The Growing Trade Deficit Strengthens Trump's Hand in Trade Talks With China

Data released Wednesday morning by the Census Bureau shows that America's trade deficit increased by 12.5 percent during 2018, hitting $621 billion by the end of a year ago (and $891 billion if only goods are considered, instead of goods and services combined).

The goods trade deficit with China, which Mr Trump and his officials have sought to address by imposing tariffs on Chinese products worth $250 billion, widened by 11.6 per cent to a record high of $419.2 billion.

The US merchandise trade deficit increased by $83.8 billion, or 10.4 percent, to $891.3 billion in the past year, the Commerce Department said.

There are a few takeaways from this news, including that trade was probably a bigger drag on growth last year than previously forecast.

US President Donald Trump said on Wednesday (March 6) that trade talks with China were moving along well and predicted either a "good deal" or no deal between the world's two largest economies.

But America's dependence on imports appears to have increased after the tariffs that Mr Trump imposed previous year on foreign steel, aluminium and Chinese products.

The United States' goods and services deficit widened by $68.8 billion to $621.0 billion in 2018. The tariffs are a major factor in the ongoing trade war between Washington and Beijing. "I think we need to ask ourselves what the world looks like in which tariffs as blunt instruments are just used as negotiating tools".

The trade gap is growing in large part because the US economy has been strong compared to other major countries.

More news: City boss Guardiola says anything could happen in Premier League title race

Today, the USA economy is healthy, with economic growth relatively robust. The dollar's climb was partly due to a series of rate hikes by the Federal Reserve.

Other data on Wednesday suggested some slowing in the labor market, though the pace of job gains remains more than enough to drive the unemployment rate down.

The strong dollar matters because it has led to near-record deficits in manufactured goods and non-oil goods that are being masked by increases in exports of oil and services, Scott said.

Between 2017 and 2018, USA exports to China dropped by more than $9 billion, while its imports from China rose by more than $34 billion. USA and Chinese officials have recently signalled that they are close to some kind of agreement, although China has only bolstered its commitment to investing in and developing its technology sector and questions about how to enforce any trade rules remain. Moreover, Trump pulled the US out of the longstanding trilateral North American Free Trade Agreement, which came into force in 1994 to unify the US, Canada, and Mexico.

The president has repeatedly argued that the trade deficit is "unsustainable" and classified it as transferring wealth from the U.S.to foreign countries. Economists disagree about whether or not such a deficit is good or bad, since more importing could be an indicator of a healthy economy and consumers with more disposable income. That means Trump's presidency will have seen the United States trade deficit-the main metric by which his judges countries to be winning or losing-grow by more than $100 billion.

Cellphone imports increased $0.6 billion. "When we impose a tariff, it is the domestic consumers and purchasers of imports that bear the full cost of the tariffs", said David Weinstein, an economics professor at Columbia University, who co-authored one of the papers.

Another is that other countries have levied their own retaliatory tariffs on our own products - most famously, red-state goods such as soybeans and bourbon.

(Copyright © 2015. All Rights Reserved.)
 
Recommended

Why Kashmir remains an open wound between India, Pakistan
China's Foreign Ministry on Wednesday said it reiterated its call for India and Pakistan to exercise restraint. Three of a family were among those martyred in the Indian firing.

Pakistan PM Imran Khan calls emergency meeting on response to India's airstrike
There has been no immediate explanation for the different accounts but India and Pakistan routinely contradict the other. He also tweeted images of the "payload of hastily escaping Indian aircraft" which "fell in (the) open".

Phillies rumors: Club interested in Keuchel, Kimbrel on short-term deal
If they didn't get Harper and waited, they may have never had an opportunity to sign someone like a Mike Trout or Mookie Betts. A six-time All-Star, Harper hit.249 with 34 home runs, 100 RBI and 103 runs scored past year in a career-high 159 games.

National Football League combine: Rams prospect meetings tracker
The 6-foot-6, 260-pound pass rusher ran an official 4.41-second 40-yard dash in front of scouts from all 32 teams. Following his historic 40-yard dash time , he could be a lock for the Top 10 of April's selection process.

Venezuela to deport USA journalists who were detained after interviewing Nicolas Maduro
Venezuelan officials confiscated his and his crew's cellphones, equipment and the material of the interview , according to Ramos. The CNN host asked him why he stopped short of calling Maduro a dictator in an interview with Univision's Jorge Ramos last week.

China urges Pakistan and India to show restraint, seek dialogue
Senior government officials said there were no reports of any casualty. "We should sit down and talk about differences", he said. Addressing his Indian counterpart Narendra Modi in a televised speech, Khan said: "Better sense should prevail".

'The Voice' Alum Janice Freeman's Death Confirmed by Her Representatives
Janice Freeman -who was a favourite contestant on 2017's The Voice in the U.S. - died suddenly on Saturday (Sunday AEDT). Freeman's family told TMZ she started having trouble breathing at her home in West Covina, California .

UFC 235: Kamaru Usman manhandles Tyron Woodley to claim welterweight title
Lawler with a victory could set up fights with either Colby Covington or Santiago Ponzinibbio to get back into title contention. This will be Lawler's first fight since a December 2017 bout with dos Anjos, a fight in which he tore his ACL.

Kylie Jenner Is the Youngest Self-Made Billionaire Ever
Ever since news revolving around Forbes' 2019 list of self-made billionaires was made public, debates sparked as a result. Forbes which released the list on Tuesday attributes the shrinking numbers to economic forces and weak stock markets.

$2,600 Huawei folding phone makes Samsung’s look cheap
Samsung's main Android threat right now would surely launch a foldable handset of its own, one it has been teasing for months now. The fair started with press conferences on Sunday, before the doors open on Monday, Feb. 25, and runs until Feb. 28.

In blow to Canadian PM Trudeau, second minister quits over scandal
She said keeping her position would require her to publicly defend the government and its policies, which she could no longer do. Indeed, when Wilson-Raybould resigned from cabinet, Philpott tweeted a picture of the pair with their arms around each other.

Benitez admits he has a selection headache for Burnley clash
An overhit Almiron cross is headed back into the middle by Yedlin and, via Rondon, to Perez, who powers into the net on the turn.

'Alexis Sanchez could be finished at Manchester United'
PSG leads 2-0 from the first leg. "I just said to him there, "get ready for the next one, because you're going to take that as well", Solskjaer said.

Kim opens door to United States presence in Pyongyang at nuke talks
Speaking through an interpreter, Kim said he is " confident of achieving the great results that everyone will welcome". The second Kim-Trump summit came about eight months after the first in Singapore in June a year ago .

Trump derides 'fake' hearing, but says Cohen truthful on 'no collusion'
He said Mr Trump had not released his tax returns because he feared that public scrutiny would lead to an audit and tax penalties. The bad news, according to Mr Christie, was Mr Cohen's revelation that federal prosecutors in NY were investigating Mr Trump.


More News

News
More News