bay Hille is a record, shared with Sam Snead, for most wins at a single event. Woods has played well tee-to-green this year but has been held back by some of the worst putting of his career.
    Gareth Bale's agent's comments about Real Madrid are wrong

    Gareth Bale's agent's comments about Real Madrid are wrong

    Unlike his predecessor, Solari has been given plenty of time to figure out solutions to Real Madrid's problems. Why? To serve a one-match ban, wiping his naughty slate clean ahead of the quarter-finals.
  • Immediately Update Your Google Chrome Browser to Patch Vulnerability

    Immediately Update Your Google Chrome Browser to Patch Vulnerability

    If you are reading this, there is a good chance you are doing so on a Chrome browser , based on the available market share data. We also know that it was reported by Clement Lecigne of Google's Threat Analysis Group a week ago (on February 27).
    Uh Oh: AOC Just Had Another Complaint Filed Against Her

    Uh Oh: AOC Just Had Another Complaint Filed Against Her

    Ocasio-Cortez's congressional campaign also reportedly paid Chakrabarti's company an additional $18,880 in 2017 for consulting. But while Ocasio-Cortez claimed that "none of this is whataboutism", not everyone seemed to be convinced by her reasoning.
    Anthem is reportedly crashing and bricking PS4 consoles

    Anthem is reportedly crashing and bricking PS4 consoles

    To be specific, some players have had issues whereby the game not only crashes, but completely shuts down their system. Players who've requested a refund due the issue have reportedly done so with varying degrees of success.
  • Marvel Studios’ Captain Marvel Review #3

    Marvel Studios’ Captain Marvel Review #3

    Set in the 1990s, it is about Carol Danvers , a former US Air Force pilot who joins the elite Kree military team called Starforce. Danvers only assumed the mantle of Captain Marvel - a role that has had several inhabitants , much like Spider-Man - in 2012.
    Canada's Liberal government on ropes after third high-profile resignation

    Canada's Liberal government on ropes after third high-profile resignation

    Trudeau thanked Philpott for her service in a short statement that said he would have more to say later in Toronto. He denies any impropriety but says his continued presence in the Prime Minister's Office has become a distraction.
    MPs hit out at ‘peanuts’ government Stronger Towns Fund

    MPs hit out at ‘peanuts’ government Stronger Towns Fund

    The CLP also supported formally advising Mr Hill to vote to ensure that Britain does not leave the European Union without a deal. Cox visited Brussels on Tuesday to discuss the hoped for "legally-binding" changes to the Irish backstop demanded by Brexiters.
  • Lakers Reverse Course On Signing Carmelo Anthony After Losing Streak

    Lakers Reverse Course On Signing Carmelo Anthony After Losing Streak

    He finished with four points, shooting 28.6 percent from the field, although he added seven rebounds and 11 assists. James now trails only Kareem Abdul-Jabbar (38,387 points), Karl Malone (36,928) and Kobe Bryant (33,643).
    Watch Champions League Game Online

    Watch Champions League Game Online

    The draw for the Champions League quarter-finals will be held on March 15. "Each year in the Champions League we progress and who knows this year".
    Trump moves to end special trade treatment for India

    Trump moves to end special trade treatment for India

    Washington has a 21-billion-dollar red ink in trade balance with New Delhi in 2018, according to statistics provided by the U.S. The Trump administration has been pushing for greater access to Indian markets for dairy products and medical equipment.