Tuesday, 25 September, 2018

Trump can't contain ballooning trade deficit with China

US Trade Deficit Trump can't contain ballooning trade deficit with China
Nellie Chapman | 06 February, 2018, 21:03

Official data showed the U.S. deficit in goods and services jumped to $53.1bn in December, an increase of $2.7bn from November, and markedly higher than economists┬┤ consensus forecasts for a deficit of $52bn.

The annual trade deficit rose 12.1 per cent from 2016 to US$566 billion, driven higher by rising crude imports and a ballooning goods deficit with China, which hit its highest level on record at US$375.2 billion, the Commerce Department reported. Exports of energy products, which had been hit by pipeline disruptions in November, expanded by 6.2 percent to hit the highest level in more than three years.

December exports were $203.4 billion, $3.5 billion more than November exports. The total goods deficit with all nations swelled by the same percentage to $796 billion.

At the same time, the United States recorded a record level of exports to 29 countries, including Mexico (243 billion), China (130.4 billion) and the United Kingdom (56.3 billion). Imports set a record $2.9 trillion, swamping exports of $2.3 trillion, according to CTV News Canada.

Recently, Trump levied steep tariffs on imported solar panel technology and washing machines, which immediately boosted prices for US consumers. Trump has sought to reduce the deficits with China and Mexico.

"The stock market is tumbling, but the trade deficit is rising".

Canada's trade deficit unexpectedly ballooned to C$3.19 billion ($2.55 billion) in December as imports grew faster than exports for the second month in a row, data from Statistics Canada indicated on Tuesday.

Export growth was also still lagging behind the ISM's export orders sub-index, he explained. Trump slapped broad tariffs on imported solar panels and large washing machines in January, and is considering slapping tariffs on steel and aluminum for national security reasons.

Some economists say it will be tough to reverse the trade imbalance with China without deep reforms that change the balance between investment and saving in each country.