USA trade deficit jumps amid surging imports

Saul Bowman
February 7, 2018

Within the former, imports of goods jumped by $6.0bn to reach $210.8bn, led by increases of $1.8bn in purchases of pharmaceutical preparations from overseas, of $1.7bn in those of cell phones and other household goods, of $1.1bn in passenger cars and of $0.8bn in capital goods. The goods deficit with China rose 8.1 percent to hit a record $375.2 billion in 2017, while the trade gap with Mexico rose to $71.1 billion. Even though Trump administration has made the goal to narrow the trade gap through his "America First" trade policies, it is really hard to achieve when the domestic economy is expanding and the customers' appetite for foreign-made products is strong.

Trade deficit in the usa widened in the month of December, coming in above expectations.

The deficit also grew in the final month of the year, adding 5.3 percent to reach $53.1 billion in December, the highest since October 2008, and overshooting an analyst forecast by $800 million.

U.S. President-elect Donald Trump speaks at the USA Thank You Tour event at the Wisconsin State Fair Exposition Center in West Allis, Wisconsin, U.S., December 13, 2016.

In 2017, the USA trade deficit jumped by 12.1% to a nine-year high of 566 billion Dollars.

Recently, Trump levied steep tariffs on imported solar panel technology and washing machines, which immediately boosted prices for US consumers.

The commodity trade with China increased by 8.1% a year ago to a record 375.2 billion United States dollars. Total imports rose 2.5 percent sequentially, driven by consumer goods and automotive.

USA merchandise exports to China and Mexico in 2017 were the highest on record - and so were imports.

"When an economy is at full employment, an acceleration in demand tends to be accompanied by a pickup in import growth and a wider trade deficit", said John Ryding, chief economist at RDQ Economics.

"Right now, the same trade policy that Trump attacked ferociously and promised to speedily replace is still in place", said Lori Wallach, director and founder of Public Citizen's Global Trade Watch.

It would suggest the administration will struggle to bring down the deficit, especially as some $1.5tn in tax cuts work their way through the system, a factor that could be expected to boost domestic demand further.

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