Published: Sat, March 09, 2019
World Media | By Cesar Oliver

Despite Trump's Promises, The Trade Deficit Is Only Getting Wider

Despite Trump's Promises, The Trade Deficit Is Only Getting Wider

The Commerce Department said on Wednesday that an 18.8 percent jump in the trade deficit in December had contributed to the $621.0 billion shortfall a year ago. The December gap jumped from the prior month to US$59.8 billion, also a 10-year high and wider than the median estimate of economists.

But the deficit has been a long-standing bugaboo for Trump. The previous trade deficit recrod, of $838.3 billion, was in 2006, under President George W. Bush, as the housing bubble peaked.

Trump had pledged both faster growth and lower trade deficits.

Agriculture workers, in particular, have argued that they already are the collateral damage. Whether you actually should remove services trade in such calculations is questionable.

While Trump appears to be on the verge of a deal with China that will see it make some trade concessions and agree to buy significantly more USA agricultural product and energy, which might be regarded as a win, increased Chinese purchases of U.S. products will essentially cause a redirection of trade - and the trade deficits - unless the United States is able to greatly expand capacity and improve its export competitiveness.

"Is the juice going to be worth the squeeze?" That, of course, is President Trump's aim.

Put another way, by Trump's own benchmark, the USA is 20% worse off than it was at the end of 2016, just before he took office.

Speculation continues as to whether Mr Trump will lift tariffs on European cars and parts coming into the country.

"A budget deficit is the public sector adding additional borrowing to the US economy, making the gap between our spending and our earning even larger", Clausing said. Data from December 2018 was released Wednesday. In this case, it rose from $17.9 billion to $169.3 billion in 2018.

One is that US companies have stocked up on some imported goods to beat the tariffs, which increases imports in the short run.

The deficit between the United States and the European Union also increased in 2018, up by $17.9bn to $169.3bn.

There are clear indicators that the Chinese economy is taking a hit from American tariffs. Economists widely agree that Trump's emphasis on the trade balance is misplaced, because that number reflects broader economic factors, mainly the gap between a nation's investment and savings. European Union trade commissioner Cecilia Malmstrom traveled to Washington this week to meet with U.S. Trade Representative Robert Lighthizer to advance some sort of long-term trade pact. "The administration's fiscal policies have helped to boost the trade deficit".

Would he really prefer that the US economy not be humming?

But at the end of the day the USA does need to keep growing exports. Exports are weakening because of slowing global demand and a strong dollar, which is making USA -made goods less competitive on the worldwide market. However he apprised probers to anticipate the president to raise his stakes in a proposal to deflect consciousness from the declining trade situation. The United States has run a trade deficit for decades, thereby designating us a perennial loser in Trump's worldview.

But without enforcement, "it's hard to see how they will conclude a deal", Ennis said. "I think the White House is presuming there are more Democrats there, and there are a lot of Republicans that are assuming there are more Republicans there".

"But now, when you're getting close to victory, to relent at the eleventh hour, without achieving meaningful, enforceable and verifiable structural reform to China's trade policies, would be an abject failure of the president's China policies and people will shrug their shoulders and say what the heck did he begin this for if he won't complete it".

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